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UT Dallas - Human Resources

FLSA Issues for Managers

Fair Labor Standards Act

Some Issues for UT Dallas Managers:

  • Which positions fit the administrative exemption from overtime?
  • What is the FLSA workweek at UT Dallas?
  • When do my non-exempt employees earn Federal overtime?
  • What are the rules for Federal overtime?
  • When do my non-exempt employees earn State comp time?
  • What are the rules for State comp time?

Background:

The Fair Labor Standards Act of 1938 (FLSA) was enacted during the Great Depression to increase employment by establishing the 40 hour workweek and requiring employers to pay 1.5 times more per hour (“time and one-half”) for hours worked over 40 in the workweek.  The FLSA regulates minimum wages, overtime pay, child labor, and related employer record keeping; and is enforced by the United States Department of Labor. 

The FLSA creates a limited number of exemptions from the overtime requirement.  To qualify for an exemption, a position must pass three tests:

  • The salary basis test,
  • The salary amount test, and
  • The duties test.

The salary basis test, as applied to UT Dallas, limits the reasons for, and minimum duration of, deductions from pay for time not worked.  See Administrative Policy D3-110.

The salary amount test requires that exempt employees be paid not less than $455 per week.  While that amount equates to $23,660 per year, the test must be satisfied on a per week basis.

The duties test requires that the actual duties of an exempt position satisfy standards set by the Secretary of Labor.  In general, exemptions are available to employees who are employed in a bona fide:           

  • Executive position
  • Administrative position
  • Professional position, including:
    • Learned Professionals
    • Creative Professionals
    • Teachers
    • Computer Employees
  • Outside Sales position

Consideration of Issues:

  • Administrative Positions – must satisfy the salary basis and salary amount tests, and the administrative duties test:  “primary duty is the performance of office or non-manual work directly related to the management or general business duties of the university and whose primary duty includes the exercise of discretion and judgment with respect to matters of significance.”
  • Examples - Jobs with management or general business duties include accounting, budgeting, procurement, human resources, database administration, and compliance.  Discretion and judgment is involved in a job when an employee has the authority to formulate, affect, interpret or implement management policies, the employee can commit the university in matters with significant financial impact, or when the employee has the authority to waive or deviate from established policy without prior approval.  It is not just the use of skill in applying well established procedures.
  • FLSA workweek for UT Dallas – 12:01 AM Thursday through 12:00 Midnight the following Wednesday
  • Federal overtime or comp time – Your non-exempt employees earn Federal overtime, usually paid as comp time, when they work more than 40 hours during the FLSA workweek.
  • Federal overtime rules – As a public employer, UT Dallas can “pay” 1.5 hours of Federal comp time for every hour worked over 40 in the workweek, until the non-exempt employee has 240 hours of comp time on the books (160 hours worked x 1.5 = 240 hours.)   Once the employee has 240 hours of Federal comp time, all additional federal overtime must be paid.  Federal comp time does not expire and must be paid at termination.
  • State comp time – Non-exempt employees earn state comp time when they work no more than 40 hours in the work week, but the combination of work time and paid leave or holiday time in the work week is more than 40 hours.
  • State comp time rules – Eligible employees earn one hour of comp time for every hour of paid time in excess of 40 hours in that workweek.  State comp time must be used within 12 months of the end of the workweek in which it was earned or it is lost.  State comp time is not paid at termination.  “90 day rule” applies to requests to use State comp time.

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