New Fair Labor Standards Act (FLSA) Overtime Rule

On November 22, 2016 employers were informed that a federal court in Texas issued an order that makes it uncertain as to if the new FLSA overtime rule will go into effect as expected on December 1, 2016.  This means that certain positions will remain exempt from overtime (not eligible) until further notice.  While we await direction as to how this applies to public and private sector employers nationwide, SOU will proceed by having previously identified employees track all hours worked beginning with the December pay period.  This tracking will provide critical information that may be necessary pending the rule’s outcome.  Under the current FLSA guidelines, The Department of Labor states in the 2004 overtime exemptions preamble to the final regulations that employers may require exempt employees to record and track hours.  Exempt employees meet the salary basis, primary duties, and salary level tests and therefore, are not eligible for overtime even when tracking hours worked.

Campus FLSA Overtime Rule Implementation Efforts

Human Resource Services hosted an informational session on June 28, 2016 to discuss the new FLSA Overtime changes, higher education exemptions, how managers can prepare, and next steps prior to implementation. The presentation slides are provided below as a resource.

On May 18, 2016, the Department of Labor released its Final Rule, which goes into effect December 1, 2016, revising the FLSA overtime exemption regulations by increasing the annual salary threshold from $23,660 ($455/week) to $47,476 ($913/week) for executive, administrative, and professional employees. This includes an automatic escalator every three years to keep up with inflation. Additionally, the total annual compensation threshold for Highly Compensated Employees (HCE) increased from $100,000 to $134,004. No changes were made to the standard job/primary duties test.

What does this mean for SOU?
Those employees who are currently designated as exempt unclassified (administrative) personnel and who will not meet the December 1, 2016 salary level test of $47,476 will be eligible for overtime; unless they meet any of the regulatory exemptions (e.g. teaching, academic administrative or employees practicing law or medicine).

Next Steps
HR will partner with managers and employees to certify employee position descriptions (via PeopleAdmin) and review applicability of exemptions based on the standards duties test. Managers will begin considering the overall impact on affected positions within their department. Employees will be asked to engage in discussions around workload distribution/seasonal demands, schedule changes, tracking hours worked, and prioritization of work.  HR will hold open forums in November to further communicate the new rule and answer employee questions.  Please contact hrs@sou.edu for detailed information.