Fair Labor Standards Act

Purpose of exemption status. The Fair Labor Standards Act (FLSA) outlines the criteria for positions to be exempt from overtime pay.  Job descriptions are reviewed periodically or when managers request edits to a job description, to ensure compliance with FLSA guidelines.

Definition of Exempt vs. Nonexempt. Per FLSA, all positions are considered nonexempt (hourly/biweekly payroll) and must meet the three-part test to qualify for exempt status (exempt from overtime/salaried/monthly payroll).  At any time that a position no longer meets all three parts, the position is considered nonexempt (hourly/biweekly payroll). If a position’s key responsibilities and/or pay grade changes and the position meets the three-part test, the position may be updated to exempt (salaried/monthly payroll).

Three-Part FLSA Exemption Test

• Duties – must be exempt level work
• Annual Salary – must meet the annualized salary threshold
• Weekly Salary – must meet the weekly salary threshold

• Positions that are nonexempt (hourly/biweekly payroll):
  • must adhere to timekeeping records requirements (clocking in/out)
  • work during the official workweek which is 12:00 a.m. Sunday – 11:59 p.m. Saturday
  • qualify for compensatory (actual worked hours greater than 40 per work week)
  • working over 40 hours in a week must be preapproved by manager
  • paid on the biweekly payroll (26 pay periods per calendar year)

• Job Aides and Assistance with Timekeeping:
  • Employee (Time) – Elapsed View
  • Employee (Time) – Punch Time View
  • Employee (Time) – Web Clock
  • Payroll Schedules

Any late or missed time reporting submissions can result in missed or shorted pay checks and will be reflected in the next payroll processing period.

All time reports must be submitted by the employee and approved by the time reporting manager or designee.

You must have prior approval from your supervisor. Any time worked must be paid for and includes reviewing and responding to work e-mails or working weekends if you are not scheduled to do so.

There may be instances that require an employee to work beyond their normal schedule to ensure department needs are met. Managers must pre-approve any overtime and have the right to use other alternatives for managing employee’s time.

Flexible scheduling may be used when foreseen circumstances arise that would result in overtime hours being worked by an employee. Managers have a right to use flexible scheduling to minimize the potential for overtime and ensure business needs are met.

Compensatory time is accrued at 1 1/2 times the hourly rate for all hours worked in excess of 40 hours during the designated workweek.

Employees sometimes want to stay late to finish a project or work through their lunch break or over the weekend to get ahead of an upcoming deadline. This kind of initiative can be great, but it’s important to be aware of the FLSA impact. Any time hourly employees are working, including responding to emails or work-related texts, must be paid for doing so. Set clear expectations to ensure that all time is being recorded and maintain an open line of communication regarding any obligations that cannot be completed during their regularly scheduled work time.

• Each employee, exempt and nonexempt, is expected to adhere to their scheduled hours and work breaks.
• Explain the break schedule and expectations of your department. Nonexempt employees must be fully relieved from all of their duties during their approved breaks. Employees may not forego breaks to accumulate extra time off, make up for tardiness or to leave early.

You are not allowed to work “off the clock”, even if you are asked to do so. This includes scenarios like:

• Clocking out for lunch and continuing to work
• Checking work-related email before bed, or
• Waiting for a work-related package while off the clock.

For each of these examples, the work that you performed must be accurately recorded, and you must be compensated for your time.

Employees with nonexempt positions are paid every two weeks.

Employees with nonexempt positions:

• Are paid for fewer hours per pay period (80 hours plus any overtime that is earned, compared to 173.33 hours per period), but
• Are paid more frequently (26 times per year rather than 12)

Payroll Schedules

1. Compensable Work-Related Tasks:
   All time spent performing work-related tasks is compensable, regardless of the day, time, or location. Per 29 C.F.R. § 785.41: "Any work which an employee is required to perform while traveling must, of course, be counted as hours worked."
2. Non-Compensable Commute:
   Time spent commuting from home to work and back is not considered work time and is not compensable, as specified in the Portal-to-Portal Act amendments to the FLSA (29 U.S.C. § 254(a)(1)) and 29 C.F.R. § 785.35: "Normal travel from home to work is not worktime."

Regular Commute:
The normal commute from home to the first work location and back home at the end of the workday is not compensable, whether the employee works at a fixed location or various job locations.

Mid-Day Travel:
Travel time during the workday between job sites is compensable. For example, travel from the office to a meeting or venue during the workday is paid time.

Continuous Workday:
All time between the start of the first principal activity and the end of the last principal activity must be paid. This includes travel between job sites during the workday.

Multiple Worksites:
If a non-exempt employee reports to different worksites each morning, the commute from home to the first location and from the last location back home is not compensable.

Work Performed at Home:
Performing work-related tasks at home before commuting to the office does not make the commute compensable. The time spent on those tasks is paid, but the commute itself remains unpaid.

Special One-Day Assignments:
For same-day travel to another city without an overnight stay, travel time to and from the destination, minus the normal commute time, is compensable.

Overnight Travel:
For overnight travel, time spent traveling during normal working hours is paid, regardless of whether it occurs on regular workdays or non-working days.

Hotel to Worksite Travel:
Travel from the hotel to the worksite and back is not compensable. Time spent at the hotel is not paid unless work is performed.

Crossing Time Zones:
Employers should use the time zone of the departure point to determine whether travel falls within normal working hours.

Driving as Part of the Job:
A Non-exempt employee who drive as part of their job duties are considered to be working during that travel time, except during meal periods or sleep periods in provided facilities/hotels.

Scenario 1: Traveling to a conference
If an employee’s regular working hours are 8 AM to 5 PM and they travel to a conference from 10 AM to 1 PM, this travel time is compensable.
If the travel occurs from 7 PM to 10 PM, it is not compensable unless the employee is performing work during that time or is the driver.

Scenario 2: Working During Travel
If an employee reviews and responds to emails or conducts any work while traveling as a passenger, this time is compensable regardless of the time of day.

Scenario 3: Weekend Travel
If an employee normally works Monday to Friday, 9 AM to 5 PM, and travels on a Saturday from 9 AM to 5 PM, this travel time is compensable.

The Fair Labor Standards Act, which was signed into law in 1938, established minimum wage, overtime pay, recordkeeping, and youth employment standards. It affects full-time and part-time workers in the private sector and in Federal, State, and local governments.

The FLSA requires that employees whose jobs are designated as nonexempt keep accurate records of time worked, be paid at least minimum wage for all hours worked, and receive an overtime premium for all hours worked in excess of 40 in a workweek.

Yes. Supervisors and managers who earn less than the proposed minimum salary threshold will have their positions designated as “nonexempt”. This is regardless of their primary duties (including managing or supervising others) that otherwise may have qualified for an exemption status of “exempt” under the “duties test.”

In addition, some "working supervisors" whose primary duty is not management, as defined by the FLSA, may have their jobs designated as nonexempt.

General information, including the new salary test change, can be found on the US Department of Labor website.

The federal effective date of this change is January 1, 2025.

No. The classification is a legal designation that cannot be waived. The designation of exempt (salaried/monthly payroll) or non-exempt (hourly/biweekly payroll) does not impact the type or importance of an employee’s work.

• Pay conversion from annual salary to hourly rate:
  • Annual salary is divided by full-time annual hours of 2080 (40 hours/week for 52 weeks per calendar year).
• Pay conversion from hourly rate to annual salary:
  • The hourly rate is multiplied by full-time annual hours of 2080 (40 hours/week for 52 weeks per calendar year).
  • If a position is less than 40 hours per week, the annual hours are prorated and then the hourly or annual rate is calculated.
• Examples:
  • $52,000 annual salary will convert to nonexempt and is full-time at 40 hours/week. $52,000/2080 = $25.00 per hour.
  • $52,000 annual salary will convert to nonexempt and is full-time at 35 hours/week. 35 hours/40 hours = 0.875 * 2080 = 1820 hours. $52,000/1820 = $28.5714
  • $35.75 per hour will convert to exempt and is full-time at 40 hours/week. $35.75 * 2080 = $74,360.
  • $35.75 per hour will convert to exempt and is full-time at 35 hours/week. 35 hours/40 hours = 0.875 * 2080 = 1820 hours. $35.75 * 1820 = $65,065.

No. It is the intention that the actual job duties an employee performs will not change as a result of changing from exempt to non-exempt. Managers are expected to communicate with employees regarding work performed and may discuss ways in which an employee’s workload can be balanced more efficiently to comply with changes to the FLSA. 

If employees are asked to work overtime and not record it, they should contact their HR Business Partner. It is inappropriate, and illegal, for managers or departments to ask non-exempt employees to work without recording or compensating employee for any time worked. Managers and departments can require employees to not work over a certain number of hours; however, if hours are worked, they must be recorded and must be paid appropriately.

Yes. Managers have the responsibility to ensure business continuity of the department and minimize overtime. Managers may use flexible scheduling to meet those needs. Managers must provide employees with the scheduling expectations.

Yes, and the courses taught must not fall between the normal working hours of 8 am to 5 pm

Overtime is based on hours worked over 40 hours in a workweek. Each workweek stands alone; averaging hours worked over two workweeks is not permitted by the FLSA.