Fair Labor Standards Act FAQs
The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments. The FLSA first went into effect in 1938.
What is changing?
The U.S. Department of Labor (DOL) recently announced changes to rules regarding how employees are classified under the FLSA. The most significant rule change affects the minimum salary an employee must make before being classified as exempt or salaried. The current salary threshold is $455 per week or $23,660 annually. Effective Dec. 1, 2016, the threshold will increase to $913 per week or $47,476 annually. This will mean that the new law requires the college to convert employees making less than $47,476 to a non-exempt (hourly) classification, regardless of whether they have professional duties, or to increase their salaries to the new threshold of $47,476.
What is the difference between exempt and non-exempt?
Employees in exempt positions are not eligible for overtime pay, and they are paid at Davidson College with a monthly salary. Employees in non-exempt positions are compensated on an hourly basis for their work; they must track their hours and the college must pay time-and-a-half for all hours worked over 40 hours in a week.
Does this mean that all staff with salaries less than $47,476 will receive a raise to that level?
No. Human Resources is working with managers to review all of the rule changes and will work with managers to determine whether staff will be re-classified as non-exempt (hourly) or whether pay will be adjusted.
Is everyone who makes at least $47,476 per year classified as exempt?
No, the salary threshold is just the first step. The position also has to qualify to be exempt by meeting one of the government's Duties Tests.
Who makes the decisions about which positions are exempt at Davidson?
Human Resources is primarily responsible for making the decision, though when there is any question HR consults with the college’s attorneys.
Will I continue to make the same amount of money if my job is reclassified?
Some employees will be re-classified as non-exempt and moved to hourly compensation, but our goal will be for employees who continue to work the same number of hours to have comparable income.
If I am changed from salaried to hourly, what happens if I need to work beyond 40 hours in a week to complete my work?
Non-exempt (hourly staff) will be paid overtime wages if they work more than 40 hours in a week. College policy requires that an employee must gain his or her manager’s permission prior to working overtime hours. Managers will work closely with all employees to determine work hours and whether overtime is necessary.
Will my hours be limited?
Managers of non-exempt or hourly staff will work closely with their direct reports to determine work hours and whether overtime is necessary. Non-exempt staff will need to track all hours worked on a weekly basis so that Davidson College can comply with applicable laws.
Will all co-workers at my level be reclassified as hourly?
Human Resources is reviewing all of the rule changes to determine whether staff with current annual salaries less than $47,476 will receive a salary increase to remain classified as exempt or whether they will be reclassified as non-exempt or hourly. Since even positions at the same salary grade can differ in job functions, Human Resources staff will review each employee’s role to determine any changes to status.
What else will change for those reclassified as non-exempt or hourly?
Non-exempt or hourly staff will report all hours worked each week and will also transition from monthly paydays to biweekly paydays.
I am reclassified as non-exempt, will there be any changes to my benefits?
No. Vacation accruals will be grandfathered for any employee whose position changes from exempt to non-exempt because of this change in the law.
What if I change jobs later, or leave the college and come back?
We would have to review the details of each situation to say conclusively, but in general this grandfathering extends only to the changes caused by FLSA. If an employee who is grandfathered into their accruals because of FLSA changes leaves the college, the new employee who is hired into the position will receive the standard accruals for non-exempt positions. Likewise, an employee who leaves and returns will return under the standards for the position into which they are hired.
How is the work week defined?
Every employer has to set a specific work week. Davidson’s work week is from Sunday morning at 12:01 a.m. through Saturday night at midnight.
What happens when someone works more than eight hours in a day?
The FLSA does not set a limit on how many hours a person works in a day. North Carolina law also does not specify a limit for hours worked in a day (except for employees who are minors). Whether any hours are overtime eligible depends on the total hours worked in the week.
Can we schedule creatively? If there is a big event at the end of the week and I need to work more than eight hours on a day or on Saturday, can I work less at the beginning of the same week?
Yes, with your supervisor’s approval you may shift your hours around within a given workweek, not working on some days to “save up” time to work another day. You may not shift hours across weeks. The FLSA is very specific, and the DOL is very strict, that any hours over 40 worked in a given work week (for us, Sunday through Saturday) must be paid at time-and-a-half.
If I am a non-exempt employee and I have to work a lot of hours in one week, can I take comp time off the next week if I prefer that to being paid overtime?
No. The government does not allow hours of an employee in a non-exempt position to be shifted from one week to the next, even at the employee’s request. All hours worked over 40 in a given work week, Sunday through Saturday, must be paid at time-and-a-half.
What counts as time worked?
Please see Non-Exempt Guide to Tracking Time.
How does the employee report hours worked?
Non-exempt employees will track their time through TimeClock Plus. Watch for an email alerting you to training sessions hosted by Susan Caldwell in Business Services.
If the employee usually works 37.5 hours per week and needs to work 40 hours in a given week, are those 2.5 extra hours paid at time-and-a-half?
No, those extra 2.5 hours are paid as straight time. Time-and-a-half only starts after 40 hours in a given work week.
Do these changes affect faculty members?
No. Teachers, doctors, lawyers, and farmers on family farms are exempt from the regulations of the FLSA.
Where can I get more information about these changes?
You can find more information on the FLSA pages on the Human Resources website. HR will communicate directly with any affected staff and their managers. HR team members will also host several information sessions to answer questions and review the rule change with interested staff. You can also contact HR by calling 704-894-2213 or by emailing HRTeam@davidson.edu. The U.S. Department of Labor also maintains a website related to the FLSA regulations.