Overtime & Fair Labor Standards Act

RevisedDecember 2, 2009

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• Establishes minimum wage and overtime standards• Distinguishes between covered (non-exempt) and

excluded (exempt) employees• Establishes overtime threshold (40 hr.)• Specifies record-keeping requirements

Purpose of FLSA

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Types of FLSA Exemption Status

• Exempt – not covered by FLSA (overtime pay not required)

• Non-Exempt – covered under FLSA for time-and-one-half overtime pay

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• Job Basis test: Must meet Executive, Administrative, Professional, or Computer Professional test for exemption.– Applies to each position individually based on duties and

responsibilities - not to a class, Role, working title, or category of position.

• Salary Basis test: Salary more than $455 per week, regardless of whether part-time or full-time – does not apply to teachers, employees practicing law or medicine, and outside sales employees.

Exempt Positions under FLSA

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How do you know FLSA status of classified positions?

• EClass designates FLSA status. • HR Generalist (HRG) notifies department Personnel

Administrator (PA). • PA can access FLSA status:

– EClass in PEAEMPL or NBAJOBS in Banner – In NBAPOSN:

• a checkmark beside “Exempt Indicator” = exempt FLSA status;

• no checkmark = non-exempt status.• Employees should see their supervisor or PA.

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• Exempt (C2, C4, C6, some LE) – In pay bands 4 and above, if job duties and salary basis

exemption tests are met. – FLSA exemption status determined by HRG.

• Non-Exempt (C1, C3, C5, some LE)– All in pay bands 3 and below.– In pay bands 4 and above, if job duties and salary basis

exemption tests are not met.– FLSA exemption status determined by HRG.

Classified (C1, C2, C3, C4, C5, C6, and LE)

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• All faculty positions must be Exempt. • FLSA exemption status determined by Provost or VPHS

offices.• F1 – F6 and M1 – M6: Always exempt if teaching or

practicing medicine; otherwise, job duties and salary basis exemption tests must be met.

• A1 – A6, P1 – P6 , and O1 – O6: Job duties and salary basis exemption tests must be met.

• If job duties or salary basis exemption tests are not met, these positions cannot be faculty.

Faculty (F1 – F6, A1 – A6, P1 – P6, M1 – M6, and O1 – O6)

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• All adjunct faculty positions must be Exempt.• If primary job is non-exempt, overload job cannot be

adjunct - must be treated as hourly. Contact your HRG for more information.

Adjunct Faculty (AJ)

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AJ001 Adj Fac Credit Instructor, Pos #J00001AJ003 Continuing Education Instructor, Pos #J00003AJ004 Adj Faculty-Summer Only, Pos #J00004AJ005 Elderhostel Adjunct Instructor, Pos #J00005AJ006 Adj Fac Non-Credit Instructor, Pos #J00006

• FLSA exemption status determined by Provost or VPHS offices.

• Under FLSA, teaching as primary duty is always considered exempt.

Adjunct Faculty (AJ) Who Teach

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AJ002 Adjunct Faculty Non-Teaching, Pos #J00002• FLSA exemption status determined by Provost or VPHS

offices.• Both job duties and salary basis exemption tests must be

met.• Must make at least $455 per week, unless teaching,

practicing law or medicine, or outside sales. • If job duties or salary basis exemption tests are not met,

these positions cannot be adjunct faculty. Contact your HRG for more information.

Adjunct Faculty (AJ) Who Don’t Teach

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• Graduate Assistants and Post-Doctoral Scholars are considered Exempt under FLSA.

Graduate Assistants (GA and G9) & Post-Doctoral Scholars (PD)

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• All hourly employees (except teachers or those practicing medicine) are considered Non-Exempt under FLSA.

Hourly (H1), Student Workers (SW), Work-Study (WS)

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• Paid for job, not hours worked. • No overtime payments required. • In extremely rare situations, may provide:

– Compensatory time or straight-time pay for hours worked >40 hours in a workweek.

– Should be for short duration of time under special circumstances (vacancy, special project, etc.).

Exempt Employees

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• Must receive 1 1/2 times regular rate for all hours worked in excess of 40 in a workweek or overtime leave.– Time-and-One-Half Overtime– Overtime Leave

• If leave was taken during week, non-exempt employee receives regular rate (straight time, 1 hour = 1 hour’s pay) for hours worked in excess of scheduled hours up to 40 during a workweek.– Straight Time Overtime

Non-Exempt Employees – Overtime Compensation

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Non-Exempt Critical Term: “Hours Worked”

• Principal job activity• “Suffer” or permit to work• Rest periods less than 20 minutes in duration (except

lunch)

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Non-Exempt Critical Term: “Workweek”

• Workweek begins at 12:01 a.m. on Sunday and ends at 12:00 a.m. (midnight) on Saturday

• 168 consecutive hours during a 7-day period

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Non-Exempt Critical Term: “Regular Rate”

• Includes all forms of remuneration (e.g., shift differential, on-call pay, lump-sum payments, second job salary)

• Converted to HOURLY rate• Particular to each workweek

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• Perform principal duties• Perform principal duties or closely-related duties

outside of work hours• Travel time between job sites • Employer-required training• Breaks (<20 minutes)• Pre- and postliminary activities (checking job locations,

fueling cars, picking up mail at P.O., putting away tools at end of day)

Non-Exempt Compensable Time Examples

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• Preparatory work related to principal duties• “Waiting” or “standing by” for work • “Unauthorized” work performed (with or without

supervisor’s knowledge)• Arrives early to work and begins working• Meal time - if employee is not “free” from work duties

Non-Exempt Compensable Time Examples

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• Work not requested but “suffered or permitted” is counted as time worked

• Standard is whether employer knows or has reason to believe the work is being performed

Non-Exempt Compensable Time Examples – Unauthorized Work

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Overload Jobs

If primary job is part time, department must consult with HRG.

PRIMARY JOB

OVERLOAD JOB

OVERTIME PAYMENT?

EXEMPT EXEMPT NO

EXEMPT NON-EXEMPT NO

NON-EXEMPT EXEMPT YES

NON-EXEMPT NON-EXEMPT YES

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• U.S. Department of Labor (DOL) enforces FLSA• Burden of proof is on employer• If violation found to be willful, employee can sue employer

for recovery of back wages and liquidated damages for up to 3 years

• Employer cannot retaliate against employee for “whistle blowing”

FLSA Violations

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Potential DOL Penalties

• Unpaid wages (2 - 3 years of back wages)• Fines ($10,000)• Imprisonment (6 months)• Liquidated damages (2x)• Attorney fees and costs• Individual liability

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Banner Overtime Authorizations

ExceptionOT1 Additional Paid Time @ 1.0OT2 Additional Paid Time @ 1.5

ExceptionOT1 Additional Paid Time @ 1.0OT2 Additional Paid Time @ 1.5

FLSA STATUSEXEMPT

FLSA STATUSEXEMPT

OT2 Overtime Classified @ 1.5OT1 Additional Paid Time @ 1.0OT2 Overtime Classified @ 1.5OT1 Additional Paid Time @ 1.0

FLSA STATUSNON-EXEMPTFLSA STATUSNON-EXEMPT

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For more information…

• Contact your HR Generalist • Review “Overtime Guidelines” and related links on the

VCU HR Compensation Management webpage at www.hr.vcu.edu/policies/FLSA%20handout.pdf

• See “VCU Banner Leave Reporting and Timekeeping Manual” at www.hr.vcu.edu/forms/Banner_Leave_Reporting&Timekeeping_Manual.pdf