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FLSA

Update

As you may recall from last year, ISU had planned on implementing numerous changes related to overtime eligibility for employees due to modified rules for the Fair Labor Standards Act, (FLSA).  Ultimately, those revised rules to the FLSA were never implemented due to an injunction that was imposed by federal court last November.  As an update to the prior communications on this matter, on June 30th, the United States Department of Labor filed a brief in relation to its appeal from the preliminary injunction on the final rules.  While the brief outlines complex arguments regarding the DOL’s authority to set revised salary levels by statute, the Department communicates the intent to revise the FLSA rules through further rulemaking if the court confirms the DOL’s ability to establish a new salary threshold.  The DOL has declined to defend the enjoined minimum salary of $913 per week, but plans on proposing a new minimum salary at a later date, (presumably somewhere between the current $455 per week, and the failed attempt at $913 per week).  Further details regarding the brief are available at http://blog.cupahr.org/2017/07/dol-plans-revise-overtime-rule/.

In summary, this development provides the outcome that has been expected since the injunction was imposed with no changes to the minimum salary test at this time.  ISU HR will continue to monitor the continued rulemaking efforts on this topic and will update managers and impacted employees as more information becomes available.  Please contact the HR Office if you have any additional questions.

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On November 22, 2016, a Federal Judge issued a preliminary nationwide injunction for all employers blocking the US Department of Labor (DOL) from implementing the new FLSA exemption rules.  All proposed changes to positions on campus as a result of the FLSA revisions are on indefinite hold, pending the outcome of this preliminary injunction.

 

(https://www.dol.gov/WHD/overtime/final2016/overtime-factsheet.htm)

"In 2014, President Obama directed the Department of Labor to update and modernize the regulations governing the exemption of executive, administrative, and professional (“EAP”) employees from the minimum wage and overtime pay protections of the Fair Labor Standards Act (“FLSA” or “Act”). The Department published a notice of proposed rulemaking on July 6, 2015, and received more than 270,000 comments. On May 18, 2016, the Department announced that it will publish a Final Rule to update the regulations.

Although the FLSA ensures minimum wage and overtime pay protections for most employees covered by the Act, some workers, including bona fide EAP employees, are exempt from those protections. Since 1940, the Department’s regulations have generally required each of three tests to be met for the FLSA’s EAP exemption to apply: (1) the employee must be paid a predetermined and fixed salary that is not subject to reduction because of variations in the quality or quantity of work performed (“salary basis test”); (2) the amount of salary paid must meet a minimum specified amount (“salary level test”); and (3) the employee’s job duties must primarily involve executive, administrative, or professional duties as defined by the regulations (“duties test”). The Department last updated these regulations in 2004, when it set the weekly salary level at $455 ($23,660 annually)."

The Final Rule focuses primarily on updating the salary and compensation levels needed for EAP workers to be exempt. Among other changes, the Final Rule:

FLSA Revisions FAQs

Q. Is this change an initiative of Idaho State University?
A. No. The Fair Labor Standards Act is a federal regulation. 

Q. When will the revisions to the FLSA take effect?
A.  The U.S. Department of Labor is requiring that the revisions to the Act take effect no later than December 1, 2016.  Because this date falls in the middle of a pay period, the State of Idaho has requested that all State Agencies comply with the new regulations as of November 20, 2016.

Q.  Will those who become overtime eligible become Classified employees?
A.  No. The Idaho Division of Human Resources has confirmed that revisions to the FLSA will have no impact on Classified vs. Non-Classified designations.  Idaho Code 57-5303 governs which positions are designated as non-classified and classified.  FLSA exempt status is not a requirement for non-classified designation.

Q. When will impacted employees be notified?
A.  Impacted employees began receiving notice of changes to FLSA designation during the week of October 17th.  It is anticipated that all impacted staff will be notified no later than early November.

Q. Are retirement plan benefits affected in any way?
A. No.  The revisions to the FLSA will not impact retirement plan eligibility.

Q. Can impacted Non-Classified staff choose to now enroll in PERSI?
A. No. The change in FLSA designation and overtime eligibility will not result in opportunity to change retirement plans.

Q. Will it be necessary for impacted employees to report overtime hours in Bengal Web?
A.  Yes.  Impacted employees who are now non-exempt, (overtime eligible), will need to record all overtime worked and/or compensatory time earned/used in Bengal Web.  Impacted employees will see these changes in time entry forms in Bengal Web.

Q.  Are faculty impacted by the new FLSA revisions?
A.  No.  Employees, whose primary duties involve teaching/instruction, and related academic advising/counseling, will remain salaried and exempt from overtime under the FLSA teaching exemption rules.

Q.  Why do the revisions to the FLSA impact vacation accruals?
A.  Vacation benefits for non-exempt employees of the State of Idaho are currently governed by Idaho Code Title 67, Chapter 53, and also SBOE policy Section II.F.3 for non-classified employees.  Concerns regarding changes to annual leave accrual rates for employees that are changing to non-exempt designations have been voiced to the Idaho Division of Human Resources and the State Board of Education.  State offices are reviewing the situation for possible options which would require changes and action by the State.  ISU will keep impacted employees informed if the State makes changes to those applicable sections of code and policy.

Q. Will there be informational meetings on this issue?
A. Yes.  The Office of Human Resources will be holding informational meetings at the following times.  Interested employees and managers are encouraged to attend:

Date

Time

Building

Room

October 27, 2016

3:30 PM

Pond Student Union

North/Middle Fork Room

November 1, 2016

2:00 PM

Rendezvous Center

Room A&B

November 3, 2016

11:00 AM

Rendezvous Center

Room A&B

November 8, 2016

1:00 PM

Distance Learning

Idaho Falls CHE 303

Meridian 509

Twin Falls C91

Pocatello Oboler Library B06

Fair Labor Standards Act (FLSA) Presentation by Brian Sagendorf, ISU Director of Human Resources

Employees are also encouraged to contact their HR Consultant at 208-282-2517 if they have any further questions.

For more information on how this rule change may affect you and your position here at ISU, we have included the following links:

  1. Guidance for Higher Education Institutions on Paying Overtime under Fair Labor Standards Act - U.S. Department of Labor
  2. The Impact of the Department of Labor's Exempt Salary Increase on Higher Education Employers - CUPA-HR
  3. FLSA Q&A - Department of Labor's New Guidelines on the FLSA White Collar Exemption - CUPA-HR
  4. FLSA Overtime Exemptions FAQ Sheet - Idaho Division of Human Resources

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