Download FLSA Changes PowerPoint -CALS 5-24

Fair Labor Standards Act (FLSA)
Proposed Changes
CALS
May 24, 2016
Kelly Delforge, SPHR, SHRM-SCP
Director, HR Solutions and Consulting
Division of Human Resources
FLSA Background
First enacted in 1938, the FLSA established three tests that must
be met in order for an employee to be exempt from overtime pay
eligibility*:
•
Duties Test - the employee’s job duties must primarily involve
executive, administrative, professional, computer or outside
sales duties (also known as “EAP” or “white collar” duties).
•
Salary Basis Test - 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 Level Test - the amount of salary paid must meet a
minimum specified amount; and
*Note: Faculty members whose duties consist primarily of teaching and attorneys and physicians are
always exempt status under the FLSA.
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Updates to FLSA
•
Must be implemented by December 1, 2016 (UA
implementation will be payroll beginning date of November 21,
2016)
•
The minimum salary threshold for individuals to be exempt
from overtime will increase from $455 per week ($23,660
annually) to $913 per week ($47,476).
•
The total annual compensation requirement for highly
compensated employees will increase to from $100,000 to
$134,004.
•
The minimum salary threshold will be automatically updated
every three years to remain at the 40th percentile of the overall
labor market.
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Impact to University Population
•
Based on today’s population, approximately 2500 currently University
exempt employees will not meet the higher proposed salary threshold
of $913 per week. This represents about 280 within CALS.
•
Those employees will:
• Become non-exempt;
• Be required to track and positively report all hours worked; and
• Qualify for overtime pay (or compensatory time) if they work more
than 40 hours per week.
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Next Steps
•
The Division of Human Resources is working closely with appropriate
internal partners (Office of the General Counsel, Office of the Provost,
Financial Services Office, Payroll, Systems Control and Budget Office)
to create a comprehensive implementation, compliance, and
communication plan.
•
Approach
• Appointed individuals will remain appointed (until we finalize a new
campus-wide job architecture)
• Appointment letters will include language discussing possible
changes to their employment status and pay type (hourly)
• Upon implementation of new regulations, impacted appointed
employees will get new notice of appointments with hourly pay
Questions can be directed to your designated HR Partner or the HR Solutions Team at
[email protected]. Please also visit the FLSA implementation website
http://hr.arizona.edu/managers-supervisors/compensation/flsa-regulatory-changeimplementation
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QUESTIONS?
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