Fair Labor Standards Act of 1938
Department of Labor Announces Overtime Rule Changes to Fair Labor Standards Act of 1938
May 19, 2016
Classification and Compensation Department is preparing to guide the University of Arkansas through new overtime rule changes.
Over the last year, you may have heard that the U.S. Department of Labor has been trying to increase the salary level test for employees who are exempt from receiving overtime payments under the Fair Labor Standards Act. On May 18, the Department of Labor announced that the salary basis test for exemption is being changed from $23,660 annually to $47,476 annually.
The effective date of the final rule will be Dec. 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on Jan. 1, 2020.
The new rules mean that employees who receive less than $47,476 annually for a full-year worker or less than $913 per week for workers working less than a year, must be paid overtime (or for state employees like those working for the university – be provided compensatory time) for any hours over 40 hours a week. This includes positions whose primary work is research, but does not apply to teaching faculty. As a result, employees becoming non-exempt will need to begin recording their hours of work beginning Dec. 1, in the same manner as current non-exempt employees record their time by "clocking in."
Employees who receive less than $47,476 annually or less than $913 per week will receive instructions related to time keeping prior to the Dec. 1 effective date.
This change will not affect your vacation accruals. There is a difference between non-exempt (eligible for overtime), exempt (exempt from overtime regulations), classified and non-classified status. Non-exempt and exempt statuses are federal classifications regarding eligibility for overtime pay. Classified and non-classified statuses are state of Arkansas classifications regarding state-mandated pay ranges and line item maximum amounts. Some individuals may confuse the state classifications with the federal classifications and may believe that their vacation eligibility will change. That is not the case.
The University Classification and Compensation Department is preparing to implement required changes on the Dec. 1 date and will provide further communications as the date grows closer.
If you have any questions, please feel free to contact Michele Burns at email@example.com or 479-575-4824.
Michele Burns, Director, Classification and Compensation Department