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Federal Changes to the Fair Labor Standards Act (FLSA)
Update: November 28, 2016
Earlier this year, the U.S. Department of Labor (DOL) announced changes to the Fair Labor Standards Act (FLSA) that will impact the criteria used to determine eligibility for overtime. However, last week, a federal court issued a nationwide injunction blocking the enforcement of the new Department of Labor overtime rule that increased the minimum salary threshold for exempt status to $47,476. Prior to the injunction, this rule was set to be effective December 1. Because the long-term impacts of this injunction are unclear, the University has made the following decisions:
- UF will delay the transition of our impacted exempt employees to salaried nonexempt until all effects of this ruling are understood and finalized.
- Any special pay increases that have been approved due to the anticipated Department of Labor rule change will continue.
- As announced earlier in the year, the minimum salary for full-time postdoctoral associates will continue to be $47,476. As a result, all full-time postdoctoral associates with salaries below that amount will receive a pay increase as of December 1 in order to remain competitive with peer universities.*
Please see below for more information about work that was underway prior to this injunction that has now been delayed. More information will be provided as soon as it becomes available. In the meantime, questions or concerns may be addressed to Classification and Compensation in Human Resource Services at firstname.lastname@example.org. Many thanks for your patience during this transition period.
* Please note: The Office of Research’s commitment to provide one time supplements for postdocs who were on salary prior to July 1 remains in place. Last summer, last David Norton announced that, for the existing postdoctoral associates who were granted raises on December 1, 2016, the Office of Research will offer one-time assistance to the units to help offset the added cost as follows:
- For post-docs with a salary gap ($47,476 – current salary) less than $4,000: No assistance
- For post-docs with $4,000 < salary gap < $10,000: Office of Research will provide (salary gap – $4000) x 0.5 for each eligible post-doc associate
- For post-docs with salary gap > $10,000: Office of Research will provide $3000 for each eligible post-doc
The units and PIs will be responsible for covering the balance. Please note this applies only to postdoctoral associates. It does not affect postdoctoral fellows who are, by definition, trainees and therefore paid stipends.
Why Does This Matter?
This change is expected to expand the number of employees eligible for overtime. In addition, the DOL included a mechanism to increase the salary threshold every three years. Importantly, certain types of positions are exempted from the minimum salary threshold, including most of our academic personnel, including our county extension faculty, physicians, veterinarians, residents, lawyers, and student classifications such as graduate assistants.
The salary threshold cannot be prorated based on FTE but may be prorated based the length of an employee’s appointment. For example, the annualized threshold for a 12-month employee is $47,476 whereas the annualized threshold for a 9-month employee is $35,607.
How Is UF Responding?
The university has been monitoring the national discussion and has been assessing the potential impacts since the changes were recommended last year. In addition, a cross-functional workgroup comprised of representatives from Human Resources Services, Student Affairs, Sponsored Research, Contracts and Grants, Health Affairs, IFAS, Provost’s Office, and General Counsel’s Office has provided recommendations to the university leadership team that will allow the university to remain compliant with the mandate while limiting the impact to employees and the university.
Based on our early projections, the change could affect over 1,700 employees, with the largest portion being university staff.
New Employee Category
After evaluating a number of options, the university has decided to create a new employee category for impacted employees. This new category will effectively decouple overtime eligibility from job title. Under this approach, employees who perform job duties that are eligible to be considered exempt from overtime but earn less than $47,476 will be allowed to remain in their current job title but will transition into an overtime-eligible employee class called salaried non-exempt (SNE). This approach will allow the university to pay these employees in a manner similar to salaried employees—time worked will not be entered and approved except when overtime hours are worked or leave is used. The fringe rate of these employee will be the same as the current exempt fringe rate, thereby reducing the financial impact to units across campus.
Based on a detailed analysis and partnership with key stakeholders across campus, effective December 1, 2016, the university will provide salary increases to postdoctoral associates in order to meet the new salary threshold of $47,476. In addition, effective July 1, 2016, the minimum salary level for newly hired postdoctoral associates is being increased to $47,476.
Colleges and units are encouraged to evaluate the impact these change may have on their respective units.
While the workgroup and university administration continue to evaluate the impact of these changes, the university currently does not have plans to provide funding, with the exception of some limited support for postdoctoral associate increases, to offset any desired SPIs or overtime that might be incurred by units.
Questions or concerns? For additional information, please contact Classification and Compensation at email@example.com.