The Fair Labor Standards Act (FLSA) is a federal regulation that establishes the minimum wage, overtime pay, record keeping and youth employment standards affecting employees in the private sector and in federal, state and local governments.
In May 2016, the Department of Labor announced an update to the minimum salary employees must earn to be exempted from the overtime provisions of the FLSA. The update requires that by December 1, 2016, employees must earn $913 per week (or $47,476 on an annual basis) and meet one or more of the exempt duties test (see below) to be exempted from eligibility for overtime compensation. Employees who earn less than $913 per week (or $47,476 annually), even if they meet one or more of the exempt duties test, are considered non-exempt and must receive overtime compensation after 40 hours worked in a work week.
Exempt and Non-Exempt Employment Classification Explained
The FLSA comprises a multitude of regulations that govern the conditions under which an employee is eligible to receive overtime pay for work beyond a 40-hour workweek.
- Exempt = not eligible for overtime. SSU staff in an exempt status are paid on a monthly basis.
- Non-Exempt = eligible for overtime. Due to the University System of Georgia and Savannah State University payroll procedure requirements, all SSU non-exempt employees are paid on a biweekly (every two weeks) basis.
The FLSA uses two ways to determine exempt or non-exempt status:
- Duties and Responsibilities of the position (also referred to as the "duties test"): In general, employees who exercise a certain level of discretion and independent judgment with respect to matters of significance are more likely to be classified as exempt, although the FLSA has many criteria to determine whether an employee's position is exempt.
- Amount of Pay: The amount of pay used to determine classification as of December 1, 2016 will be $913 weekly or $47,476 annually. (The current amount is $23,660 annually.)
To be considered exempt after the FLSA changes, an employee must first meet FLSA "duties test" relating to job responsibilities and then the salary test of $913 per week or $47,476 annually. The DOL fact sheets provide more specifics on the duties test.
Staff who work part-time, including retiree rehires, may be reclassified to non-exempt if their weekly pay while part-time is under the new FLSA salary minimum for exempt employees. While they are non-exempt, they will be required to track their hours worked.