The United States Department of Labor (DOL) has approved a change in the federal Fair Labor Standards Act (FLSA) that will significantly increase the number of UC employees eligible for overtime pay effective Dec. 1, 2016. The revised rule increases the minimum salary threshold for exempt employees from $455/week (approximately $23,660/year) to $913/week (approximately $47,476/year). Faculty will be unaffected by this rule because the minimum salary threshold does not apply to those who have the primary duty of teaching and imparting knowledge.  

This minimum wage test is based on a minimum salary requirement rather than a duties test. An employee’s job could pass the duties test, but the employee’s salary would not pass the salary test. Since the salary test is based on annual earnings versus annualized rate/salary, many higher earning employees are now becoming non-exempt and eligible for overtime. For example, an employee earning $100,000 per year as an annualized rate, but who works only 40% time would be considered non-exempt.

Impacted appointees include the following:  

Academic:

  • Junior Specialists: All junior specialists will be classified as non-exempt/overtime-eligible because the salary rate for junior specialists is below the minimum salary threshold.  
  • Assistant Specialists step 1 and step 2: The minimum salary for the assistant specialist step 1 and step 2 will be raised to maintain their status as exempt employees. Effective Nov. 20, 2016, all current and future appointees at this level must be paid on the new UC salary scale.flsa_image.png
  • Part-time Non-Faculty Academics: Part-time non-faculty academics may also fall below the minimum salary threshold depending on the percentage of their appointment. Non-faculty academics, including those on recall appointments, who earn less than $913 per week will be reclassified as non-exempt/overtime-eligible. HR Shared Services will be reviewing the record of part-time non-faculty academics to determine whether they meet the salary threshold.  

Staff:

  • Policy-Covered Jobs: Any employee who earns less than $913 per week will be reclassified as non-exempt/overtime-eligible. (Exceptions include licensed physicians which are not covered by this new legislation.)
  • UPTE Bargaining Unit Jobs: Any changes to jobs represented by UPTE that are being considered for a change in the FLSA exemption status or a pay increase are being bargained with the union at this time. Additional information will be provided once there is agreement.

All impacted employees that convert from exempt to non-exempt FLSA classification will be paid by the hour for each hour worked and will receive paychecks on a biweekly (rather than monthly) basis. Employees will be expected to track and record all hours worked and will receive overtime pay if they work more than 40 hours in a workweek. All changes are effective on Nov. 20, 2016.

HR Shared Services will be notifying the affected employees, their supervisors, and their department administration in the next two weeks with specific information and available resources. There are upcoming training webinars scheduled for both managers and supervisors. These webinars will cover an overview of FLSA changes, how the transition impacts employee pay, what is compensable time for a non-exempt employee, time reporting requirements, vacation payout program, and available resources.  

The dates/times of these webinars are listed below and invitations will be forthcoming:  

Managers:

Employees:

Additional training on the HBS timekeeping system will be offered in early December. Dates and information will be coming.

For additional details, please refer to recent communications: