Background on FLSA changes
What is the FLSA?
The Fair Labor Standards Act was first signed into law in 1938 with the purpose to protect workers and ensure their fair compensation and treatment. It is a federal law that establishes minimum wage, overtime pay, recordkeeping and youth employment standards affecting employees in the private sector and in Federal, state and local governments. Its provisions have undergone numerous changes over the years, and it is administered by the U.S. Department of Labor (DOL).
What is happening?
The DOL has revised the salary requirement for determining which employees must be paid overtime for hours worked above 40 per week and which employees are exempt from that requirement. The threshold below which employees must be paid for overtime has changed from $23,660 to $47,476 effective December 1, 2016.
Why is the DOL changing the regulations?
The purpose of the initial overtime rules was to ensure employees get paid fairly for the work they do. It defined job types and salary levels above which employers do not have to compensate employees for hours worked over the standard 40-hour workweek. (These employees are “exempt” from overtime pay rules.) Employers must compensate any employee who does not meet those duties and salary thresholds for any overtime worked. (These employees are “non-exempt.”) The salary threshold has not been changed since 2004, so it was decided it needed to be raised.
How far reaching are the changes?
Since this is federal law, the new regulations will impact nearly all industries across the country, including those in higher education and health care.
Where can I get more information?
Visit the DOL overtime rule FAQs page.
How Human Resources has been preparing for the changes
When did HR learn about the changes?
The DOL issued a proposed rule change in July 2015 and invited stakeholders to submit comments. DOL received 270,000 comments from across all industries, including from us and many other higher education and health care institutions. After reviewing these comments, the DOL issued final rules in May 2016 with an effective date of Dec. 1.
How has HR planned for the changes?
Almost immediately after the proposed rules were issued, HR began the process of reviewing positions to see which would be affected, reaching out to the USG and our peer institutions for guidance and ideas, and meeting with vice presidents, deans and other leaders. HR has worked to identify the issues and concerns of both employees and organizations, including conducting reviews of impacted employees by college or division.
How were the positions that would be changed determined?
HR identified positions based on the new salary requirement and reviewed each of them with the dean or vice president over the department in which the position exists.
How many employees are affected?
At Augusta University, exempt employees under the $47,476 threshold defined in the final rule include 699 university employees, 98 medical center employees and 15 medical associates employees. Across the nation, it is estimated that more than 4 million workers will be affected in the first year.
When will the changes go into effect?
For university employees changing to non-exempt, the change will be effective Oct. 23. For medical center employees changing to non-exempt, the change will be effective October 30 and for medical associates employees, October 31.
How was the university implementation date chosen?
In late August 2016, the University System of Georgia informed all USG institutions that the implementation date would be November 1, 2016. After feedback from the the Employee Advisory Council, we requested a new date of Oct. 23 and the USG agreed.