FLSA Supervisor/admin FAQs
The following FAQs will assist supervisors/admins with understanding the Fair Labor Standards Act (FLSA).
The Fair Labor Standards Act (FLSA) is a federal act, passed in 1938, that requires the payment of minimum wage and overtime to all non-exempt employees. The Act also contains requirements regarding exempt, or non-covered employees, with respect to how they are paid and treated in order to maintain their exemption.
There is basically a three-part test in order for an employee to be considered exempt under the Act. An employee must pass all three parts in order to be considered exempt. The parts are:
- The salary level test – the employee makes above a certain salary level, now $35,568 annually,
- The duties test – the employee’s duties consist of certain executive, administrative or professional functions, and
- The salary basis test – the employee must be paid on a salary basis that is not subject to reduction based on the quality or quantity of work.
However, there are exceptions – teachers, doctors and lawyers are not required to meet these tests. They are automatically considered exempt, regardless of their salary level.
The FLSA states that if an employee is non-exempt, that employee is entitled to overtime whether you are paid on an hourly or salary basis. The employee’s hourly rate is calculated by dividing their weekly salary rate by 40.
- Hourly employees. Example: If John is paid $20/hr and works 45 hours in a week, he is entitled to ($20 x 5 hours of overtime x 1.5, or time and a half) = $150 in overtime, in addition to the ($20 x 40 hours of work) = $800 at the regulator rate. So, John would be paid a total of $950 that week.
- Salaried employees. Example: If Sue is paid $600 a week and works 45 hours a week, she is working the equivalent of ($600/40) = $15 hourly rate. Thus, she would be entitled to ($15 x 5 hours of overtime x 1.5) = $75 in overtime, in addition to the $600 weekly rate. So, Sue would be paid a total of $675 that week.
Under the FLSA, interns/trainees are not considered employees, generally, if the primary beneficiary of the relationship is the intern/trainee, as opposed to the employer. Some of the factors considered are as follows:
- The extent to which the intern and the employer clearly understand that there is no expectation of compensation. Any promise of compensation, express or implied, suggests that the intern is an employee— and vice versa.
- The extent to which the internship provides training that would be similar to that which would be given in an educational environment, including the clinical and other hands-on training provided by educational institutions.
- The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
- The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
- The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
- The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern.
- The extent to which the intern and the employer understand that the internship is conducted without entitlement to a paid job at the conclusion of the internship.
This is a flexible test; no single factor is determinative.
MSU HR is only requiring that you keep weekly time-keeping records for all your non-exempt salaried support staff employees. The decision to keep weekly time-keeping records for exempt APA and APSA employees, lower than level 12, is at the discretion of each MSU organization. However, the department is required to have a consistent unit-wide method to identify when an exempt APA/APSA employee, below level 12, works over 40 hours so that overtime or compensatory time can be paid according to the collective bargaining agreement.
Changes to the Law
Yes, but then a federal court enjoined the regulations. So, the final FLSA regulations, passed in 2016 by the former administration, were not effective. The current administration passed new regulations in 2019. These regulations are effective as of January 1, 2020.
Faculty and Academic Staff - Specific FAQs
Most faculty are exempt either because their salaries are over the FLSA salary threshold or because they teach and teachers are exempt regardless of how much they make – the salary threshold test does not apply to teachers.
Full-time Research Associates are exempt because the minimum Research Associate salary has been set by the Provost at well above the current salary level threshold of $35,568. See the Provost’s memo on Research Associates’ salaries.
No, the DOL has stated it will not assert an employment relationship when the primary relationship with the institution is that of a student.
If the faculty member supervises the staff member, this is a violation of policy. You should notify Faculty and Academic Staff Affairs. Supervisors have an active role to play under the policy and cannot delegate that to someone else.
Veterinarians are considered exempt under the practice of medicine exemption regardless of their salary level. See 29 CFR 541.304; Clark v. United Emergency Animal Clinic, Inc., 390 F3d 1124 (9th Cir. 2004). Veterinary residents and interns are also exempt under the medical exemption as long as they have earned the appropriate degree required for practice of their profession. See 29 CFR 541.304(c).
Yes, instructions on the MSU approved time sheet state that in the event the time sheet is used in an electronic manner, the use of the MSU NetID email address will be required as the signature authority for the transaction.
The FLSA requires records to be kept for each non-exempt worker, including hours worked each day. The way in which time must be kept according to the new FLSA policies is a best practice. It is important to carefully and accurately record time to ensure proper payment of employees. To the extent you have not recorded time this way in the past, it is expected going forward.
Not unless they make below $35,568. Please reference the Time Tracking Chart.
No, non-exempt employees need to be able to track their own time.
Yes. However, going forward, you must complete the Agreement to Accept Compensatory Time in Lieu of Overtime Pay prior to the first time comp time is earned, as well as follow the other requirements contained in the Support Staff Compensatory Time Policy.
Yes, you can require a payout of comp time. However, you cannot require a “use-it-or-lose-it” system. The comp time must be paid at the end of the project, grant, year, etc. In addition, the payout criteria should be communicated to employees ahead of time. You can set your own lower cap on comp time; the Agreement to Accept Compensatory Time in Lieu of Overtime Pay contains an area in which a department can indicate its lower cap.
It is to be retained at the department level for three years. You do not need to send it to HR.