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:

1. The salary level test – the employee makes above a certain salary level, now $35,568 annually. Effective July 1, 2024, this increases to $43,888 annually. and
2. The duties test – the employee’s duties consist of certain executive, administrative or professional functions, and
3. 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 full-time equivalent 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. 

In a word, no. The law requires payment of overtime, even if worked in violation of policy or directive. The recourse for supervisors in such a situation is to address the conduct just like the violation of other work rules. 

No, there is no ability to opt out of the FLSA protections. If an employee is non-exempt, they must be paid and treated accordingly.  

No. The actual annual salary paid, not full-time equivalent salary, is used to compare to the FLSA salary threshold to determine exemption status.  Effective July 1, 2024, an employee making an actual salary of $40,000 at 50% employment would still be considered non-exempt and under the threshold, even though their full-time equivalent salary is $80,000. 

It is important to ensure that the employee works according to their FTE percentage. If an employee is .50 FTE, they should not be working over 40 hours in a week, except in rare circumstances (in such circumstances, they must be paid overtime at time and a half for each hour over 40). If part-time employees are working over 40 hours in a week, the FTE percentage and salary should be reexamined and changed to be consistent with the designated FTE percentage.   

Yes, depending on whether your employees are collectively bargained for and depending on your specific unit policies. See the section below entitled “Compensatory Time.” 

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:

1. 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.
2. 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.
3. The extent to which the internship is tied to the intern’s formal education program by integrated coursework or the receipt of academic credit.
4. The extent to which the internship accommodates the intern’s academic commitments by corresponding to the academic calendar.
5. The extent to which the internship’s duration is limited to the period in which the internship provides the intern with beneficial learning.
6. 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.
7. 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.

Employees working the entire work week overseas are not covered by the FLSA. Employees working any portion of the work week in the U.S. are covered by the FLSA for the entire week.

To determine whether the person is exempt, you will look at the three-part test. For the salary threshold, you will add all wages together to determine if the employee meets the threshold minimum . In terms of duties test, the DOL’s guidance states that we must consider all of the jobs together and determine whether the employee’s primary duty is exempt work or non-exempt work.

Review the current time-tracking chart or the July 1, 2024 time-tracking chart. Contact the Solutions Center at SolutionsCenter@hr.msu.edu or 517-353-4434 with any questions.

Yes, numerous resources and the latest communications will be collected and maintained on the HR website. You can always contact your Human Resources representative, Faculty and Academic Staff Affairs or the Solutions Center at  SolutionsCenter@hr.msu.edu or 517-353-4434 with any questions. 

Yes. Though the FLSA does not require it, the existing Support Staff Overtime Policy does require it. According to the policy, part-time employees should receive straight time pay for all time worked under 40 hours in a week, even if hours worked are in addition to the employee's normal schedule. As a second option, compensatory time, equal to the additional hours of time worked under 40, may be used instead of paying straight time.  Please see the Support Staff Compensatory Time Policy for further details.

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.

Yes.  New changes were issued April 23, 2024 and can be found here.

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. 

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 (9^th 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. 

Yes, if their actual annual salary falls below the FLSA salary threshold. Please reference the current time tracking chart or the July 1, 2024 time tracking chart. 

No, non-exempt employees need to be able to track their own time.

Units can use their own time tracking procedure on the support staff side as long as it, at a minimum: (1) gives the employee the ability to record the number of hours worked each day; (2) provides for some sort of employee AND supervisory sign-off weekly; (3) is retained for 3 years at the unit level.

Maybe. The DOL has indicated that a minimal amount of checking email is not compensable.  However, as soon as it becomes more than minimal, it is compensable. This should be made clear to non-exempt employees. 

No. You need to sign off on your non-exempt employees’ time. The reason for this is that as a supervisor, you set the work schedule and hours of your employees and are responsible for ensuring that they are paid for the time they work. 

Human Resources and Faculty and Academic Staff Affairs can answer these questions on a case-by-case basis. Generally, as a supervisor, you should have knowledge of the work schedule of your employees and, thus, you should be able to recognize a deviation from your expected work hours. 

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.