UCF Response

In September 2019, we were notified by U.S. Department of Labor (DOL) that the Fair Labor Standards Act (FLSA) overtime ruling has been released and will be effective January 1, 2020. The new threshold for overtime exemption is $35,568 based on 2080 work hours per year. Because Florida universities (including UCF) operate on 2088 work hours per year, the threshold will be $35,705 for UCF employees. Initial details can be found on the DOL’s fact sheet.

UCF Human Resources is currently taking steps to meet the DOL’s new ruling, including analyzing how employees and payroll processing will be impacted. The regulation changes were first proposed in 2016 and have been under federal review since that time, with a period of public comment and review.

As a result of the changes, some UCF non-exempt, hourly positions will be required to change to exempt and will no longer be eligible for overtime pay. Changes in classification between non-exempt and exempt positions also involve changes in leave accrual.

Employees impacted by this change will receive a communication from UCF Human Resources with specific information about the changes to his or her position classification, including leave accrual amounts.

The majority of UCF employees will not be affected by the new regulations.

Changes that may impact overtime eligibility will be effective at UCF on December 13, 2019.

We invite you to read more about the U.S. Department of Labor FLSA amendment and how it affects positions at UCF via the FAQs and resources on this webpage. Human Resources is also available to answer questions at comp@ucf.edu.

 

Frequently Asked Questions


1. What is the Fair Labor Standards Act (FLSA)?

The FLSA is a federal wage and hour law administered by the U.S. Department of Labor (DOL) since 1938. The law provides employees with wage and hour protections. It impacts employees in the private and public workforce by establishing minimum wage, overtime pay, and other wage and hour regulations.

Under the FLSA, employees are classified as exempt or non-exempt.

  • Non-Exempt Employees are paid overtime for time worked in excess of 40 hours in any work week.
  • Exempt Employees are not paid overtime.

 

2. What are the current FLSA overtime guidelines? 

Under the FLSA guidelines, to qualify for an exempt status, the requirements of three tests must be met:

  • Salary Basis Test: An employee must receive a predetermined, fixed salary that is not subject to reduction due to variations in quality or quantity of work performed;
  • Minimum Salary Test: An employee must be paid a salary minimum as defined by the Department of Labor that is currently $23,660 per year ($455 per week); and
  • Duties Test: The primary job duties performed must involve the kind of work associated with exempt executive, administrative, professional or highly compensated employees as specifically defined by the FLSA. These exemptions are sometimes referred to collectively as the “white collar” exemptions because the work is performed in an office or other administrative setting.

 

3. What is the history of the 2016 FLSA Overtime Amendment and proposed changes at UCF?

May 18, 2016: The U.S. Department of Labor released new rules updating the Fair Labor Standards Act (FLSA) overtime regulations, originally anticipating an implementation date of December 1, 2016. The University took steps to implement the new standards by auditing and reclassifying some employees under the new guidelines, which were as follows:

  • The minimum salary for an employee designated as exempt changed from $23,660 per year ($455 per week) to $47,476 per year ($913 per week).
  • Since all Florida Universities (including UCF) use 26.1 pay periods – the threshold is actually $47,658.60 per year. The law is based on the weekly amount of $913. It is annualized for simplicity. An employee who is paid less than $47,658.60 per year will be entitled to overtime pay.
  • Also, the rule proposed raised the compensation exemption level for highly compensated employees from its previous amount of $100,000 to $134,004 annually.
  • The new 2016 rules increased the minimum salary required before an employee can be classified as exempt from overtime pay under the “white-collar” exemptions, from $455 per week (~$23,660 annually) to $913 per week ($47,658.60 annually based on UCF’s 26.1 pay periods). They also provide for automatic updating of the minimum salary every three years.

November 18, 2016: These changes went into effect at UCF.

November 22, 2016: U.S. Federal Court grants a preliminary injunction postponing the December 1st, 2016 nationwide effective date of the FLSA changes. A preliminary injunction is designed to preserve the status quo while a case is being decided by the court system. The University has been closely monitoring the case and working with leadership and departments to develop an approach that would ensure employees are treated fairly and consistently across the university. In the meantime, the recently implemented initiatives to comply with these original regulation changes at UCF remained in place.

September 2019: U.S. DOL releases final Amendment with changes reflected as follows:

The new 2019 rules increased the minimum salary required before an employee can be classified as exempt from overtime pay under the “white-collar” exemptions, from $455 per week (~$23,660 annually) to $684 per week ($35,705 annually based on UCF’s 26.1 pay periods).

Changes will be implemented at UCF effective December 13, 2019/

 

4. What is changing in 2019? Who will be affected by the final Rule?

Some A&P employees who are currently classified as non-exempt jobs based on their salary (A&P and USPS exempt) whose salary is over the threshold of $35,705 and who meet the other two requirements will be converted to exempt and will no longer be eligible to earn overtime, as well as

Some UCF non-exempt, hourly positions will be required to change to exempt and will be no longer be eligible for overtime pay. Changes in classification between exempt and non-exempt positions also involve changes in leave accrual.

Employees impacted by this change will receive a communication from UCF Human Resources in October 2019 with specific information about the changes to his or her position classification, including leave accrual amounts.

 

5. What will not change?

The DOL did not make changes to the Duties Test, (what qualifies for an exempt Executive, Administrative, Professional, or highly compensated position) nor to the Salary Basis Test (who qualifies to receive a salary instead of hourly pay).

 

6. Who will not be affected by the final rule?

Hourly workers (OPS, Student Assistants, etc.) appropriately classified as non-exempt based on the Duties Test are not impacted by the new rule. Generally, hourly workers are entitled to overtime regardless of how much they make if they work more than 40 hours in a week, therefore nothing changes. Blue-collar employees and white-collar employees who do not meet the Duties Test will continue to receive overtime pay.

Resources for  Employees

 

University of Central Florida

 

U.S. Department of Labor

 

Society for Human Resources Management

 

For more information contact UCF Human Resources