Classification & Compensation

Fair Labor Standards Act (FLSA) Compliance

One of the most important functions of the Classification & Compensation Team is determining whether a position is properly classified as exempt or non-exempt under the Fair Labor Standards Act. FLSA requires that most employees in the United States be paid at least the federal minimum wage for all hours worked and overtime pay at time and one-half the regular rate of pay for all hours worked over 40 hours in a workweek. A special provision of FLSA for public agency employers like USF allows use of compensatory time off at a rate of not less than one and one-half hours for each overtime hour worked instead of cash overtime pay.

Exempt Employees

FLSA provides an exemption from the overtime pay requirements of the Act for certain kinds of positions and duties. Employees whose duties meet the tests for exemption are commonly referred to as "exempt employees." This means that the overtime provisions of FLSA do not apply to those positions. It is important to note that whether a position qualifies for exempt status must be determined based on the duties for that specific position. Titles alone are not sufficient to determine the status of a position under FLSA.

The Classification & Compensation Team will make a determination on the exempt or non-exempt status of Administration or Staff positions based on responses to a Position Profile Description. For Temporary (formerly OPS) positions, this determination is made based on a temporary Salaried Duties and Responsibilities Form. In order to qualify for exempt status, positions generally must meet three tests:

  • Salary Level Test - In most cases, exempt employees must be paid at a rate not less than $455 per week. This amount cannot be prorated for employees who meet the duties tests for exempt status, but do not work full-time. Regardless of the time worked, the salary for an exempt employee must be at least $455 per week ($23,660 annually).
  • Salary Basis Test - Generally, exempt employees must be paid their full salary for any week in which they do any work. Compensation cannot be reduced because of variations in the quantity or quality of work, or the hours worked. This is known as the "no-pay docking" rule. There are provisions under FLSA for certain permitted salary deductions and for leave administration. The regulations are complex, and any questions about proper procedures for paying exempt employees on a salary basis should be referred to the Classification & Compensation Team in Human Resources.
  • Duties Test - The specific position duties must qualify under one of the duties tests provided by the Act. The Classification & Compensation Team is trained to make determinations as to whether the duties of a position will meet FLSA criteria. For more information on the duties tests, you may want to read the fact sheets available on the Department of Labor's website.

Nonexempt Employees

Employees who do not meet the exemption tests above (or other specific exemptions tests) must be paid at least one and a half times their regular rate of pay for any hours worked beyond 40 in a workweek. A special provision of FLSA for public agency employers like USF allows use of compensatory time off at a rate of not less than one and one-half hours for each overtime hour worked instead of cash overtime pay. Nonexempt employees at USF must complete timesheets so that precise work hours are documented.

For additional information, see the U.S. DOL Fact Sheet #22: Hours Worked Under the Fair Labor Standards Act (FLSA).

FLSA Rule Change Proposed in 2016 Was Not Implemented

In May 2016, the Department of Labor (DOL) released updated regulations that would have required employers to change certain policies and practices in order to comply with the law. Effective December 1, 2016, these new regulations would have changed the overtime exemption status for many employees. Employees who were salaried but made less than the revised minimum salary threshold of $47,476 per year would have become eligible for compensatory time or overtime pay (if allowable) for hours worked over 40 in a workweek.

On November 22, 2016, a federal court granted a preliminary injunction postponing the December 1st implementation of changes to the FLSA salary threshold for exempt positions. The current rule remains in effect. Subsequent actions have extended the delay on implementation, and there is currently (as of April 17, 2017) no specific date for a new exemption threshold to take effect, nor is there certainty that any change will be made in the existing regulations.