FLSA Q&A

**PENDING - due to recent Texas ruling**

 

FLSA Guideline Changes

  1. What changes were made to the FLSA rules?

The Federal Department of Labor recently increased the salary basis test resulting in more employees being covered by the Fair Labor Standards Act (FLSA) and therefore entitled to overtime.  Specifically, any employee that is currently overtime exempt from the provisions of FLSA under certain classifications, including the Executive, Administrative, and Professional exemptions with a salary of less than $913 per week ($47,476 for a full-year worker) would be covered by the FLSA, and therefore, will be entitled to overtime.

 

  1. When are the changes effective?  

Changes to the FLSA rules are effective December 1, 2016.

 

  1. Will employees who are currently considered exempt from FLSA overtime requirements remain exempt? 

Employees considered exempt from FLSA’s overtime requirements must meet both the threshold salary test (using the new increased salary basis test threshold) and the duties test of a particular position.  

 

  1. Should state agencies and higher education institutions apply the FLSA criteria the same?

Yes, state agencies and institutions of higher education should apply the FLSA criteria in the same manner if claiming an Executive, Administrative and/or Professional exemption. Note, in limited circumstances, the salary test does not apply to certain professionals (e.g., teachers, doctors, and lawyers) because those professionals are considered exempt under the FLSA based on their duties alone.  

 

Salary Test and Duties Test

 

  1. Will employees have to meet both the threshold salary test AND the duties test to be considered overtime exempt?

In most circumstances, yes. Employees have to meet both the threshold salary test and the duties test to be considered overtime exempt.  It is not enough to meet one test but not the other unless the claimed exemption is one for a professional whose duties alone make them exempt regardless of the salary paid (see #4 above).   

      6.  If an agency has already determined that a position meets the exemption criteria and there are no substantive changes to the position since it was last reviewed, is there any reason why the
           agency would need to review it again before changing the employee to overtime exempt once they reach the salary threshold?

For non-represented positions WAC 357-28-245 requires general government employers to get OFM approval when changing a position’s overtime eligibility designation from overtime eligible to overtime exempt.

 

Part-Time and Cyclical Employees

 

  1. What is the salary requirement for part-time salaried workers?

Whether an employee is full-time or part-time, the standard salary level to qualify for exemption is $913 per week.

 

  1. Will seasonal employees be held to the $47,476 annual threshold or the $913 per week threshold?

The new salary threshold is $913 per week meaning that if the position calls for the employee to work 40 weeks out of the year, the ability to exempt the position from FLSA would depend on whether or not the employee’s weekly salary exceeds $913 per week.

 

  1. For an hourly part-time employee - what happens if they don’t work the same number of hours each week and some weeks they are below the salary threshold and some weeks they are above it?

If the person’s pay is tied to the amount of time (i.e., the quantity) that they work, they are hourly employees and overtime eligible because they are not being paid on a salary basis pursuant to FLSA rules.  Specifically, 29 C.F.R. § 541.602(a) states:

 

An employee will be considered to be paid on a “salary basis” within the meaning of these regulations if the employee regularly receives each pay period on a weekly, or less frequent basis, a predetermined amount constituting all or part of the employee's compensation, which amount is not subject to reduction because of variations in the quality or quantity of the work performed. Subject to the exceptions provided in paragraph (b) of this section, an exempt employee must receive the full salary for any week in which the employee performs any work without regard to the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work. An employee is not paid on a salary basis if deductions from the employee's predetermined compensation are made for absences occasioned by the employer or by the operating requirements of the business. If the employee is ready, willing and able to work, deductions may not be made for time when work is not available.

 

Id. (emphasis added).

 

  1. How do we perform a salary test for staff who work in cyclic-year positions?

It is clear from information on the DOL site that it does not matter if the employee is working full-time or part-time. The standard salary level for exemption is $913 per week (or $47,476 annually). As such, if a part-time employee’s weekly pay doesn’t reach $913 per week, they are eligible for overtime.   

 

Split Level Ranges

 

  1. What are the split level pay ranges?

Split level pay ranges are salary ranges in which the new FLSA salary threshold falls somewhere in the current salary range. The split level salary ranges are 43-54 on the General Service salary schedules that are effective as of July 1, 2016.

 

     12. Based on OFM’s policy decision, are agencies required to update their salary determination policy, and would OFM SHR need to re-approve the policy?

State HR, as a result of a separate effort, will be conducting a statewide review of agency Salary Determination Policies and re-approval will be required. Details of the review will be provided to agency HR Managers within the next couple weeks.

 

Miscellaneous

 

  1. Based on OFM’s policy decision, are agencies required to update their salary determination policy, and would OFM SHR need to re-approve the policy?

State HR, as a result of a separate effort, will be conducting a statewide review of agency Salary Determination Policies and re-approval will be required. Details of the review will be provided to agency HR Managers within the next couple weeks.

 

  1. Who should agencies contact regarding agency specific questions?

Agencies should contact their assigned Labor and Personnel AAG.

 

  1. What if an employee takes LWOP and that brings them below the FLSA salary threshold?

This is a very fact specific question that should be asked of your assigned Labor and Personnel AAG. Although the FLSA does not mandate that employers provide employees paid leave of any kind, the law has an exception for public agency employees in these circumstances stating the exemption will not be lost. The FLSA rules states in part that “an employee of a public agency who otherwise meets the salary basis requirements . . . shall not be disqualified from the exemption . . . on the basis that such employee is paid according to a pay system established by statute, ordinance or regulation, or by a policy or practice established pursuant to principles of public accountability, under which the employee accrues personal leave and sick leave and which requires the public agency employee's pay to be reduced or such employee to be placed on leave without pay for absences for personal reasons or because of illness or injury of less than one work-day when accrued leave is not used by an employee because: (1) Permission for its use has not been sought or has been sought and denied; (2) Accrued leave has been exhausted; or (3) The employee chooses to use leave without pay.”  29 C.F.R. § 541.710(a).

 

  1. Is OFM bargaining this policy direction with all the unions prior to December 1, 2016?

Any bargaining will be done at the agency level, not globally.

 

Contacts

 

Your agency’s Assistant Attorney General

 

Connie Goff

State Human Resources

Connie.Goff@ofm.wa.gov

360-407-4133

 

Kristie Wilson

State Human Resources

Kristie.Wilson@ofm.wa.gov

360-407-4139