Notice: The U.S. Department of Labor has increased the salary threshold for the Fair Labor Standards Act to $844 per week or $43,888 per year for a full-year worker. The new rules go into effect July 1, 2024. Universities of Wisconsin employees who are impacted by this change will be contacted directly and provided with additional information in the coming months.
The Fair Labor Standards Act (FLSA) is a federal law through the Department of Labor (DOL) that establishes labor standards for public and private sector employers. The law defines a standard work week, establishes a national minimum wage and establishes parameters for working minors. In addition, the law guarantees overtime for certain positions.
The FLSA provides a set of standards to determine which jobs are covered by the act (“non-exempt”) and which jobs are not covered (“exempt”):
- Non-exempt positions are considered hourly positions and must receive overtime pay or compensatory time for hours worked over 40 in a workweek.
- Exempt positions are considered salaried positions and do not normally receive additional compensation for overtime work.
To qualify as exempt, an employee must satisfy the following three tests:
- Have a salary above the minimum salary threshold;
- Be paid on a “salary basis;” and
- Perform duties that qualify for an exemption.
Exemption Status Changes
Employees may change exemption status for various reasons. Information below is for employees who have been informed by their local Human Resources (HR) unit that their FLSA status may change. If you have questions about your specific situation you will need to contact your local HR unit.
Exempt to Non-Exempt
Overview: Understanding Exempt to Non-Exempt Status Changes
What Changes
If your job title changes to non-exempt, your exemption status will change from exempt to non-exempt. If you are non-exempt, you will:
- receive hourly pay
- record the hours you work (including start and end times)
- record your leave time
- need to get permission before working hours outside of your approved schedule
- receive overtime pay or compensatory (comp) time off (if eligible)
- earn a premium pay rate (time and a half) for every hour you work over 40 hours in a work week (Sunday through Saturday), or
- earn 1.5 hours of compensatory time credits for every hour you work over 40 hours in a work week
- Hours worked do not include paid time out of the workplace (for example sick leave, vacation time, etc.)
- You must get pre-approval for overtime or compensatory time
What Stays the Same
Changing to a non-exempt status does not change your:
- job responsibilities
- current base pay rate
- benefits
- employment category
- operational area
Impacts to Benefits, Leave and Other Changes
Why Exemption Status May Change
Employees may change exemption status for various reasons. Below are some examples of why your status may change. Employees may change exemption status as a result of a salary change or due to a title change as a result of the TTC Project.
If you do not know why your status is changing please contact your local HR.
Change Due to Salary
Effective July 1, 2024, the U.S. Department of Labor ruled to increase the minimum salary threshold to $844 per week, $43,888 per year for a full year worker.
If an employee’s salary is less than $844 per week or $43,888 per year for a full year, in most instances they will be classified as non-exempt according to the U.S. Department of Labor.
Change Due to Job Title
As a result of the Title and Total Compensation (TTC) Project, you and your supervisor or local Human Resources contact are talking about a possible change to your:
- job title
- position description
- exemption status under the Fair Labor Standards Act (FLSA)
The university reviewed the exemption status for all proposed new job titles as part of the TTC Project. According to U.S. Department of Labor and FLSA guidelines, your proposed new job title is a non-exempt title.
Non-Exempt to Exempt
Overview: Understanding Non-Exempt to Exempt Status Changes
What Changes
If your exemption status changes to exempt you:
- do not usually receive overtime pay for working more than 40 hours in a work week
- are paid a salary
With a salary, you receive the same pay every week. Your pay does not change based on the number of hours you work.
What Stays the Same
Changing to exempt status does not change your:
- job responsibilities
- current base pay rate
- benefits (see note on change in vacation accrual)
- employment category
- operational area
Impacts to Benefits, Leave and Other Changes
- If you are an exempt University Staff employee, you may have the option to become Academic Staff due to Employee Choice. Please contact HR for more information.
Why Exemption Status May Change
Employees may change exemption status for various reasons. Below are some examples of why your status may change. Employees will change exemption status as a result of a salary change or due to a title change as a result of the TTC Project.
If you do not know why your status is changing please contact your local HR.
Change Due to Job Title
As a result of the Title and Total Compensation (TTC) Project, you and your supervisor or local Human Resources contact are talking about a possible change to your:
- job title
- position description
- exemption statusunder the Fair Labor Standards Act (FLSA)
The university reviewed the exemption status for all proposed new job titles. According to U.S. Department of Labor and FLSA guidelines, your proposed new job title is an exempt title.
Change Due to Salary
Effective July 1, 2024, the U.S. Department of Labor ruled to increase the minimum salary threshold to $844 per week, $43,888 per year for a full year worker.
If an employee’s salary is less than $844 per week or $43,888 per year for a full year, in most instances they will be classified as non-exempt according to the U.S. Department of Labor.
Definitions
Exempt status: Exempt positions are considered salaried positions that do not normally receive additional compensation for overtime work. Employers pay you a salary instead of an hourly wage.
Non-exempt status: Fair Labor Standards Act (FLSA) regulations protect your position. By state and federal law, you must receive overtime pay if you work more than 40 hours in a work week. Employers pay you on an hourly basis.