University of Nebraska Lincoln Fair Labor Standards Act (FLSA) Frequently Asked Questions (FAQ) For Affected Employees

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1 Table of Contents General Statement... 3 Fair Labor Standards Act... 3 What is the?... 3 What are the changes to the FLSA?... 3 Are other employers in the United States affected by these changes?... 3 What is the difference between an exempt and non-exempt employee?... 3 When is the effective date for compliance?... 3 Who is impacted by this change?... 3 How does this impact me if I am a part-time employee?... 4 Overtime, Compensatory Time Off, Hours Worked... 4 What are considered hours worked?... 4 What counts toward hours worked for overtime purposes?... 4 Can I receive compensatory time off instead of being paid overtime pay?... 5 What is UNL s work week?... 5 Will the new regulations require me to keep track of my hours and have my supervisor approve my time?... 5 As an hourly non-exempt employee, do I have to report all of my hours worked?... 5 As a salary exempt employee, I typically worked 50 hours per week. Now that I am hourly non-exempt, does this mean if I work 50 hours per week I will earn more money?... 5 As an hourly non-exempt employee, can I work more than 40 hours in a work week and decide not to report the additional hours?... 5 As an hourly non-exempt employee, can I decide to work more than 40 hours in a work week without prior approval from my supervisor?... 6 Can my work hours change within a work week?... 6 Can I work 50 hours one week and 30 hours the next yet record 40 hours of work each week since it adds up to 80 hours?... 6 Can my supervisor require me to work extra hours and not pay me for it if I am non-exempt?... 6 Can I volunteer to work more than 40 hours without pay or compensatory time off?... 6 Payroll and Benefits... 6 What happens to my pay due to these regulations?... 6 How do I determine my hourly pay rate?... 6 Does this mean I am getting a raise? Nov 2016

2 Will my payday change?... 7 What does arrears mean with the change to a bi-weekly pay cycle?... 7 Bi-weekly paid employees are paid for two weeks and are paid two weeks in arrears. This means that there is a two week delay from the end of the pay period until the paycheck date. When you convert from a monthly pay cycle to a bi-weekly pay cycle it results in a delay in pay and a lower paycheck during the month of conversion As a bi-weekly paid employee, upon retirement or leaving the University you will receive a final paycheck for the hours worked during your last two weeks of employment What will happen to my leave benefits?... 8 Will any of my insured benefits change?... 8 Job Status and Category... 8 Will my job title change as a result of these FLSA regulations?... 8 Will my job category change?... 8 Is there any way I can remain as a salary exempt employee, exempt from overtime, even if I make less than the new salary threshold?... 8 Are there some positions that do not require a salary test?... 8 Questions... 8 Who should I ask if I have more questions about how this change affects me?... 8 Is the Employee Assistance Program (EAP) available if I want to talk about concerns?... 9 Where else can I find information regarding the FLSA? Nov 2016

3 General Statement These frequently asked questions and answers are designed to help employees who are affected by the new 2016 regulations understand how they are impacted. An employee is considered an affected employee if the employee makes less than $913 per week or $47,476 per year as of December 1, 2016, and are not otherwise legally exempt from the FLSA. If you have questions about whether or not you are an affected employee, please contact your supervisor or UNL Human Resources. Please note, this document is for informational purposes only and is not intended to replace or alter any of the practices, notices, policies, regulations or laws that cover the FLSA. It does not provide any rights or privileges beyond what is provided in University policies. If this guidance conflicts with any University policy, the University policy controls. Fair Labor Standards Act What is the? The FLSA is a federal law governing several time and labor issues. It establishes minimum wage, overtime pay, record keeping and child labor standards affecting millions of full-time and part-time workers in the private sector as well as in federal, state, and local governments. What are the changes to the FLSA? The foremost change is the dollar amount for the salary test to determine if an employee receives overtime pay. Congress enacted the original legislation in 1938, and various changes were made to the regulations over the years. The salary test exemption regulations were last revised in This year, changes were made to the salary test that determines whether a position is exempt or non-exempt from the minimum wage and overtime provisions of the law. The former salary test amount was $455 per week or $23,660 per year and the new amount is $913 per week or $47,476 per year. Are other employers in the United States affected by these changes?. What is the difference between an exempt and non-exempt employee? The FLSA categorizes employees as either exempt or non-exempt, meaning they are either exempt (not covered) under the regulations based on duties and salary tests contained within the Act or non-exempt (covered) under the regulations. The exempt employee is usually paid on a salary basis and does not receive extra compensation for overtime hours worked. A non-exempt employee is generally paid on an hourly basis and receives time and one-half overtime compensation for all hours worked over 40 in a work week. The FLSA allows public employers to either pay or give compensatory time off to an employee, at the employee s discretion, for overtime hours worked, both at a time and one-half rate. To summarize, an exempt employee is not paid overtime and a non-exempt employee is paid overtime. A non-exempt employee must be paid for hours worked. When is the effective date for compliance? December 1, Who is impacted by this change? 3 Nov 2016

4 Employees who make less than $913 per week or $47,476 per year as of December 1, 2016, and are not otherwise legally exempt from the regulations, will convert from being paid on a salary exempt basis to being paid on an hourly non-exempt basis. As of December 1, 2016, affected employees will be paid as an hourly employee and will be paid for all hours worked, including eligible overtime (or compensatory time off). How does this impact me if I am a part-time employee? You must earn more than $913 per week or $47,476 per year to meet the salary test. The salary test must be met regardless of part-time or full-time status. For example, if a salary exempt employee is at.50 FTE earning $32,000 per year, the wage of $32,000 cannot be doubled to annualize the wage in order to remain salary exempt. Overtime is paid for all hours actually worked over 40 in a work week regardless of part-time or full-time status. Overtime, Compensatory Time Off, Hours Worked What are considered hours worked? A salary exempt employee is not required to document hours worked. As an hourly paid non-exempt employee, understanding what counts as hours worked is essential. Below is a Quick Reference Guide to help determine what typically counts as hours worked. Please refer to the Hours Worked document at for further information and a detailed explanation regarding each type of situation listed below. Type of situation Is It Hours Worked? Performing work Rest Period Lunch Break No Travel Sometimes-see policy 24/7 Operations Sometimes-see policy Sleep Time Sometimes-see policy Show up Time No Waiting Time (on duty) Waiting Time (off duty) No On-Call (on premises) On-Call (off premises) Sometimes-see policy Alternative Work Site/Working From Home Changing Clothes Cleaning Tools & Equipment Training Time and Meetings Sometimes-see policy De Minimis (insignificant amount of time) No What counts toward hours worked for overtime purposes? 4 Nov 2016

5 Overtime is paid for all hours actually worked over 40 in a work week. Paid time off (vacation, sick leave, holiday pay, etc.) does not count toward hours worked. All hours worked and approved paid time off for a work week are paid, however only actual hours worked will be used to calculate the number of hours worked when determining eligibility for overtime pay or compensatory time off. Can I receive compensatory time off instead of being paid overtime pay?. Upon agreement between you and your unit, you may receive compensatory time off (in the form of time and one half) for hours worked in excess of 40 in a work week. This means that you can request time off in the future and utilize your compensatory time off hours that you earned. Per University policy, the maximum number of hours you can currently accumulate is 60 hours. However, some positions may have a higher maximum. and some units may require employees to be paid their accumulated compensatory time off hours upon meeting a certain level of compensatory time. What is UNL s work week? The work week begins at 11:01 p.m. Thursday and continues through 11:00 p.m. the following Thursday. For most payroll and timesheet related documents at UNL, the work week is shown as beginning on Friday and ending on Thursday because the majority of our employees work during the day. Employees who work in the evenings will need to adhere to documenting hours worked following the hourly definition as stated in policy as beginning at 11:01 p.m. Thursday ending at 11:00 p.m. the following Thursday. Will the new regulations require me to keep track of my hours and have my supervisor approve my time?. As part of complying with this regulation, you will be required to document your work related hours (hours worked, paid leave and unpaid leave time) starting December 1, Your unit s payroll office will provide instructions on submitting this documentation. Please ensure that you understand your unit s policies and procedures regarding your work schedule and that you are required to obtain approval prior to working more than 40 hours per week. As an hourly non-exempt employee, do I have to report all of my hours worked?. Hourly non-exempt employees must account for all time worked. All time worked must be reported and recorded. As a salary exempt employee, I typically worked 50 hours per week. Now that I am hourly nonexempt, does this mean if I work 50 hours per week I will earn more money? You will be paid for all hours worked including additional hours beyond your normal schedule. You will be paid overtime (or compensatory time off) if you work more than 40 hours in a work week. Your unit and supervisor may implement a new work schedule to reduce the amount of hours you work in order to manage expenses. As an hourly non-exempt employee, can I work more than 40 hours in a work week and decide not to report the additional hours? No. Hourly non-exempt employees must account for all time worked. All time worked must be reported and recorded. 5 Nov 2016

6 As an hourly non-exempt employee, can I decide to work more than 40 hours in a work week without prior approval from my supervisor? No. Any hours worked in excess of 40 per week and any change in your normal schedule must have supervisory approval prior to performing the work. Can my work hours change within a work week?, with your supervisor s prior approval. Hourly non-exempt employees must account for all time worked during the work week in which it is worked so that additional hours, overtime (or compensatory time off) are compensated accurately. For example, rather than working 8 hours on Monday and Tuesday, you might be approved to work 10 hours on Monday and 6 hours on Tuesday. Any change in schedule must be approved in advance. Can I work 50 hours one week and 30 hours the next yet record 40 hours of work each week since it adds up to 80 hours? No. There are two reasons: 1) As an hourly paid non-exempt employee you must account for all time worked during the work week in which it is worked. In this example, you would be paid 40 hours plus 10 hours of overtime (or compensatory time off) for the week you worked 50 hours. 2) As a full-time employee, you must account for at least 40 hours per week; including hours worked and/or paid time off. In this example, in the week you worked 30 hours, you must be paid for 10 hours of paid time off in order to total 40 hours. Can my supervisor require me to work extra hours and not pay me for it if I am non-exempt? No. UNL is required to pay you for all hours worked, including time worked in excess of 40 hours in a work week, unless both you and your supervisor agree to accumulate compensatory time off instead, but both parties must agree. You may contact UNL Human Resources if you have further questions. Can I volunteer to work more than 40 hours without pay or compensatory time off? No. Payroll and Benefits What happens to my pay due to these regulations? Your wage does not change as a result of the changes to the regulations. Your monthly pay rate will be converted to an hourly pay rate. You will be paid additional hours worked and eligible overtime (or compensatory time off) at the rate of one and one half times your hourly wage for hours worked over 40 in a work week. How do I determine my hourly pay rate? Your hourly pay rate is your annual wage divided by the full-time equivalent (FTE) of your appointment. Example of 1.00 FTE: An FTE of 1.00 is equal to 2,080 hours per year. For example, if your annual wage is $40,000, divide $40,000 by 2080, which results in an hourly rate of $ per hour. 6 Nov 2016

7 Example of.50 FTE: If your appointment is less than 1.0 FTE, your hourly wage calculation is prorated by your appointment s FTE percentage. For example, if your annual wage is $30,000 and your appointment is a.50 FTE, you will multiply 2080 x.50 (equals 1,040 hours). $30,000 divided by 1,040 hours equals an hourly rate of $ per hour. Does this mean I am getting a raise? No. Your wage remains the same. You will be paid as an hourly employee and you will be paid for all hours worked, including additional hours worked and eligible overtime (or compensatory time off) if you work more than 40 hours in work week. Will my payday change?. Pay practices at UNL require affected employees to convert from being paid monthly on a salary basis to being paid bi-weekly on an hourly basis, which results in a change in pay periods and pay dates. Monthly paid employees are paid once per month. Bi-weekly paid employees are paid every two weeks. Monthly paid employees are paid for time worked in the current month and bi-weekly paid employees are paid for two weeks and are paid two weeks in arrears. This conversion results in a delay in pay and a lower paycheck during the month of conversion. The University is implementing the conversion to a bi-weekly pay cycle in March 2017 to give employees time to adjust to the delay in pay. Monthly pay conversion period, December 2016 through February 2017: You will record your hours worked starting in December 2016 and will continue to be paid on a monthly basis through February If applicable, additional hours/overtime will be paid on the monthly paychecks or compensatory time off will accumulate according to a posted schedule. In summary, from December 2016 to February 2017 you will be paid on the normal monthly pay date and be paid exactly the same unless unpaid leave is recorded or you work additional hours/overtime. Adjustment paycheck, March 30, 2017: You will receive a partial March paycheck on March 30, 2017, for hours worked from March 1, 2017, through March 16, The March paycheck will include a reduced number of paid work days than your normal full month of pay. It will also include additional hours/overtime from February 17, 2017 through March 16, A full month of benefits and most deductions will be subtracted. This results in approximately half of the normal gross pay before full deductions are subtracted for the month, so please plan accordingly. Bi-weekly paycheck, April 2017: The first bi-weekly paycheck will be on Thursday, April 13, 2017, for hours worked from March 17, 2017, to March 30, 2017, with bi-weekly benefit deductions. Additional payroll details, a calendar with a Payroll Conversion Information sheet and required action items pertaining to this payroll conversion for employees are available at What does arrears mean with the change to a bi-weekly pay cycle? Bi-weekly paid employees are paid for two weeks and are paid two weeks in arrears. This means that there is a two week delay from the end of the pay period until the paycheck date. When you convert from 7 Nov 2016

8 a monthly pay cycle to a bi-weekly pay cycle it results in a delay in pay and a lower paycheck during the month of conversion. As a bi-weekly paid employee, upon retirement or leaving the University you will receive a final paycheck for the hours worked during your last two weeks of employment. What will happen to my leave benefits? Your vacation and sick leave benefits will remain the same. Will any of my insured benefits change? No. Your insurance coverage will remain the same. Payroll deductions for insurance deductions will coincide with your new pay cycle. Job Status and Category Will my job title change as a result of these FLSA regulations? No. Will my job category change? No. Affected Managerial/Professional employees will remain Managerial/Professional employees. Staff members will change from Salary staff members to Hourly staff members effective December 1, 2016, but will maintain all rights and privileges of Managerial/Professional status including paid leave benefits. All other employees will maintain their job category, rights and privileges. Is there any way I can remain as a salary exempt employee, exempt from overtime, even if I make less than the new salary threshold? No. Your exemption status is determined by your wage and the duties you perform. As an affected employee (not exempted by law), even though your duties previously indicated you were allowed to be exempt from overtime and paid on a salary basis, under the new changes to the regulations, if your wage is below $913 per week or $47,476 per year you must convert to an hourly paid non-exempt status unless you meet certain limited exemptions. Are there some positions that do not require a salary test?. The FLSA exempts certain positions from the salary test such as physicians, attorneys and teachers. As an affected employee, your position has been reviewed and is considered non-exempt. Questions Who should I ask if I have more questions about how this change affects me? You can start by having a conversation with your supervisor to understand how this will impact you in your role and how your unit will communicate policies and procedures. If you have additional questions, please contact Human Resources at Resources are available online at 8 Nov 2016

9 Human Resources and Payroll will host FLSA information open house sessions on both campuses on the following dates and times: December Thursday December 8 9:00-12:00 City Union Tuesday December 13 9:00-12:00 East Campus Union February Dates and times will be announced at a later date. Is the Employee Assistance Program (EAP) available if I want to talk about concerns?. The EAP is always available to UNL faculty, staff and their families. You may set up an appointment by calling the EAP office at Where else can I find information regarding the FLSA? 9 Nov 2016