Higher Education Pay Guidance under the Fair Labor Standards Act
Over the years, higher education organizations have had to restructure their compensation schemes multiple times to comply with changes in the Fair Labor Standards Act (FLSA). The U.S. Department of Labor (DOL) enforces this law, which determines federal minimum wage and overtime pay thresholds. Also, the FLSA classifies employees as either exempt or non-exempt from the basic salary and overtime pay requirements. Here’s a look at general FLSA provisions for university and college workers.
Like any other public or private employer, high educational institutions are subject to the federal minimum wage requirement. The basic pay rate has been $7.25 per hour since 24th July 2009, although this threshold may change soon.
University employees classified as “non-exempt” are entitled to overtime pay. The basic $7.25 per hour rate applies for the regular 40 hours worth of workweek. Thus, overtime compensation for this category of employees is the number of extra hours worked multiplied by 150% or higher of the basic pay rate.
Institutions should carefully examine FLSA rules on salary deductions. For example, for certain items, such as employees’ uniforms, it may be illegal to make salary deductions beyond the minimum regular wage rate and overtime pay threshold.
“White Collar” Exemptions
The FLSA minimum wage and overtime thresholds do not apply for university employees under the “exempt” category. If you’re considering classifying any member of staff as exempt, here’s the general criteria to help you get your classification right:
- The employee must have a basic, fixed salary that doesn’t depend on variables, such as hours worked or quality of work (salary basis test)
- The employee’s weekly salary must meet or exceed a specified threshold (salary level test)
- The employee’s primary duties must satisfy the criteria set forth by DOL (duties test)
Salary Threshold for Exemption
The “salary level test,” based on which exempt staff is classified, has been reviewed severally since the FLSA was first enacted. From 1st January 2020, higher education institutions have been subject to a new minimum pay rate for the white-collar exemption. To legally deny an employee overtime pay, as per the new DOL standard, you have to be paying them at least $684 per week ($35568 annually).
Exempted Higher Education Employees
To pass the “duties test” and qualify for an exemption, university or college workers must be involved in “white collar” responsibilities like:
- Administrative duties, such as college admissions counseling
- Professional workers, such as educators, legal, or medical practitioners
- Lecturers, tutors, and other staff whose primary role is to teach at an educational institution
- Executive employees
- Student-employees teaching at the university
Other FLSA Requirements for Higher Education
Establishments of higher learning should keep records that demonstrate compliance with the FLSA minimum wage and overtime requirements. For each employee, the institutions must document personal information, total weekly hours worked, overtime worked, deductions or additions to salary, and other compensation details.
Compensated Break Time for Nursing Mothers
The law requires higher education institutions to provide compensated breastfeeding break time to employees that are nursing mothers. University workers who qualify for this provision are classified as non-exempt, meaning that they qualify for overtime pay and are protected by the minimum wage requirement.
State laws may offer broader benefits to nursing mothers working for higher education establishments. For example, exempt workers may be entitled to breastfeeding time and space in some states. Others may mandate the provision of these perks to nursing mothers for an extended duration, such as beyond 12 months after the child is born.
Have you harmonized your university employees’ salaries and classifications with the latest FLSA requirements yet? If you need professional advice on any aspect of higher education management, contact the experts at McKnight Associates, Inc.