Fair Labor Standards Act (FLSA) Information

The Fair Labor Standards Act (FLSA) is the United States’ federal wage and hour law, administered by the US Department of Labor (DOL). Among other things, the FLSA establishes the federal minimum wage and sets overtime pay requirements for employees in the private and government sectors. Under the FLSA, some employees are exempt from the wage and overtime provisions of the law and some are non-exempt.

Exempt Employees

• Considered “salaried” and do not earn overtime pay for working over 40 hours in a workweek.
• Duties test: Employee’s primary job duties must qualify for one of the exemptions (executive, administrative or professional) as outlined in the FLSA regulations.
• Salary test: Employee must earn at least $35,568 annually ($684 per week).
• Teaching, Law, & Medicine Exception: Employees whose primary duties are teaching, practicing law, or practicing medicine can be classified as exempt even if they do not meet the salary test. This is a special and limited exemption under the FLSA.

Non-Exempt Employees

• Considered “hourly” and earns overtime pay for working over 40 hours in a workweek.
• Primary job responsibilities do not meet the duties test and/or the employee’s salary does not meet the salary test.

Changes for 2024-2025

• Effective July 1, 2024, the DOL updated the FLSA regulations by increasing the salary threshold. Employees must now earn at least $43,888 annually ($844 per week) to pass the salary test for exemption.
• Effective January 1, 2025, the salary threshold will increase again to $58,656 annually ($1,128 per week).

Non-exempt employees must be compensated for ALL hours worked. What constitutes “hours worked” under the FLSA? Simply put, it is “time spent by the employee in furtherance of the employer’s interests.”

Hours Worked

• Hours worked include hours during which an employee is actually performing productive work as well as the hours when no work is performed but the employer requires the individual to remain available for the next assignment.
• Such work may be performed at the employer’s premises, an employer related job site as well as working at home. An employee must be compensated for all “hours worked” for the employer regardless of where the work is performed.
• Additionally, nonexempt employees responding to work emails, working on projects from home after hours, attending work related trainings or who are on-call or traveling for the job are entitled to compensation for such time.
• Work, even if not requested by the supervisor(s), but the employee suffered or is permitted to work is hours worked. For example, an employee may voluntarily continue to work at the end of the shift for any number of reasons such as to finish an assigned task, etc. However, the reason is immaterial. The employer knows or has reason to believe that the employee is continuing to work and that time must be compensated at hours worked.
• The following listing is not all-inclusive but may be useful as a guide in determining the nature of hours worked. Expanded details and examples on several of the summarized items are included in the information below.

Work Time

• Principal activities and preparatory work associated with principal activities.
• Meal periods:
  • if employees are not free from performing job duties;
  • if too short to be useful to employees (less than 30 minutes)
• Training programs required by employer.
• Time spent traveling during normal work hours. Outside of normal work hours, time spent as a driver of a vehicle during overnight travel.
• Scheduled On-Call time where an employee is required to restrict personal activities such that the employee cannot use his/her time effectively for their own purposes.
• Charitable/volunteer work requested or controlled by employer.

Not Work Time

• Absences and paid leave time as per University policies.
• Meal periods involving no duties and lasting 30 minutes or longer.
• Training program voluntarily attended, outside of working hours, unrelated to regular duties, and involving no productive work.
• Traveling:
  • from home to airport or other terminal;
  • from home to work site and vice versa; or
  • on overnight trips as a passenger outside of regular working hours (unless performing job related duties).
• Scheduled on-call time where employee merely leaves telephone number or carries a paging device. Employees required to reside on employer’s premises when not on duty.
• Charitable/volunteer work not requested or controlled by the employer.

On-Call Time

This is one of the more confusing areas when determining what time is considered “hours worked.” Whether hours spent on-call is hours worked is a question of fact to be decided on a case-by-case basis. All on-call time is not hours worked. The information below provide some general guidelines, however, further conversation may be needed for specific situations.

• Examples of Active On-Call Times (Paid)
  • If employees’ activities are so restricted that they cannot use the time to run errands, make dinner, do chores, or attend a child’s soccer game, they will be considered to be “working” or “engaged to wait” and must be paid.
  • The employee is not completely relieved from duty and cannot use the time effectively for his own purposes unless they are told in advance that they may leave the job and that they will not have to commence work until a specified hour has arrived. Whether the time is long enough to enable them to use the time effectively for their own purposes depends upon all of the facts and circumstances of the case.
  • On-site standby: Employees are required to remain on the employer’s premises during their on-call shift. They must be physically present and ready to perform work duties if called upon. This often applies to professions like security guards, maintenance personnel, or emergency response teams.
  • Immediate response requirement: Employees are expected to be available to respond to calls or requests for work within a short timeframe, such as 15 or 30 minutes. They may need to be accessible and ready to report to work promptly, either at the employer’s premises or at a designated location.
  • Limited geographic area: Employees are restricted in their movements and must remain within a specific geographic area during their on-call time. This can apply to certain professions where the response time is critical, such as healthcare professionals or field technicians.
  • Specific duties during on-call time: Employees may be assigned specific tasks or responsibilities during their on-call shift, even if they are not actively performing work. For example, they may be responsible for monitoring systems, conducting regular checks, or being available for consultations or guidance.
• Examples of Inactive On-Call Times (Not Paid)
  • An employees who is free to use their time to engage in their ordinary, daily activities, subject to reasonable restrictions, the law does not require that they be paid. Reasonable restrictions on the employee (for example, a no-drinking-alcohol rule) will not convert on-call time into compensable hours worked.
  • Periods during which an employee is completely relieved from duty and which are long enough to enable them to use the time effectively for their own purposes are not hours worked.
  • Standby shifts: Employees are required to be available to respond to calls or requests for work but are not required to be physically present at the workplace. They may be at home or any location of their choosing, as long as they can be reached if needed.
  • Pagers or cell phone availability: Employees carry a company-provided cell phone and are expected to be reachable during their on-call period. They can engage in personal activities as long as they are accessible to receive calls or respond promptly.
  • Restrictions on personal activities: Employees may have some restrictions on their personal activities during their on-call time, such as not being able to consume alcohol or travel a significant distance. However, as long as the restrictions do not overly burden the employee or significantly limit their freedom, the time is generally considered inactive on-call time.
  • Scheduled on-call rotations: Employees are assigned specific on-call shifts on a rotational basis, but they are not required to perform any work unless called upon. During their scheduled on-call time, they can engage in personal activities but must be prepared to respond if needed.
• Employees residing on employer’s premises or working at home – Employers are not typically required to pay employees for sleeping time if the employee resides on the employer’s premises or works from home.
  • EXAMPLE: When not scheduled to work, Resident Hall Coordinators who may live on site generally have sufficient periods of time in which he or she is free to engage in personal activities or leave the employer’s premises for personal reasons. In these situations, the Resident Hall Coordinator would not be compensated for sleeping time although they reside on site. An exception would apply in the situation when an individual is on-line. Refer to the on-call section of this document for more details

Waiting Time

• Time that an employee is waiting but not required to wait as a part of their job responsibilities, such as showing up early for a shift, is not compensable.

Meal and Break Periods

• Federal law does not currently require employers to provide meal, lunch, or break periods for their employees.
• Non-meal breaks (usually lasting 15 minutes or less) must be paid time.
• Meal or lunch breaks (usually lasting 30 minutes or more) is not paid as long as the employee is free to do what they wish and is completely relieved from duty during the break
• Please note that these stipulations do not apply to Law Enforcement Officers on duty who are effectively working at all times during their shift.

Remote Access/Cell Phone/VPN

• Mercer tracks time on the quarter hour. If an employee were to skim their emails or answer a quick call from home that took 7 minutes or less then this time would be non-compensable.
• However, once that halfway point is crossed then at least one quarter of an hour would be compensable up to however long it takes to complete the activity.
• Since the availability of VPN access on an ongoing basis can create overtime commitments and/or liability for the university if all hours worked are not reported, this access will be removed for those employees transitioning from exempt to non-exempt unless they are an approved remote employee.
• Requests for VPN reinstatement must be submitted to the IT Help Desk and is subject to supervisor and HR approval.
• Some exceptions for VPN access can be made on a temporary, as needed basis, or if off-campus work is a regular, ongoing requirement for the position.

Lectures/Meetings/Training Programs

• Time spent at these events is compensable unless it is outside the employee’s normally scheduled hours, it is voluntary, not directly job related, and no other work is concurrently performed.

Travel

• Home to Work Travel – Travel from the employee’s home to their work site and back home at the end of the day is engaged in ordinary home to work travel, which is not compensable.
• Travel as Part of the Job – Travel as part of the employee’s job, such as travel from job site to job site during the workday, is work time and must be counted as hours worked.
• Home to Work on a Special One Day Assignment in Another City – An employee who regularly works at a fixed location in one city is given a special assignment in another city and returns home the same day. The time spent traveling to and from the other city is work time, except that the employer may deduct the time the employee would normally spend commuting to the regular work site.
• Travel Away from Home – Travel away from home during an employee’s regular work hours is considered compensable, even if it occurs on a non-work day.
• Passenger – Travel outside of the employee’s regular work hours as a passenger on a plane, train, boat, bus, or car is not hours worked if the employee is free to engage in whatever activities they would like. However, if work is being performed this would be compensable time.

Other Available Resources

• Department of Labor Hours Worked
• On-Call Time and Waiting Time

Time Worked

Non-exempt staff must be paid for any hours the staff member is “suffered or permitted” to work by the supervisor. This includes any time the staff member is working, whether it is during their regular work hours or at other times. Some examples include:

• Regular scheduled hours
• Returning work related emails or phone calls outside of regular work hours
• Arriving at work and beginning work prior to the start of the agreed upon work schedule
• Remaining at the desk during the lunch hour and answering phone calls, returning emails or any other work related activity
• Rest periods or meal periods that are 15 minutes or less should be paid as hours worked
• Meal periods lasting 30 minutes or more are not compensated as work time as long as the employee is completely relieved from duty for the purpose of eating regular meals.
• Employee is not relieved if they are required to perform any duties, whether active or inactive, while eating

Pay & Overtime

• Paid on an hourly basis, even though most full-time non-exempt staff will continue to receive their paycheck once a month
• Must accurately record all hours worked in Workday or other mechanism as instructed by their supervisor
• Request approval to work overtime in advance (or follow the departmental process for requesting overtime)
• Overtime hours must be compensated via additional pay or by flexing the time off in the same pay period, with supervisor approval
  • Time worked up to 40 hours is considered straight time and is compensated at 1x the hourly rate
  • Time worked above 40 hours is overtime and is compensated at 1.5x the hourly rate
• Against federal law for Mercer employees to accumulate “comp time” and as such, under NO circumstances can OT hours be carried forward to a future pay period
• Overtime that has not been approved by the supervisor in advance must still be paid

Work Schedules & Paid Time Off

• Must work the hours/schedule as set by their supervisor (The schedule for full-time employees converting from exempt to non-exempt will 40 hours.)
• Working unapproved overtime is subject to disciplinary action
• Requests to work outside of the agreed upon work hours must be discussed with the supervisor and with sufficient notice necessary to make adjustments to work hours and/or work coverage
• Paid time off and other leaves (i.e. jury duty, bereavement, etc.) must be reported in Workday
• Workweek at Mercer begins at 12:00 a.m. Sunday and ends at 11:59 p.m. on the following Saturday

Flex Time Off

A supervisor may schedule time off within the same pay period to offset the overtime hours worked by non-exempt employees, as long as all the following conditions are met:

• The time off granted must be at the rate of one hour off for every hour of overtime worked up to 40 hours in a workweek, and at the rate of one and one-half hours off for every hour of overtime worked in excess of 40 hours in a workweek. Time off should be granted at a time agreeable to both the supervisor and the employee.
• The offsetting time off must be taken during the same pay period in which the overtime was worked. The time off may be spread over several days of the pay period, and it may be granted before or after the overtime work is performed, as long as it is taken within the same pay period. Any overtime which has not been offset by time off taken within the pay period must be compensated as paid time.
• The time report submitted in Workday must accurately record hours worked on the days they are actually worked, as well as any time off taken.

Workday Job Aids

• Enter My Time – Non-Exempt Monthly Employees
• Enter My Time – Non-Exempt Bi-Weekly Employees
• How to Enter Comp (“Flex”) Time in Workday
• Submit Time Off Leave Requests
• View Leave Accrual Balances

Work Schedules & Paid Time Off

Exempt staff are employed to deliver an expected set of outcomes at an expected quality level, not based upon working a certain number of hours. It is likely that exempt staff will regularly work more than 40 hours each week to get the job done. In addition, they must:

• Work whatever work schedule is necessary to successfully complete requirements of the job
• Be present for work during the hours that their office/department is open, unless supervisor sets and approves an alternative work schedule
• Request vacation and other planned time off from their supervisor in advance
• Track all absences to be approved by supervisor in Workday
• Inform their supervisor when they may need to be out of the office
• Any time worked over 40 hours is not eligible for overtime pay or time off
• Can work flexible schedule upon approval of supervisor

Workday Job Aids

• Submit Time Off Leave Requests
• View Leave Accrual Balances

How often do my non-exempt employees need to submit their time worked?

• If compensated on a monthly basis, all time must be submitted in Workday within the first few days after the completion of a month.
• If compensated on a bi-weekly basis, all time must be submitted in Workday by the end of the pay period.

As a supervisor, do I have to approve time worked and time off submitted in Workday?

• Yes, every supervisor or their approved designee should review and approve all time worked and time off submitted by their direct reports in Workday.

Should overtime be approved by me in advance?

• Yes.

If I do not pre-approve overtime hours, do I still have to pay it?

• Yes, if the employee worked the additional hours, even though not approved, the overtime hours must still be paid.
• Failure to get approval prior to working overtime is subject to disciplinary action.

Can I flex a non-exempt employee’s schedule to avoid paying overtime?

• Yes, this is at the supervisor’s discretion. Keeping accurate records in Workday will aid in the event there is a discrepancy in the amount of hours worked.
• Overtime hours must be compensated via additional pay or by flexing the time off in the same pay period, with supervisor approval.
  • Time worked up to 40 hours is considered straight time and is compensated as 1x the hourly rate.
  • Time worked above 40 hours is overtime and is compensated at 1.5x the hourly rate.
• It is against federal law for Mercer employees to accumulate “comp time” and as such, under NO circumstances can OT hours be carried forward to a future pay period.

Can an employee “volunteer” to work extra hours?

• No, under FLSA, non-exempt employees who perform any type of work in which the employer benefits, must be compensated for that work.

What if the employee refuses to submit their hours worked or clock in (for those who use a time clock)?

• Employees should be advised of the expectation and requirement they record all hours worked.
• FLSA regulations require time tracking for non-exempt employees and hold the employer/supervisor responsible for maintaining time records.
• If the employee does not comply with the practice of timekeeping, then the supervisor should note the hours worked and discuss the matter with the employee.
• If the employee fails to cooperate, the matter can be addressed with Human Resources.

Workday Job Aids

• Access a Worker’s Time & Request Time Off for a Worker
• Approve Time For Multiple Workers
• Approve, Send Back or Deny Submitted Time
• Correct Time Off and Leave of Absence
• Modify or Delete Time For Non Exempt Employees
• Modify or Delete Time For Exempt Employees

Does the FLSA apply to every employee?

Yes, the FLSA applies to all employees of the university. There are different rules depending on whether an employee is designated as a non-exempt or exempt employee. The FLSA presumes that a position is non-exempt unless it meets the current requirements to be exempt.

I work 20 hours a week and make $25,000 per year ($480/week). Shouldn’t I be exempt since my full time salary would be $50,000 and exceeds the minimum salary requirement?

The Fair Labor Standards Act is based upon a weekly salary, not an annualized salary. The law does not allow pro-rating of pay for purposes of complying with the salary level test. It does not matter whether you work one hour a week or 100 hours per week the minimum salary for exemption remains $844/week effective 7/1/2024.

My salary is above the threshold, so why am I being moved to non-exempt status?

In review of all positions at Mercer, some job classifications as a whole were moved to non-exempt status even though there may be employees in that classification with an annual salary either below or above the FLSA threshold. If the job classification was moved to non-exempt, then all positions within that classification were moved regardless of the employee’s annual salary.

If I am moved to non-exempt statues, does this mean I am getting a demotion?

No, you are not getting a demotion and your work remains very valuable to your department and the university. Your status is being changed to non-exempt to comply with this change in regulations. The FLSA status of exempt or non-exempt simply refers to a legal designation for each position at the university and is not related to an individual employee.

If my position is changed to non-exempt, how will this impact my benefits?

Your benefits will not be impacted by this change. You will retain the same vacation and sick leave accrual rates you had before you were changed to non-exempt.