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Compensation (HR-200)

HR-202 FLSA Status

Summary

The University complies with the provisions of the Fair Labor Standards Act (FLSA) applicable to public employers and educational institutions. In an effort to assure compliance with the FLSA, the University has established this policy to achieve consistent administration of pay among all campuses. The University classifies each employee or position as exempt or nonexempt. An employee is classified exempt if determined to be an executive, administrative, professional, or outside sales employee as defined by FLSA. All other employees are classified as nonexempt.

Description

Nonexempt employees are covered by FLSA with regard to overtime, minimum wage, equal pay, record keeping and child labor provisions. Those same provisions cover exempt employees except tenets regarding overtime, minimum wage, suspensions, partial-day pay withholdings and record keeping. For exempt employees subject to the University paid leave program, absences may result in pay reductions in one-half day increments if paid leave is exhausted. Employees classified as nonexempt are paid overtime as described under the University's policy on overtime. Exempt or nonexempt status determinations, for all Administrative, Service & Support staff, must be approved through Human Resources prior to implementation.

Responsibility

Campus/division Human Resource Services is responsible for the adherence to FLSA provisions and stated University policy governing the administration of pay. The UM  Payroll Office is responsible for providing reports that are needed to conduct audits of pay practices and to notify campus Human Resource Services if inappropriate pay actions are discovered.

Dual Appointments

An exempt employee, with supervisory approval, may also work in nonexempt secondary appointments. However, a campus may limit the extent of such combined appointments to ensure adherence to the Fair Labor Standards Act. An employee cannot work in secondary appointments(s) to the extent that it compromises his/her exempt status. The FLSA permits only one designation to be assigned to an employee and does not permit regular change between exempt/nonexempt status as work emphasis shifts.

Procedures

The University has established 40% of all time worked in a 40-hour workweek, as the maximum number of hours that an exempt employee can work in nonexempt, secondary appointment(s). The following table provides guidelines for hours worked:

Exempt AppointmentMaximum Hours Worked in a Nonexempt AppointmentTotal Hours Worked
FTE Hours/Month Hours/Week Hours/Month Hours/Week Month Week
100% 173.33 40.0 115.55 26.67 288.88 66.67
75% 130.00 30.0 86.67 20.00 216.67 50.00
60% 104.00 24.0 69.33 16.00 173.33 40.00
50% 86.66 20.0 57.77 13.33 144.43 33.33
40% 69.33 16.0 46.22 10.67 115.55 26.67
30% 52.00 12.0 34.67 8.00 86.67 20.00
25% 43.33 10.0 28.88 6.67 72.21 16.67

 

In the event these thresholds are exceeded, an exempt employee will have his/her status changed to nonexempt. This change will be made retroactive to the payroll period during which the status change is determined to have occurred and will remain in effect until all nonexempt, secondary appointments are permanently established within acceptable limits. If a change to nonexempt status occurs, tests for overtime hours and premium pay require the combination of hours worked from all appointments. The premium overtime rate is calculated on the weighted average, hourly pay rate in effect for the workweek in which the overtime hours occurred.

See Also

HR-211 Overtime and HR-116 Employment of Minors.

Date Created: 9/26/97

Last Updated: 7/1/2002