The Department of Labor recently released updated white collar overtime regulations that will take effect by December 1, 2016. These regulations may have significant ramifications for school districts.
A little background
Under the Fair Labor Standards Act (FLSA), employees are generally entitled to minimum wage and overtime payment unless they satisfy a white collar worker exemption. Salaried employees that perform certain duties, such as executive, administrative, and professional employees, are referred to as white collar employees
The updated regulations
Under the updated regulations, a white collar employee must earn a salary of at least $913 per week ($47,476 per year) and satisfy the duties test in order to be exempt from the overtime pay rules. This means that any white collar employee making less than $47,476 will generally be entitled to be paid overtime, regardless of job duties. The salary level threshold will be increased every three years to remain consistent with the 40th percentile of full-time salaried workers in the lowest-wage Census region.
A special exemption for teachers
The regulations have a special exemption for those who are bona fide teachers or who have a primary duty of teaching. Teachers are considered to be an exempt professional even though they may not meet the required salary level threshold. In addition, the regulations provide another exemption for academic administrative employees. Depending upon the facts and circumstances, an academic administrative employee may include a vice-principal of a school or even an academic counselor. Academic administrative employees must be paid a salary that’s equal to or greater than the salary for entry-level teachers in the same educational institution in order to be considered exempt employees. However, there are likely many employees with duties not unique to an educational setting that may now become eligible for overtime due to the salary level increase, such as managers in food service or transportation areas.
Teachers are considered to be an exempt professional even though they may not meet the required salary level threshold.
Implementation time is short
We urge you to evaluate your staff compensation levels to determine which employees may now be subject to the new overtime regulations. The time to implement these rules and/or any changes in your compensation practices is quite short, so prompt review of your employee information is essential.
- Read our article, Is your organization prepared to comply with the new rules? >>
- Watch our on-demand webinar >>
- Read the frequently-asked questions and answers from the webinar >>
- Review the current rules on employee classification >>