Major change proposed in who’s considered hourly

May 5, 2016

The U.S. Department of Labor (DOL) has proposed increasing the salary threshold for coverage under the Fair Labor Standards Act (FLSA). FLSA, the federal labor law that governs minimum wage, overtime, and child labor protections, requires overtime compensation for employees who are covered by the law, for all hours worked over 40 hours per week.

The DOL changes would raise the minimum salary threshold for coverage to $50,440 per year from its current level of $23,660. If an employee’s gross pay is below the new minimum, they will most likely be designated as covered by the law (i.e., paid on an hourly basis) and have to report hours worked. Employees who earn less than the new annual threshold would be compensated for any hours recorded in excess of 40 hours per work week, in accordance with the FLSA.

Teachers, lawyers and doctors are excluded from the DOL’s proposed change to the FLSA. This includes faculty and instructional academic staff whose primary duties are teaching.

“If the new regulations are implemented as proposed, thousands of UW–Madison positions would move from being paid on a salaried basis to being paid hourly,” says Bob Lavigna, assistant vice chancellor and director of human resources. “The changes will have a major effect on our campus.”

The new FLSA rules could go into effect as early as July 1. We are still determining the specifics of the processes our campus will put into place to comply with the new rules. Our approach will be informed by feedback from department chairs, principal investigators, key faculty and staff. The Office of Human Resources will provide updates as we learn when the new rules will be finalized, and we determine our processes to comply.

For more information on how FLSA changes may affect you, click here or email flsa@ohr.wisc.edu.