Department of Labor regulations to impact how employees are classified, paid

May 26, 2016

UNIVERSITY PARK, Pa. — On May 18, the U.S. Department of Labor (DOL) published new regulations regarding the Fair Labor Standards Act (FLSA). These regulations will impact how employers classify and pay their employees.

LEARN MORE: To see the DOL publication, visit https://www.dol.gov/WHD/overtime/final2016/.

Visit http://sites.psu.edu/flsa to read FAQs and learn more about how these changes impact Penn State.

What’s happening?

The DOL has increased the salary threshold used to determine who is an exempt employee under the FLSA. FLSA, the federal labor law that governs minimum wage, overtime and child labor protections, requires overtime compensation for nonexempt employees who are covered by the law for all hours worked over 40 hours per week.

The DOL changes raised the minimum salary threshold for coverage from its former level of $23,660 to $47,476 per year. If an employee’s gross pay is below the new minimum, they will most likely be designated as nonexempt and their employer will have to track and report hours worked. Employees who earn less than the new salary threshold must be compensated for any hours recorded in excess of 40 hours per work week, in accordance with the FLSA. Employers have until Dec. 1, 2016, to implement this new regulation.

Teachers (including faculty and instructional academic staff whose primary duties are teaching), lawyers and doctors are not subject to the DOL’s proposed change to the FLSA.

Penn State has been following and anticipating possible changes since a proposed rule was released in July 2015. Now that the final rule has been issued, detailed analyses and planning will begin.

Where can I get the most up-to-date information?

Penn State has created a website that aims to be a repository for information regarding the changes. The website, http://sites.psu.edu/flsa, contains answers to frequently asked questions and links to more information. The site will be updated regularly, answering faculty and staff questions and providing new information as it becomes available. Penn State also plans to use the website as an online training hub for information regarding the changes. Employees are encouraged to review all materials and to ask questions by contacting their unit HR representative or by emailing compensation@psu.edu.

To learn more about the changes, read employee FAQs at https://sites.psu.edu/flsa/faqs/.

Last Updated October 14, 2016