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Fair Labor Standards Act (FLSA)

Q. What is FLSA?

A. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. FLSA falls under the Wage and Hour Division of the Department of Labor. For most employees it means they are required to be paid at least a minimum wage and overtime for any hours over 40 worked in a week.

Q. Does the FLSA allow for exceptions?

A. Yes. Some employees are exempt from the provisions, which the FLSA provides very specific guidelines. Thus the classifications “exempt” and “non-exempt:” exempt employees (i.e. salaried) are exempt from FLSA requirements, whereas, non-exempt (i.e. hourly) are not exempt from FLSA requirements.

The FLSA’s overtime rule sets forth three tests, all of which must be met in order for an employee to be deemed exempt: (1) the salary basis test – the employee must be paid on a salary basis, (2) the salary level test – the employee’s salary must be at least $455 per week (equaling $23,660 per year); and (3) a duties test – the employee must perform certain duties specific to the executive, administrative or professional exemption in question (which is detailed in the guidelines).

Q. Why does FLSA sound familiar to me?

A. In 2016, the Department of Labor revised the overtime rule to double the salary requirement from $455 per week to $913 per week. That meant that many exempt employees, regardless of their job duties, no longer met the exemption unless they earned at least $47,476/yr. USM made a tremendous effort to review our salaries, communicate the change, and update employee classifications accordingly. At the last minute, though, a federal judge issued an injunction halting the new rule from going into effect. USM did not move forward with the changes based on the injunction, and the whole country has since been in limbo waiting to see what would happen with the rule as this occurred during the transition of Obama and Trump Administrations. News reports have just started circulating that a new revision may be issued soon, only this time not as extreme as the 2016 revision.

Q. As a manager, can I classify an employee as exempt to avoid paying overtime?

A. No. The entire purpose of the FLSA is to protect employees from such action. An employee can only be classified as exempt if they meet the provisions set forth by the FLSA.

Q. As an employee, I would rather be salaried- can I waive my rights to overtime?

A. No. The FLSA does not permit anyone to waive his or her rights.

Q Who determines FLSA classification?

A. University Human Resources determines classification based on the FLSA provisions.

Q. What happens if someone is erroneously classified?

A. University HR conducts audits of classifications to ensure we are properly paying employees in compliance with the FLSA. Occasionally, we do identify positions that are erroneously classified as exempt. When this happens, we are legally obligated to correct the error. We work closely with the employee to communicate the change and manage through it. Note we are not required by FLSA to classify any position as exempt, only non-exempt.

Q. How does FLSA apply when the employee works more than one job?

A. While employees are permitted to work more than one job at USM, FLSA considerations may impact those decisions. For instance, all hours worked in both jobs at USM count towards overtime. What that means is that if someone has a full-time job working 40 hours a week and takes a second job at the University, any hours over the 40 combined between both jobs are to be paid at time and ½. Departments need to understand that if they hire someone already employed that they are accepting responsibility for an overtime rate. Also, employees cannot have two classifications at one time- one job exempt and the other non-exempt. Departments should consult with HR in these situations.

Q. Can I avoid FLSA if I hire someone as a contractor or intern?

A. Not necessarily. While certain categories of employees, such as these, may be exempt from FLSA requirements, the FLSA provides clear guidelines for when these categorizations apply. In other words, just because you call someone a contractor or intern doesn’t mean it’s so and minimum wage and overtime requirements may still apply. Departments should consult with HR in these situations.

Affordable Care Act (ACA) - Form 1095C Information

Q. What is form 1095C?

A. Form 1095C is a receipt from private insurers or employers confirming you had or were offered health insurance coverage. The form will explain what month you or any dependents, if applicable, were offered and/or enrolled in health insurance coverage offered by the university.

Q. Who will receive form 1095C?

A. All benefits eligible employees that worked any month of the calendar year.

Q. Is form 1095C required for me to file my 2017 tax return?

A. No, you will not need the form to file your 2017 tax return. Check the form for accuracy when you receive it, and keep the form for your records with your tax information.

Q. Where will I receive form 1095C?

A. All active employees will receive the form 1095C via campus mail to their home department. Former employees will receive it at their home address. Online consent is not available at this time.

*Please note that the office of Human Resources is unable to answer any questions regarding tax liability as it relates to the Affordable Care Act.