Update on Overtime Regulations: Changes Take Effect Dec. 1

Over the past several months, campus and institute leaders and human resources departments have been working to implement the U.S. Department of Labor’s changes to the Fair Labor Standards Act, which take effect Dec. 1.

The changes, announced in May, apply to all private and public employers in the nation. UT staff members who are paid less than $47,476 become non-exempt employees on Dec. 1. The rule change is intended to provide employees with important wage and hour protections.

UT Human Resources staff members have been working with departments and units to evaluate positions and apply the exemptions for academic administration and teaching set forth in the Department of Labor regulations and guidance for the higher education sector.

Supervisors should be communicating with employees who will be affected by the change about how the new rules will impact them and their job responsibilities. All non-exempt employees must receive overtime pay or paid time off (compensatory time) for hours worked in excess of 40 hours a week.

Flexible scheduling and other changes may be required to manage overtime and comp time.

Benefits such as sick leave, retirement, insurance, educational assistance and longevity pay will not change for affected employees.

Annual leave calculations will change for employees who move from exempt to non-exempt:

• Monthly accrual rates for annual leave will change on Dec. 1 based on the employee’s years of service, using the same rates in place for current non-exempt employees.
• The maximum amount of annual leave carried over from one calendar year to the next also will change based on years of service. For details, see the employee section of the FLSA frequently asked questions at tennessee.edu/flsa/faq.
• The annual leave carry-over maximum will not take effect until Dec. 31, 2017, to give affected employees time to use any excess annual leave hours before the time is converted to sick leave.
• Employees who are converted to non-exempt status Dec. 1 will be given one personal day that must be used by Dec. 31, 2016.

As is the case for all non-exempt employees, affected staff also will earn a personal day in the new calendar year to be used by Dec. 31, 2017.

Training will be conducted for affected employees and supervisors. Training sessions will be announced soon, and an online training course will be made available.

A review process has been established for supervisors to request employees retain their exempt status. All requests must be received by Oct. 15 and will be evaluated by division heads, HR, chief business officers, and the Office of the General Counsel. Please contact HR for information about the process at 865-946-8847.

As a reminder, more information about the changes and answers to frequently asked questions are available at tennessee.edu/flsa/faq/.