With the upcoming change in the Fair Labor Standards Act, ACU will evaluate staff positions and how they are paid.
The FLSA establishes minimum wage, overtime pay, record-keeping and youth employment standards affecting employees in the private sector and in federal, state and local governments, according to the U.S. Department of Labor website.
The change in the law will affect how employers pay employees for overtime. To determine whether an employee can receive overtime – working more than 40 hours in the work week – they are screened through a two-part test.
Part one looks at how much they make in a year. Now, if an employee makes $23,600 a year, their position is looked at for the second part of the test. Part two considers any exemptions, called duties, that may disqualify the employee to receive overtime payment. In order for duties to be considered, an employee must be considered an executive, administrative or professional employee.
When the law changes, the minimum salary will be raised to $50,440, more than double what it is now, forcing businesses to reevaluate workers’ salaries and how they are paid.
Kris Sutton, assistant director of human resources, is familiar with the law, as he was an investigator for the Department of Labor for four years before coming to ACU.
“The Department of Labor got lots of feedback regarding the change, and we’re trying to figure out whether it’s good or bad for higher education,” Sutton said.
The change will only affect staff at ACU. Professors will not be affected by the change.
“We’re not changing what they are paid, just how they are paid,” Sutton said. “Some may go from getting a monthly check to getting paid twice a month or the other way around.”
In order to adhere to the law, one of two things can happen; those who work on a salary will receive a raise to meet the $50,440 requirement, or they will switch to being paid hourly plus overtime.
Sutton said the difficult part of this will be keeping everyone’s pay fair.
“The law is changing and we have to be in compliance with that, but we want to be good stewards; have to remain fair,” he said. “We don’t want a professor making more than a chair in a department.”
The change will not result in a huge financial burden, but another hurdle the human resources department must get over is communication, Sutton said.
“There’s the perception that if you’re exempt, you’re considered white collar, a “professional employee,” instead of a blue collar employee,” he said. “There are the repercussions of morale.”
There is not an official date for when the law will change, and there are still some things that are up in the air.
“We’re just trying to prepare,” Sutton said. “We’re certain there will be a change, but we don’t know how, and there are changes that can always be made, especially with it being an election year. We want to do what’s advantageous to the university as a whole.”