NEWS UPDATE: Deadline On Hold for Overtime Eligibility Rule

Overtime Rule Challenged in Court: The updated federal overtime rule, which was scheduled to take effect on December 1, 2016, has been delayed because a federal judge put a hold on the deadline while the regulation is further reviewed. This court ruling on November 22 only delays the deadline and does not cancel the new regulations. As you may remember, OU has already taken action and is compliant with the new regulations. The federal government’s final decision about the rule’s future and how the university will be affected is impossible to predict at this time.

OU Stays the Course: Because of the disruption that position changes cause employees, managers, and the institution, OU will follow industry recommendations and stay the course with current changes that have been made to become compliant with the new overtime rules. This means that all position and pay changes which have already been initiated related to this regulation remain in place until new guidance is provided by the federal government.  

Questions? Human Resources and Payroll and Employee Services will continue to monitor changes to this overtime rule update and provide any new information to campus as quickly as possible. Contact Human Resources with questions. 

Frequently Asked Questions

  1. Does this court ruling require employees to be changed back to salaried status? No, this ruling only puts a hold on the requirement to comply by December 1 while the regulation is further reviewed.   
  2. Can pay raises related to this regulation change be rescinded? No, pay raises will not be rescinded.
  3. Must new employees with salaries less than the new salary threshold of $47,476 still be hired as hourly employees? Yes, these positions will remain hourly and eligible for overtime pay. All changes made at OU for this federal regulation update will remain in effect until new guidance is received from the federal government. 
  4. Will Norman employees have to pay back the administrative leave and Paid Time Off that was paid out during the transition to the biweekly pay schedule? No, there are no circumstances we foresee that would require employees to pay back this leave. 

New Federal Overtime Rules

On May 18, the U.S. Department of Labor (DOL) issued an update to the Fair Labors Standards Act (FLSA) regulations that will make more workers eligible for overtime pay. By December 1, 2016, workers across the country who make less than $47,476 per year will begin being paid for all the hours they work and earning overtime pay when they work over 40 hours per week. This salary threshold will be updated every three years starting in 2020.

What This Means For You

This federal change makes approximately 2000 OU employees newly eligible for overtime pay. OU employees making less than $47,476 per year will:
  1. Be paid for all hours worked including work-related activities occurring outside the scheduled workday and work done offsite.
  2. Begin tracking their actual worked hours using the method provided by their departments.
  3. Be paid overtime for time worked beyond 40 hours per week. Review information about working after hours here.
  4. Be paid on a biweekly pay schedule. Learn more about this change in pay schedule for Norman employees.
  5. Be transitioned to the hourly version of their current job title effective October 1 in Norman and November 27 at HSC.
Job Duties 
This change in the salary threshold does not require a change in job title or job duties. It is a nationwide shift that allows employees to be paid for all the hours they work. These professional employees can continue to supervise other employees and exercise independent discretion, ingenuity, and judgement in the workplace. Affected employees will keep their job title and be reclassified into the hourly pay group.

Tracking Time
While the nature of the work in some of these positions is difficult to confine to a traditional 8am-5pm workday, it is essential for federal compliance that affected employees begin tracking time for all work-related activities including emailing, texting, being on call, training, and conferences, among other things. Managers and employees are encouraged to put in place practices to help employees be accountable for their time while also maintaining the expected level of service required of these positions.

Jobs That Are Exempt From New Rule

As in the past, a few kinds of jobs like teachers, doctors and lawyers remain exempt from overtime no matter what their salary. With this update, the DOL has clarified guidelines for exempting some additional jobs in higher education based on the kind of work they do even if they don't meet the new salary threshold. These jobs include: 

  • Faculty and teachers, including professors and adjunct instructors, remain exempt from overtime eligibility regardless of their salary because their primary duty is teaching or instructing students.
  • Coaches and assistant coaches may be exempt from overtime pay if their primary duty is teaching or instructing students.
  • Graduate and undergraduate students are not entitled to overtime pay for work done in the course of obtaining a degree.
  • Students who are participants in a “bonafide educational program” and serve as resident advisers in exchange for reduced room and board charges or tuition credit are not eligible for overtime. 
  • Academic administrative personnel who help run the institution and interact with students outside the classroom – academic counselors and advisers, intervention specialists and others with similar responsibilities - do not earn overtime when they make at least as much as an entry level teacher. In Norman this salary threshold is $28,000 and at HSC it is $40,000.
  • Medical and dental residents.

Questions? Contact HR.

Contact Human Resources or call HR Employment and Compensation at (405) 325-1826 in Norman, (405) 271-2180 at HSC, and (918) 660-3196 in Tulsa.

Frequently Asked Questions

1. How will the transition to biweekly pay work on the Norman campus?

We've set up a webpage for employees to learn more about tracking their time and the transition to a biweekly pay schedule.

2. How does time tracking work on the HSC campus?

We've set up a webpage for newly-exempt employees to learn more about tracking their time on the HSC campus..

3. Does this rule affect all salaried employees, full and part-time?

Yes, the minimum salary threshold affects both full and part-time employees. The salary level is an absolute amount that does not take FTE into account.

There are some exemptions to the rule though, including teachers, doctors, lawyers and some higher education specific positions such as academic counselors and student intervention specialists.

4. Do all monthly employees making less than the threshold have to change to hourly?

There are a few provisions for higher education which identify personnel that would be unaffected by the rule, including teachers, doctors and lawyers. Academic administrative personnel who help run the institution and interact with students outside the classroom such as academic counselors, intervention specialists and others with similar responsibilities are subject to a special salary threshold specific to higher education.

Oklahoma Department of Labor (40 O.S. 165.2) requires non-exempt employees be paid at least twice each calendar month on regular paydays.  To remain in compliance with Oklahoma law, we must pay these employees biweekly or semi-monthly.  The university’s practice is to pay nonexempt employees on the biweekly hourly payroll. 

5. Does this change affect academic positions as well?

There are some special provisions specific to higher education which pertain to academic positions.  One is an existing exemption for teachers that has not changed.  Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing.  Another is a special salary threshold that applies to academic administrative personnel who help run the institution and interact with students outside the classroom.

6. Does the transition from monthly to hourly mean a change in titles?

No, affected employees will move into hourly versions of their title. For example a Monthly Managerial Associate I will be reclassified as an Hourly Managerial Associate I.

7. Will employees have the option of accruing compensatory time rather than taking pay at the overtime rate?

Yes, state and local government employers can pay their nonexempt employees at least 1 ½ hours of paid compensatory time off for each hour of overtime worked rather than paying a premium rate for the overtime.  Keep in mind an agreement or policy needs to be in place for an employee to accrue compensatory time.  This can be a one-time agreement provided in departmental regulations, orientation or at time of hire, just as long as the agreement is made known prior to the work being performed and the employee understands all over time will be handled accordingly in the future.

8. Does the salary threshold number include benefits?

No, the salary threshold refers only to the base salary received and does not include benefits.

9. Will employees who transition still be allowed to work a flex schedule?

Flexible scheduling will still be allowed and encouraged by the university, as long as it occurs during the university's standard workweek. 

10. How much time is allowed each day for hourly employees to take breaks?

Section 4.7 of the Staff Handbook states that you may grant your employees a 20-minute break during each four-hour period, but it is not required that you do so. Breaks that are 20 minutes or less must be counted as hours worked and paid as working time. 

11. If an employee is appointed at .75 FTE, when do they begin receiving overtime?

The federal overtime provisions are contained in the Fair Labor Standards Act (FLSA).  Non-exempt employees must receive overtime pay for hours worked over 40 hours in a work week (regardless of FTE).  Hours worked less than 40 hours in a work week are not overtime hours under the FLSA.

12. Will employees be able to cash in PTO in order to offset the burden of transitioning to a biweekly pay schedule?

To help affected OU employees bridge the gap in pay when they transition from the monthly to the biweekly pay schedule, departments may offer employees a one-time payout of up to 80 hours of paid leave. 

13. Do hourly employees have to be paid biweekly?

The university is required by the Fair Labor Standards Act (FLSA) to maintain employee time records on non-exempt employees showing the number of hours worked each workweek. For employees on the Norman campus, the work week begins Saturday at 12:01 am and ends Friday at midnight.  All non-exempt employees who work in excess of 40 hours in a work week are eligible for overtime or compensatory time.  Paying our nonexempt employees biweekly ensures compliance with FLSA regulations as the pay period begins and ends with the university work week.  

14. How do the new overtime rules affect post doc positions?

A Post Doc with a primary duty of teaching is subject to a special provision for Higher Education.  As a Teacher, the new salary threshold does not apply.

Post Docs who engage in research activities and do not teach are considered professional employees by the
federal Fair Labor Standards Act. They are subject to the new $47,476 salary threshold.

Higher education institutions have only two ways to comply with the new rule for non-teaching Post Docs:
  • Raise the current salaries to meet the new required salary level and maintain exemption OR
  • Move the Post Docs to the hourly pay group, track their hours and provide overtime compensation for any hours worked over 40 in a work week.  Overtime compensation may be given in the form of pay or comp time.  

Background

Passed during the Great Depression, America’s overtime law was meant to protect workers from being worked too long and paid too little. The rules guarantee that workers get paid extra when they work extra. The rules also discourage employers from working employees long hours by making it more expensive to do so, through a time-and-a-half pay premium.

Today, certain professionals and managers are exempt from overtime pay if they make more than $23,660 a year and perform specific duties. This salary threshold has not been changed since 2004 and is now below the poverty line for a family of four. Employers must begin using the new salary threshold of $47,476 by December 1, 2016. This threshold will be updated every three years starting in 2020.