All university employees are covered by the Fair Labor Standards Act (FLSA), although some individuals may be exempt from its provisions.
Exemption refers to whether or not a position is exempt from the provisions of the FLSA. With this in mind, there are two main categories of positions under FLSA:
- Non-exempt – overtime eligible and subject to the provisions of the FLSA
- Exempt – not eligible for overtime and exempt from the provisions of the FLSA
The FLSA requires that employees in non-exempt positions be compensated at time-and-one half rate for all hours worked over 40 in the work week. For more information on how to determine overtime hours and what constitutes hours worked, review University Policy 4320: Guidelines for the Fair Labor Standards Act (section 3.1).
The FLSA requires that for a position to be considered exempt, the position must meet both the salary basis test and the job duties test described below.
To qualify for exemption, full-time Virginia Tech employees generally must be paid at least $684 per week or $35,568 per year on a salary basis. Virginia Tech encourages all hiring managers to pay a minimum of $40,000 per year ($769 per week) to all exempt level employees. The university’s “wage/adjunct” faculty paid by P14 are considered “salaried” for the purposes of FLSA compliance if they are paid a predetermined amount each pay period. The salary requirements do not apply to certain outside sales employees, coaches, teachers, extension agents, and employees practicing law or medicine. Additional record-keeping will be required for any non-teaching faculty member paid on a P14 at a rate less than $684 a week, although paying below the rate is strongly discouraged due to internal equity. For more information, review University Policy 4320: Guidelines for the Fair Labor Standards Act (section 3.2.9).
Any non-teaching wage/adjunct faculty paid on P14, earning less than $684 per week, is considered non-exempt based on the FLSA salary level test. The hours worked in a week must be recorded to ensure that the employee’s actual hourly rate does not fall below Federal minimum wage. If the employee works more than 40 hours in a week, time and a half must be paid for the hours in excess of 40. These hours should be tracked, but should not be entered into Banner.
In addition to meeting the above referenced salary basis test, to qualify for an exemption a position must also qualify under one of the following four job duties tests:
For more information regarding each of the requirements, visit the Department of Labor’s website.
Non-exempt employees who work above the standard 40-hour work week are to be compensated at a time and one-half rate for all hours worked above 40. The standard Virginia Tech work week is normally Friday at midnight to the following Friday at midnight. Overtime compensation may be in the form of time and one-half pay or time and one-half leave (overtime leave). Which form of compensation is granted is at the discretion of the employer.
Virginia Tech ultimately retains the overtime liability for all non-exempt employees that it payrolls. Upon the separation of applicable non-exempt staff employees, overtime leave balances must be paid out. Said employees may amass up to a maximum of 240 hours of overtime. Amounts beyond this must be paid at the time and one-half rate. For more information, refer to University Policy 4300: Hours of Work and University Policy 4320: Guidelines for the Fair Labor Standards Act.
It is the supervisor’s responsibility to maintain a record of all hours worked by non-exempt employees by using the Leave and Hours Worked Report (form P128). Hardcopy records must be kept in the unit file for a minimum of four years. This is in addition to the online Leave Entry database.
Staff employees should request approval of overtime work within a reasonable amount of time prior to the expected date of overtime work. Supervisors should only authorize overtime in exceptional instances of an emergency or temporary nature. In all instances, the duration, nature, and scope of the overtime work should be clearly articulated and freely agreed upon by both the supervisor and employee.
The current minimum wage as of May 1, 2021 is $9.50 per hour.
Employers of “tipped” employees (i.e. those who customarily and regularly receive more than $30 a month in tips such as servers in restaurants) may include tips as part of their wages, but employers must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also meet certain other conditions as outlined by the FLSA.
Frequently Asked Questions
With the recent changes to the exemption status of a number of our staff employees, there are some key things for employees and supervisors to remember. A list of frequently asked questions is available to help keep everyone informed.