The University of Arizona FLSA & Employee Recordkeeping FAQ's
FLSA/ Exempt & Nonexempt Designations
- What is the Fair Labor Standards Act (FLSA)?
- What does the term "nonexempt" mean?
- What does the term "exempt" mean?
- What are the criteria that enable employees to be exempt from the FLSA overtime provisions?
- What is the salary level test?
- Does the salary level test apply to all UA employees?
- Who is responsible for ensuring that employees making less than $455 a week are designated as nonexempt?
- What does being paid a salary mean in terms of the FLSA?
- What duties tests are applicable to UA employees?
- How is the duties test applied?
Compensable Time (Work Time)
- What is work time?
- Who is responsible for knowing when work is performed?
- Is lunch time or dinner time "work time" or "rest time"?
- Is a nonexempt employee paid for time to travel between home and the work site?
- Is a nonexempt employee paid for time to travel between one work location and another work location?
Overtime
- What is the definition of overtime?
- Must overtime be approved in advance?
- If I am a nonexempt employee, how do I know if my overtime/compensatory time off is earned at straight time or at time-and-one-half?
- May a nonexempt employee volunteer to work unpaid hours in his/her regular job in addition to his/her regular schedule?
- May an employee volunteer hours outside his/her department at the University of Arizona?
- May a nonexempt employee waive his/her rights to overtime compensation?
- Can the supervisor make a nonexempt employee leave early on Friday so the employee's total hours will not exceed 40 in the workweek?
- Can exempt employees maintain separate overtime records and receive overtime?
Recordkeeping
- What are the employee time recordkeeping requirements?
- What are the two officially authorized University time record forms?
- May a department use a form other than the ETR or BETR for recording work time?
- How long must employee time records be maintained?
- Who must complete a time record?
- When does the UA workweek begin and when does the UA workweek end?
- How does a payroll representative report compensatory time and overtime at straight time and at time and one-half using the on-line time roster system?
- How should employee time records be maintained for an employee who is on a sabbatical?
- How should employee time records be maintained for employees who earn supplemental compensation?
- Who is responsible for knowing when work is performed?
- What is the maximum number of comp time hours that can be earned before the time must be paid in cash?
- Are employees paid for the Winter Closure between Christmas Day and the day after New Year's Day? If they are paid, how is the Time Record completed?
Leave Time
- Must an employee use sick leave or annual leave for time away from work to go to a doctor's appointment?
- What is the minimum time increment that may be recorded as work time, or charged to sick leave, vacation leave or unpaid leave?
University Closure Compensation
- One of my exempt employees has contributed extra effort with the express intent of receiving paid release time during the annual university closure. Now that the employee is becoming nonexempt, how do I ensure their extra effort will still be recognized? Allocating Value of Extra Effort for use during the Annual University Closure
- One of my nonexempt employees has earned compensatory time off, with the intent of using this time towards the otherwise unpaid period of annual university closure. Now that the employee is becoming exempt, can s/he retain the compensatory time balance and use it during the annual university closure?
FLSA/ Exempt & Nonexempt Designations
1. What is the Fair Labor Standards Act (FLSA)?
The Fair Labor Standards Act is a federal law that was established by the US Congress in 1938 and has been amended several times since then, most recently August 23, 2004. It is enforced by the US department of Labor. The FLSA defines the federal minimum wage, employee time recordkeeping requirements, and jobs required to receive overtime compensation after 40 hours have been worked in a workweek.
The University administers compensation in compliance with the FLSA, Arizona state law and Arizona Board of Regents (ABOR) Policy.
2. What does the term "nonexempt" mean?
"Nonexempt" employees are covered by the overtime provisions of the FLSA and must record each hour worked on the time record. If the employee works more than 40 hours in one workweek, the employee is paid a premium of time and one-half, whether in pay or in accrual of compensatory time.
3. What does the term "exempt" mean?
"Exempt" employees are not covered by the overtime provisions of the FLSA and are paid an agreed amount for the whole job, regardless of the amount of time or effort required to complete the work. Exempt employees do not record hours of work on the time record.
4. What are the criteria that enable employees to be exempt from the FLSA overtime provisions?
To be exempt, an employee must meet ALL of the standards in the following "tests":
- be paid over a minimum salary - the "salary level test" - AND
- be paid on a salary basis as opposed to an hourly basis - the "salary basis test" - AND
- perform certain duties as outlined in one of the "duties tests".
5. What is the salary level test?
The FLSA salary level test revised effective August 23, 2004 requires that an employee's salary must be at least $455 a week in order to be considered exempt from the overtime provisions. An employee with a salary less than $455 a week must be nonexempt. Part time employees may be nonexempt even though their annualized salary is well over $455 a week. For example, an employee with an annualized salary of $40,000 and an FTE of .5 would be paid $385 a week and be nonexempt.
Here are the formulas to use when determining whether an employee's employment arrangement meets the salary level test.
When using an hourly rate: Employee's hourly rate x FTE x 40 hours
Example: $11.00/hour x 1.0 x 40 = $440.00/week - this employee must be nonexempt
When using an annual rate: (Employee's annual rate x FTE) ÷ 52 weeks
Example: ($40,000 x .50) ÷ 52 = $384.61/week - this employee must be nonexempt
6. Does the salary level test apply to all UA employees?
The salary level test applies to all employees except teachers and those practicing law or medicine. The FLSA does not apply to graduate assistants/associates so they are excluded as well.
7. Who is responsible for ensuring that employees making less than $455 a week are designated as nonexempt?
Employing departments are responsible for considering the exemption status of the job title in the payroll system and determining the employee's exemption status based on the employment arrangement. (See above: What is the salary level test?) If the automated audit in the online payroll time roster system identifies an employee whose salary does not pass the salary level test, a message will appear on the department's time roster reports in ISW, the Information Services Web hosted by the Financial Services Office.
8. What does being paid a salary mean in terms of the FLSA?
Under normal circumstances, employees paid a salary are paid a predetermined amount each week regardless of quantity or quality of work or hours worked. UA exempt employees are paid a salary as the term is used by the FLSA. Note: UA budget references to "salary" and "wage" budgets are unrelated to FLSA salary references.
9. What duties tests are applicable to UA employees?
To be exempt, an employee must qualify under one or more of the following tests:
- Executive exemption test
- Administrative exemption test
- Professional exemption test
- Computer exemption test
- Highly compensated employee exemption test
Each duties test has specific requirements that must be met for an employee to be exempt. For example, the Executive Exemption requires that an employee a) supervise two or more full time employees (or their FTE equivalent), b) have authority to hire and fire, or meaningfully recommend hiring and firing, and c) manage a recognized department or subdivision. More information on the exemption tests are available on the Department of Labor website at http://www.dol.gov/esa/regs/compliance/whd/fairpay/fs17a_overview.htm.
10. How is the duties test applied?
Classified Staff generic job descriptions are maintained by Human Resources, which is also responsible for assigning the FLSA exemption status for these job titles. Some Classified Staff job titles are exempt and some are nonexempt.
Appointed personnel jobs must meet at least one of the FLSA duties tests to be exempt; jobs that do not meet at least one of these tests, and are therefore clearly nonexempt, are more appropriately assigned to a Classified Staff job title. However, departments should contact their HR Organizational Consultant if there are further questions.
Compensable Time (Work Time)
11. What is work time?
Work time is time that a nonexempt employee has been permitted to work, and time for which the employee must be compensated, either in pay or in accrual of compensatory time off (comp time).
Examples of work time include a) time worked before the scheduled start time; b) rest breaks less than 20 minutes; c) eating lunch at the desk, while answering the phone, serving clients, or performing any work; and c) time worked after the scheduled ending time.
Examples of non-work time include a) eating lunch at desk, but not answering phone nor working, and b) rest breaks or meal periods of 20 minutes or longer.
12. Who is responsible for knowing when work is performed?
The employee's supervisor is always responsible for knowing when work is performed. This is one reason the supervisor must pre-approve overtime and must also approve and sign the time record.
13. Is lunch time or dinner time "work time" or "rest time"?
Bona fide meal time is not work time. The meal period generally must be at least 30 minutes. The employee must be completely relieved of all duties, and the employee must be free to leave the duty post.
14. Is a nonexempt employee paid for time to travel between home and the work site?
Normally, no. There may be exceptions for travel to sites that are beyond the normal commuting area of the employee. For specific details, please refer to the "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php
15. Is a nonexempt employee paid for time to travel between one work location and another work location?
Travel from one work site to another during the workday is work time. Special rules exist for out of town overnight travel. For specific details, please refer to "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php
Overtime
16. What is the definition of overtime?
Overtime is time worked by a nonexempt employee that exceeds the employee's normally scheduled workweek. For full-time employees, overtime is time worked over 40 hours in a workweek. For part-time employees, overtime is time worked over the established full time equivalency (FTE). For a more complete explanation, see "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php
17. Must overtime be approved in advance?
In support of the supervisor's continued awareness of unit work volume, individual productivity, and available funds to pay overtime compensation, the supervisor must provide prior approval, preferably written, for a nonexempt employee to work overtime. For specific details, please refer to "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php
18. If I am a nonexempt employee, how do I know if my overtime/compensatory time off is earned at straight time or at time-and-one-half?
Overtime/compensatory time is earned at straight time when the hours actually worked in that same workweek are LESS than 40.
Overtime/compensatory time is earned at time-and-one-half when the hours actually worked in that same workweek are MORE than 40.
19. May a nonexempt employee volunteer to work unpaid hours in his/her regular job in addition to his/her regular schedule?
No. All nonexempt employees are compensated for all hours actually worked in his/her regular job, in his/her regular department.
20. May an employee volunteer hours outside his/her department at the University of Arizona?
Under certain circumstances, exempt and nonexempt employees may volunteer time. Specifically, nonexempt employees may volunteer for work outside their regular duties and regular hours, and exempt employees may volunteer for work outside their regular duties. Volunteer services must be both (a) offered freely and without pressure or coercion, direct or implied, from the employer, and (b) performed for civic, charitable or humanitarian reasons. If you have any questions about the appropriateness of volunteering time, contact Human Resources.
21. May a nonexempt employee waive his/her rights to overtime compensation?
No. All nonexempt employees are compensated for all hours actually worked at the appropriate rate of pay.
22. Can the supervisor make a nonexempt employee leave early on Friday so the employee's total hours will not exceed 40 in the workweek?
Yes. This is one method to effectively manage work time and the personnel services budget.
23. Can exempt employees maintain separate overtime records and receive overtime?
No. Exempt employees are ineligible to receive overtime payment or compensatory time off. There are instances, however, when a supervisor might permit flexible work hours to accommodate, for example, an exempt employee who worked an excessive number of hours in a prior work week or who routinely works more than 40 hours in a work week. For specific details, please refer to "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php
Recordkeeping
24. What are the employee time recordkeeping requirements
The FLSA requires that all employees complete, and employers approve and maintain, employee work time records. Specific data requirements established in the FLSA are incorporated in the two officially authorized University time record forms.
25. What are the two officially authorized University time record forms?
There are two officially authorized forms for recording work time. The Employee Time Record (ETR) records a year's work time on one sheet of paper, six months on each side. The Bi-weekly Employee Time Record (BETR) records one pay cycle's work time on one sheet of paper. These time records are the auditable record for work time and are used as source documents by payroll representatives for completing the online Payroll Time Roster, which generates paychecks. Both forms record:
- hours worked daily for nonexempt employees,
- leave taken daily for all employees,
- compensatory time earned biweekly for nonexempt employees, and
- the employee and supervisor agreement of time worked or leave taken.
26. May a department use a form other than the ETR or BETR for recording work time?
If neither the ETR nor the BETR meets the operating needs of a work unit, the unit may design and authorize the use of a time record to meet its particular business purposes. Human Resources has outlined the information required by the FLSA and University policy on an alternative time records. http://www.hr.arizona.edu/09_rel/policies/atrguidelines.php Departments are encouraged to follow these guidelines.
27. How long must employee time records be maintained?
According to University records retention rules, employee time records must be retained for seven years plus the current fiscal year, for a total of eight years. http://uabis.arizona.edu/eforms/more/etr_interim.html
28. Who must complete a time record?
The FLSA requires that all employees complete, and employers approve and maintain, employee work time records.
Nonexempt employees must record all time worked and all paid and unpaid leave used.
Department may choose to use "exception time reporting" or "presence at work" reporting for exempt employees. http://www.hr.arizona.edu/04_cb/comp/caboboc080100.html. Regardless of the format, exempt employees must record all paid and unpaid leave time used.
However, some FLSA exempt employees may be required to complete detailed records of hours actually worked, based on the business needs of the work unit (positions funded by sponsored programs, internal billing requirements, etc.).
29. When does the UA workweek begin and when does the UA workweek end?
The University work period (workweek) is normally seven consecutive days commencing at 12:01 a.m. on Monday and ending 168 hours later at 12:00 midnight Sunday. The typical schedule for full-time employees consists of five consecutive eight-hour shifts within the work period. http://www.hr.arizona.edu/09_rel/policies/pp309.php
30. How does a payroll representative report compensatory time and overtime at straight time and at time and one-half using the on-line time roster system?
Always report the actual number of hours worked. The proper selection of the overtime codes will automatically calculate the resulting compensatory hours or cash payment. http://w3.arizona.edu/fso/deptman/19/1923ot.html
31. How should employee time records be maintained for an employee who is on a sabbatical?
Fiscal or Academic year Appointed Personnel may go on an approved sabbatical at either full pay or partial pay, depending on the arrangement. The beginning date and end date of the sabbatical should be posted on the official employee time record for the appropriate period. The employee and supervisor may sign the time record once for the entire sabbatical period. A copy of the official approval of the sabbatical should be retained with the time record as backup documentation.
32. How should employee time records be maintained for employees who earn supplemental compensation?
FLSA exempt employees (either Classified Staff or Appointed Personnel) who earn supplemental compensation do not track supplemental compensation hours worked, except as necessary for generating appropriate pay in the online time roster system. Supplemental compensation activities for exempt employees are not recorded on the official employee time record, which is the record to be used for the employee's standard paid position. Once the supplemental compensation activity is approved, the department may use any form it chooses to have an employee document completed supplemental compensation activity for purposes of notifying the payroll representative to add hours to the online time roster.
FLSA nonexempt employees who hold a full-time (1.0 FTE) position are ineligible to earn supplemental compensation, as any additional hours worked must be recorded on the official time record and paid as overtime. Part-time (less than 1.0 FTE) nonexempt employees may only earn supplemental compensation in an amount that will not cause their total weekly hours worked to exceed 40 hours. For specific details, please refer to Classified Staff Human Resources http://www.hr.arizona.edu/09_rel/policies/pp316.php, "Supplemental Compensation".
33. Who is responsible for knowing when work is performed?
The employee's supervisor is always responsible for knowing when work is performed. This is one reason the supervisor must pre-approve overtime and must also approve and sign the time record.
34. What is the maximum number of comp time hours that can be earned before the time must be paid in cash?
After a nonexempt employee has accrued 120 hours of compensatory time, all subsequent overtime hours worked are compensated in cash. Exceptions to this rule may be approved by the dean/vice president in advance, with notice to the employee, but in no case shall the accrual of compensatory time exceed 240 hours. The payroll system provides a warning notice when a compensatory balance exceeds 90 hours. For specific details, please refer to "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php
35. Are employees paid for the Winter Closure between Christmas Day and the day after New Year's Day? If they are paid, how is the Time Record completed?
Refer to the Holiday Closure policy
http://info-center.ccit.arizona.edu/~policy/closure.shtml.
Leave Time
36. Must an employee use sick leave or annual leave for time away from work to go to a doctor's appointment?
The state sponsored paid leave benefits are intended to allow employees the flexibility to continue their income for a specified period when there is a need to be away from work. If an employee earns paid time off, the employee uses the paid time off when an applicable occasion occurs. This applies to Exempt and Nonexempt employees, and Classified Staff and Appointed Personnel. However, the employee and supervisor have the flexibility to agree to modify the employee's schedule to accommodate the absence.
Since these benefits have cash values upon the employee's retirement or separation from employment, supervisors and department heads are encouraged to develop and implement fiscally sound policies and practices regarding the use of paid sick and annual leave.
37. What is the minimum time increment that may be recorded as work time, or charged to sick leave, vacation leave or unpaid leave?
The smallest increment of work or leave time recorded is one-quarter hour. Time should be rounded to the nearest one-quarter hour. http://uabis.arizona.edu/eforms/more/etr_interim.html#purpose
University Closure Compensation
38. One of my exempt employees has contributed extra effort with the express intent of receiving paid release time during the annual university closure. Now that the employee is becoming nonexempt, how do I ensure their extra effort will still be recognized?
Allocating Value of Extra Effort for use during the Annual University Closure
Exempt employees may contribute extra effort throughout the year with the express intent of receiving paid release time during the annual University closure. When an exempt employee moves to nonexempt status, this previously contributed extra effort is reviewed by the employee and the supervisor. This extra effort is not considered on an hour-for-hour basis, but on the overall extra contribution during the period of exempt employment. The employee and supervisor should discuss the value of the extra effort and equate it to a number of hours of compensatory time off, which is processed through a Vacation/Sick/ Comp Time accrual form. The amount of compensatory time appears on the employee's paycheck stub for reference. The University closure compensation policy is available at http://w3.arizona.edu/~policy/closure.shtml.
39. One of my nonexempt employees has earned compensatory time off, with the intent of using this time towards the otherwise unpaid period of annual university closure. Now that the employee is becoming exempt, can s/he retain the compensatory time balance and use it during the annual university closure?
In accordance with the University's Fair Labor Standards Act and Overtime Policy, exempt employees are ineligible to earn or retain a compensatory time off balance, and the balance must be paid off in full, effective with the change to exempt status. For specific details, please refer to "FLSA and Overtime Policy" at http://www.hr.arizona.edu/09_rel/policies/pp311.php. Exempt employees are eligible to receive paid release time during the annual university closure. This extra effort should not be considered on an hour-for-hour basis, but on the overall contribution during the period of exempt employment. The University closure compensation policy is available at http://w3.arizona.edu/~policy/closure.shtml.
|
back to top
