Purdue and FLSA
Purdue is subject to and manages its compensation program in compliance with the Fair Labor Standards Act (FLSA). The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. For a full overview of the federal law, refer to the DOL Wage and Hour Division's FLSA assistance page.
OVERTIME PAY ELIGIBILITY
The piece of the Act that employees and managers are usually most interested in is overtime pay eligibility. Employees working in excess of 40 hours per week are required to be paid overtime premium pay, unless they qualify as exempt from the FLSA requirement. To be considered exempt, employees must satisfy a “minimum salary” and “duties” test based upon job responsibilities. Generally, positions in the Administrative and Operational Support, and Police, Fire and Skilled Trades career streams are non-exempt. Positions in the Professional, Management and Executive career streams are exempt.
THE EXEMPTION TEST
Under federal law, any employee who earns less than a minimum salary rate established by the Department of Labor is automatically non-exempt under the FLSA regardless of job duties. The minimum salary rate is $684/week or $35,568 per year. The federal salary threshold may not be pro-rated for part-time employment. Whether employed on a full-time or part-time basis, employees must satisfy the full weekly salary threshold to qualify for an exemption that is subject to the salary-level test. If an employee has multiple salaried appointments that are individually exempt based on job responsibilities, the salaries are combined to determine whether or not the salary threshold is met.
Employees are also subject to the wage-and-hour laws of the state or locality where they perform their work. Alaska, California, Colorado, Maine, New York, and Washington, have established salary thresholds that are higher than the federal threshold. Consequently, an employee may satisfy the federal exemption requirements but still be classified as non-exempt under the law applicable to the employee’s work location. Typically, state thresholds change annually. Managers completing a Change of Duty Station form for an employee moving to one of these states must contact Compensation at compensation@purdue.edu for assistance.
In addition to a minimum salary threshold, to qualify for exemption employees generally must meet certain tests regarding their job duties. Job titles do not determine exempt status. In order for an exemption to apply, an employee’s specific job duties and salary must meet all the requirements of the FLSA regulations. There are five primary exemption tests utilized to determine if a position is exempt from the overtime payment requirements:
- Executive Test
- Administrative Test
- Professional Test
- Outside Sales Test
- Computer Test
If a position does not meet any of these exemptions, it is then considered to be non-exempt under FLSA and subject to the pay practices outlined in the act.
Note, if an employee’s duties and pay change, or if the regulations are updated, that person’s FLSA status may change from exempt to non-exempt. Additionally, FLSA regulations explicitly exclude certain employee groups from the overtime pay rules regardless of duties and salary. These employee groups include, but are not limited to, teachers, physicians, and attorneys. These employee groups are not eligible for overtime pay.