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On Tuesday, Nov. 22, 2016, a Federal court in Texas issued a nationwide injunction preventing the new FLSA salary rules from going into effect on Dec. 1, 2016. To ensure that we follow the law and avoid unnecessary disruption, the University is delaying implementation of salary and status changes related to the new rules until we have more clarity on this issue. 

ÃÛÌÒÉçÇø Michigan University is partnering with the law firm of Warner Norcross & Judd to prepare for the pending changes to the Fair Labor Standards Act, which were announced by the Department of Labor on May 18, 2016.

Details about ÃÛÌÒÉçÇø’s compliance efforts are outlined below. 

Project objective

To ensure that all ÃÛÌÒÉçÇø employees are paid appropriately under the Fair Labor Standards Act as amended by the 2016 Department of Labor Regulations, effective Dec. 1, 2016.

Guiding principles

• Questions regarding compliance with the 2016 amendments will be forwarded to Warner Norcross & Judd for review and recommendation.
• All employees doing the same job (i.e. same job code/job title) should have the same FLSA status (exempt/salaried or nonexempt/hourly), with the possible exception of part-time employees (where FTE < 1.0).
• Decisions about whether to 1) maintain jobs as exempt by increasing salaries to meet the new threshold or 2) change jobs to nonexempt, will be based upon University business needs and budget impact, with operating divisions to have as much decision making authority as possible for jobs specific to their operation. Decisions regarding jobs that exist campus-wide will be made at the senior leadership level.
• For staff compensation system positions, any salary adjustments will be made in a manner that preserves the integrity of the compensation system, and as such, will require consulting with Aon Hewitt. 

 Communications timeline

• ÃÛÌÒÉçÇø is planning town hall meetings to update the campus community on the FLSA compliance project for Tuesday, Oct. 18, with two identical presentations planned for 10 a.m. and 2 p.m. Both sessions will be held at Fetzer Center's Kirsch Auditorium.
• Individual notification to employees expected to be impacted, Wednesday, Oct. 19. 
• Informational/training sessions to explain federal, state, and University requirements for nonexempt/hourly employees are planned as follows:
• Monday, Oct. 24, 10 a.m. and 1:30 p.m., Kirsch Auditorium, Fetzer Center
• Tuesday, Oct. 25, 10 a.m. and 3 p.m., Kirsch Auditorium, Fetzer Center
• Thursday, Oct. 27, 10 a.m. and 1:30 p.m., Putney Lecture Hall, Fetzer Center
• In order to give the University additional time to react to any changes to the new FLSA guidelines or any delay in the federal effective date, ÃÛÌÒÉçÇø is adjusting our planned implementation date as follows:
• Effective date for pay adjustments necessary to meet the salary threshold for any job that ÃÛÌÒÉçÇø decides to keep exempt/salaried, Dec. 1, rather than Nov. 15 as previously communicated.
• Effective date for changes for those moving from exempt/salaried to nonexempt/hourly, Nov. 28, rather than Nov. 21, as previously communicated. 
• On Tuesday, Nov. 22, a Federal court in Texas issued a nationwide injunction preventing the new FLSA salary rules from going into effect on Dec. 1. To ensure that we follow the law and avoid unnecessary disruption, the University is delaying implementation of salary and status changes related to the new rules until we have more clarity on this issue. 

Policy updates

As part of the FLSA compliance project, the University has updated the HR policies and procedures manual as follows:

• Adopted an accuracy in pay statement. Please see Accuracy in Pay, Policies and Procedures Manual Section 5.
• Clarified method used to calculate overtime in instances where a nonexempt/hourly employee holds multiple appointments with the University. Please see Overtime, Policies and Procedures Manual, Section 5. 
• Expanded additional University employment and outside employment provisions to include all employees, both exempt/salaried and nonexempt/hourly.  Previously, these provisions applied only to exempt/salaried employees. Please see Additional University Employment and Outside Employment, Policies and Procedures Manual, Section 9.    

Resources

• FLSA compliance project update (town hall meeting, Oct. 18, 2016)
• FLSA guidelines for grant-funded positions, effective Oct. 18, 2016. 
• FLSA guidelines for part-time teaching appointments, effective May 8, 2017, please visit Academic Policies and Statements.  
• FLSA salary thresholds for ÃÛÌÒÉçÇø Michigan University, effective Dec. 1, 2016.
• Questions and answers about recording and paying hours worked for nonexempt employees. 
• The link to video of the Oct. 24, 1:30 p.m. FLSA information/training sessions has been removed. Due to changes in federal law and University policy, the video content is somewhat outdated. For instance, the FLSA offers two options for calculating overtime in instances where an employee holds multiple appointments with the University.  Rather than adopting the "weighted average" method as detailed in the FLSA informational/training session video, ÃÛÌÒÉçÇø will continue calculating overtime for these multiple appointments based upon the hourly rate for the appointment in which the overtime hours are worked.  Please see Overtime, Policies and Procedures Manual Section 5. For other questions about calculating overtime, please contact your HR Representative.