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FLSA

Vacation Accrual Policy Changes:  FAQs

On Friday, September 16, 2016, the UCM Board of Governors approved amendments to Board policy 2.3.010 – Employee Vacation Accrual. This document has been prepared to answer questions UCM staff members have asked about how these changes might impact their specific vacation accruals, needs, and plans.

Why change the current policy?

The changes to the policy will bring equity to vacation accrual rates, as there will no longer be a distinction between the accrual rates of exempt and non-exempt employees. Instead, accrual rates will be based solely on years of service.

In May 2016, the U. S. Department of Labor (DOL) amended the regulations implementing the Fair Labor Standards Act (FLSA). The FLSA changes do not specifically address vacation accrual rates. However, under the current policy, employees moving from exempt to non-exempt would have lost some of their vacation accrual. These policy modifications will create a single accrual rate for all employees, regardless of classification.

Why did we just learn of these changes in September?

UCM is committed to an effective shared governance model and values the input and ideas of all staff members. Sometimes, however, we need to weigh those important discussions with the Board of Governors’ role in institutional governance. Sharing this information earlier, while avoiding some of the misunderstandings and miscommunications, could have undermined the Board’s role in objectively considering and voting on University policy.

Will the policy impact me?

If you are a regular, full-time employee at UCM, and you accrue vacation hours, this policy will impact you.

Will I lose the hours that I have already accrued?

No.  In developing this new policy and process, President Ambrose identified two tenants:  first, no accrued time would be taken from anyone, and second, all UCM staff members will now accrue at one rate.  That rate is set forth in the new policy.

If I don't lose the hours I already have, what happens to them?

Depending on the number of hours you have accrued and how close you are to your current accrual maximum, some of your accrued hours may be moved to a transition bank.  This transition bank will hold those hours until used or paid out.  Employees will have full access and control over their individual transitions banks.  Employees would be required to use their transition bank leave to prevent unpaid leave or when applying for any benefits (i.e. crisis bank) that require you to use "all leave time accrued."  You will soon be able to see your transition bank total in My Central.

How can I use the hours in my "transition bank?"

You use the hours in your “transition bank” the same way you use your vacation hours.  You can use them for vacation, or, if you leave the University with a balance in your transition bank, you will be paid the value of those hours, along with your “normally accrued” vacation hours.   It is important to note that additional possibilities are being discussed and UCM Human Resources will share information as it becomes available.

What if I take a specific leave and don't have that type available?  What will happen?

The practice of UCM's payroll team is to ensure that employees avoid going into a leave without pay situation.  When there is not sufficient leave available under a particular leave category, UCM payroll will use the next appropriate and available leave whenever possible.  As a last resort, an employee with balances in the transition bank will have those hours applied to prevent a leave without pay situation.

Why did the accrual rate change?

By establishing one accrual rate for all UCM staff members, the University creates a more equitable and manageable system to administer.  This, in turn, helps us implement the new FLSA requirements with less disruption to individuals and the University.  Under the new accrual rate, everyone benefits. Either the accrual rate associated with your years of service increases, or, there are fewer years between now and when you move up to the next level of accruals.

Why can I no longer carry over 100% of my accrued vacation hours year-to-year?

Vacation time is intended to provide employees paid time off for wellness and personal pursuits.  The University believes asking staff members to use at least 25% of the hours they are given each year provides both the flexibility to work around busy periods, and still encourages staff members to use between 3 – 6 days (depending on the accrual rate) for personal time.

Why is the policy now requiring hourly reporting instead of reporting in 4-hour blocks?

We recognize that many personal errands or appointments may not take a full morning or afternoon.  Instead of requiring staff to take an entire 4-hour block of vacation for what may only be a 1-hour errand, we want to provide staff the opportunity to account for their time accurately.

How can I receive more information about these policy changes?

Informational sessions will be held during the next two weeks; three on the Warrensburg campus and one at UCM-Lee’s Summit.  Times and locations will vary and be announced through UCM Daily.


FAQs Regarding the FLSA and Recent Amendments

The Fair Labor Standards Act is the federal wage and hour law, and it is administered by the U.S. Department of Labor.  The FLSA and its regulations cover a lot of material, but a key provision is the establishment of minimum wage and overtime requirements applicable to most employers, including institutions of higher education.

Significant amendments to the FLSA were recently finalized, with the Obama administration indicating that an important purpose is to ensure that more workers are eligible for overtime payments.  Because these amendments will necessitate change around campus, the University has prepared the FAQs below for review by interested employees.


What are the FLSA's minimum wage and overtime requirements?

Under the FLSA, a non-exempt employee must be paid at least minimum wage for all hours worked, as well as overtime at one-and-one-half times the regular rate of pay for all hours worked over 40 in a workweek.

The federal minimum wage is $7.25 per hour, but the state of Missouri has a higher minimum wage of $7.65 per hour. The University surpasses Missouri's requirement in this regard by establishing $10.00 per hour as the minimum rate of employee pay.

What does it mean to be non-exempt and exempt?

The default status under the FLSA is non-exempt.  Non-exempt employees are entitled to receive at least minimum wage for every hour worked and overtime payments for hours worked over 40 in a workweek. This is one reason why non-exempt employees are required to track and record their hours worked.

Exempt means that an employee is not subject to the minimum wage and overtime rules. This is why exempt employees are not required to track and record their work hours.

What is required for an employee to be exempt?

To be classified as exempt, an employee must:

  • Be paid on a salary basis;
  • Be paid a minimum salary amount (in most cases); and
  • Meet a duties test to qualify as an executive, administrator, professional, or computer professional.

 

There are two exceptions to the minimum salary level amount particularly applicable to institutions of higher education.  First, teachers (and some coaches) can be paid any salary amount and still be exempt. Second, certain non-teaching academic employees (e.g., academic advisors) can be classified as exempt when they are paid less than the minimum salary amount if their weekly salary level is equivalent to the weekly salary level of entry level instructors at the institution.

 

Also, note that less-than-1.0 FTE employees are still required to meet the minimum salary amount to be classified as exempt. The FLSA does not allow this figure to be prorated for part-time employees.

What is changing with the new FLSA amendments?

The amendments to the FLSA are changing the minimum salary amount that is necessary for an exempt classification. Since 2004, the minimum salary amount has been $455 per week (or $23,660 annually). This is rising to $913 per week (or $47,476 annually). This salary amount will also be subject to an automatic adjustment every 3 years so that it will continue to rise in the future.

When do the amendments take effect?

The amendments were announced on May 18, 2016, and will become effective on December 1, 2016. The University is working to ensure compliance between now and December.

What is the practical effect of the FLSA amendments?

Many employees have historically been classified as exempt because, in part, they receive an annual salary of more than $23,660. However, at UCM, as well as other institutions around the country, some of these employees are below the new $47,476 threshold. This has required the University to analyze these positions to determine whether they should continue to be classified as exempt or if they should be re­ classified as non-exempt.

In some cases when an employee is relatively close to the $47,476 figure and is expected to work more than 40 hours in a workweek on a somewhat regular basis, the University may decide to give the employee a salary raise so that he/she can still be classified as exempt. But, in most situations where an employee has historically be classified as exempt but is paid less than $47,476, the University will be re­ classifying the position to a non-exempt position. Like all non-exempt employees, a formerly exempt employee who has been re-classified as non-exempt will be required to track and record hours worked. However, those who are re-classified from exempt to non-exempt will receive an hourly rate of pay equivalent to their previous salary level and will now be eligible for overtime payments and/or comp time when they work over 40 hours in a workweek.

Am I going to be transitioned to a non-exempt position?

The University's analysis is ongoing, but those directly affected by the FLSA amendments will be individually notified prior to December 1, 2016.

What standards are in place at the University governing overtime?

The University is currently working to standardize its policies, procedures, and practices regarding tracking and recording work hours, overtime guidelines, comp time, and related matters. 

Where can I find more information?

The University plans on making more information available in the upcoming months as employee transitions are made and when new policies take effect. 

Also, general information about the amendments to the FLSA can be found on the Department of Labor (DOL) website.