Payroll Personnel System

2016 Changes to the Fair Labor Standards Act Overtime Rule

The revised rule, effective December 1, 2016, increases the minimum salary threshold for exempt employees from $455/week (approximately $23,660/year) to $913/week (approximately $47,476/year). For campus employees paid monthly, the threshold to remain exempt is $3,956.34/month.

To comply with the DOL’s new overtime rule, the University of California will take the following approach: 

  1. Junior Specialists and Staff Research Associate 2 will be reclassified as non-exempt
  2. The minimum salary for the assistant rank in the specialist series and coordinators of public programs will be raised to maintain their overtime-exempt status
  3. All staff and academic personnel, including rehired retirees and part-time employees, who do not qualify for the professional teaching exemption and who earn less than $913 per week, will be reclassified as non-exempt and paid on an hourly basis.  This is because an employee must earn at least $913 in each week in which they perform any work regardless of the number of days or hours worked to qualify for the exemption under the FLSA.

Due to certain exemptions under FLSA, it will remain the case that some University employees will remain overtime-exempt even if they earn a salary that is below the new salary level.  For example, University employees whose primary duty is teaching will be unaffected by this rule no matter how much they earn, because the minimum salary threshold requirement does not apply to bona fide teachers.  This exemption from the salary basis test also applies to many University coaches, who have the primary duty of teaching or instructing student athletes.  If a coach is primarily engaged in administrative duties, then the salary threshold must be applied. Additionally, the DOL does not consider undergraduate and graduate students engaged in research or extracurricular activities as employees, and therefore they are not subject to the minimum wage or overtime requirements of the FLSA.

The transition to non-exempt biweekly pay will take place on November 20, 2016, the start of the biweekly pay cycle covering December 1, 2016.

Departments are being provided with lists of affected employees that will need to be updated in PPS from monthly, exempt appointments to biweekly, non-exempt appointments.

  • Changes to academic employees must be updated in PPS by 6 PM, Friday, October 28, 2016
  • Changes to staff employees must be updated in PPS by 6 PM, Monday, November 7, 2016
Additional Information to Assist in Transition

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