FLSA Impacts/Benefits Enrollment

Oct. 13, 2016

This May, the federal government released new regulations regarding employee classifications under the Fair Labor Standards Act (FLSA).  We have researched and analyzed the new regulations and offer several observations:  first, the new regulations have no impact on our faculty.  There are, however, two major aspects which determine how a staff position is classified:  one is the “duties test” and the other is the “wage level test.”  The duties test criteria remains unchanged.  However, the wage level at which a position is classified as exempt is increasing from the current $455 per week ($23,660 annually) to $913 per week ($47,476 annually) effective Dec. 1, 2016.

What does this mean?  Most JU staff members currently classified as administrative positions paying a weekly salary less than $913 per week will be reclassified in December to staff non-exempt.  Any individual classified as staff non-exempt come December will, by federal law, be required to complete weekly time cards.  If a staff non-exempt employee works more than 40 hours in a work week, the University will pay the excess hours as overtime.

The Office of Human Resources has been diligently reviewing the impact of this change over the past several months.  This review has included meeting individually with campus managers to determine the impact on positions in their respective areas.  Human Resources has also consulted with other institutions of higher education as they consider implementing these changes.  Because of the complexity of higher education, the Department of Labor has also issued special guidelines for colleges to review.  Our Department Managers have been made aware of any special guidelines that may affect their area.

With new federal regulations, we can naturally expect questions.  One of the most frequently asked questions has been the potential impact on benefits, particularly vacation accrual.  Jacksonville University, like many higher education institutions, provides a separate accrual treatment for exempt and non-exempt positions.  The options to the University were to:

• Modify administrative employees' accruals to match their new non-exempt status, resulting in a reduction of time;
• Modify vacation accruals for all staff employees under a new schedule; or,
• "Grandfather" current administrative employees who will be reclassified to non-exempt employees to keep their current vacation benefit the same.

I am pleased to inform you that we have decided there will be no change to vacation benefits. I have approved “grandfathering” current employees so their vacation benefits remain intact.  New individuals hired after Dec. 1, 2016, in positions classified as non-exempt will come under the normal staff schedule.

An Open Forum will be held in late October to answer any questions you may have regarding these upcoming federal changes to the FLSA.

On a separate note, this is the time of year when we renew our benefit programs. I am also very pleased to announce there will be no increase in your cost for our medical, dental or vision plans for 2017. This is the second consecutive year in which both the University and employee costs have not been increased.  The benefit plan designs are also remaining consistent, so you will keep our very competitive benefit plans.  Special thanks to the Office of Human Resources for its hard work and solid negotiations on our behalf with our multiple benefit partners.

More details regarding Open Benefit Enrollment will be sent out to the campus within the next several weeks.

If you have any questions, please do not hesitate to contact the Office of Human Resources at extension 7025.

Thank you for your excellent work in making us a better University; we are pleased to offer this guidance and update on vacations and benefit costs.

Sincerely,

Tim Cost
President
Jacksonville University
Class of 1981