Fair Labor Standards Act (FLSA) - Exempt Part-time Classifications
The University of New Mexico recently received an opinion from the US
Department of Labor (USDOL) regarding the application of current FLSA
laws to regular and term part-time staff employees in "Exempt" position
In accordance with FLSA law, an employee who earns less than $455 per
week must be considered "Non-Exempt" (accountable for hours worked
and eligible for overtime payments) regardless of whether or not
the generic position classification to which s/he has been assigned has
been otherwise determined to be "Exempt" from FLSA provisions.
The USDOL opinion has further clarified the appropriate application
of this part of FLSA in relation to part-time employees. The essence of
the opinion is as follows:
Any employee in an otherwise "Exempt" position
classification who, by virtue of reduced appointment percentage (FTE),
receives an actual salary rate that is less than the equivalent
of $455 per week must be administered as Non-Exempt during that period,
regardless of the amount of the employee's annualized FTE pay rate.
An employee is correctly classified as a "Program Specialist", which
is an "Exempt" classification. The employee's full-time-equivalent pay
rate is $45,000/year, which translates to $865.38/week.
This employee, however, works at a reduced appointment percentage
equivalent to 0.5 FTE. Therefore the actual amount being paid to
this employee is $22,500/year, which translates to $432.69/week.
In this case the actual pay rate is below the FLSA exemption
minimum of $455/week. According to the USDOL opinion, the employee must
be administered as "Non-Exempt" even though the position classification
passes the FLSA exemption test for employees earning more than this
The above ruling applies to most Exempt position classifications, but
there are exceptions, as follows:
- Part-time employees in otherwise exempt teaching, licensed medical
practitioner, licensed attorney, or outside sales classifications are
not affected by this rule.
- Part-time employees in otherwise exempt computer-related
classifications are not affected by this rule if they earn at least the
equivalent of $27.63/hour ($57,470.40/year @ 1.0 FTE).
In cases where the ruling does apply, it may affect both employees in
part-time positions and employees who are job-sharing in a full-time
It will not, however, affect other employees assigned to the same
position classification if:
- Actual pay is equivalent to $455/week or more
- And position can be demonstrated to meet all other exemption
requirements as outlined by FLSA.
Employing departments must ensure that any employee in an exempt
classification who receives a reduction in appointment percentage is
changed to non-exempt status if his/her actual base salary falls
below the equivalent of $455/week as a result of the reduction.
Note: The above amount translates to
$1,971.67/month, or $23,660/year.
In these cases, the change in exemption status should be noted both
on the ePAN and a copy of this
form, which has been developed for this specific purpose. The
completed package should then be forwarded to the Division of Human
All FTE changes must coincide with the beginning of a biweekly pay
period. For the payroll schedule go to http://www.unm.edu/~payroll/schedule.html
and click on "Payroll Schedule 2014".
An hourly pay rate must be established based on the actual weekly rate
of pay divided by the nominal hours worked per week (calculated from the
The employee will at that time become subject to all provisions of
the Fair Labor Standards Act. The department must ensure that all hours
worked are accounted for on timesheets, that the employee is paid for
any time worked over his/her established FTE, and that overtime rates
are paid for any hours in excess of 40 that are worked during a given
Departments will be expected to exercise due diligence by monitoring
each employee falling into this category on a monthly basis and ensuring
that s/he is reinstated to exempt status if the actual weekly salary
over the period is subsequently increased above $455 for any
administrative reason. The Division of Human Resources will carry out
second-level campus reviews on a quarterly basis, and departmental
records are subject to internal audit.