Q1:             What is happening?

A1:             Effective August 23, 2004, the U. S. Department of Labor issued new regulations governing the Fair Labor Standards Act (FLSA) Overtime Exemption Rules.  The changes mark the first major changes to the exemption tests for overtime pay under the FLSA in more than 50 years.  

The law requires employers to pay employees at least the current minimum wage and to pay overtime at one-and-one-half times the regular hourly rate for all hours worked above 40 in a normal workweek. The law also defines the requirements for keeping records of hours worked by non-exempt employees. 

The new regulations:

·         Raise the salary thresholds that must be reached before an employee can be classified as exempt from the overtime pay provisions of the law.

·         Rewrite the job duty criteria that serve as additional tests for determining the exempt status, and

·         Replace the old “long” and “short” tests with new “standard” tests for seven exemption categories. 

The seven exemption tests used to determine if work is exempt, whereby employees who perform that work are paid a salary and are not eligible to receive overtime pay, are for:

Q2:             How do the changes to the FLSA overtime exemption rules impact us at Princeton University?

A2:             As a result of the changes, all organizations, universities and companies covered by the FLSA regulations, must review the exemption status of their jobs using the new standard tests and ensure compliance to the new FLSA overtime exemption rules.  An FLSA project team has been established, consisting of members from the Office of Human Resources, with guidance from the Office of the General Counsel, Provost, Treasurer, and Vice President for Administration to gather and analyze job content data to ensure Princeton University’s compliance with the law. 

Q3:             Will any jobs change as a result of this review? 

A3:             The answer to this will not be known until the information is collected and analyzed.  It is possible, however, that certain exempt jobs (monthly) may not qualify for an exemption status under the new rules.  Conversely, we may find that there are certain non-exempt jobs (bi-weekly) that will qualify for an exemption. 

Q4:             What is the difference between an exempt and a non-exempt job?

A4:             Employees in jobs that are designated as “exempt” are exempt from the pay provisions of the law governing overtime pay.  Employers are, however, required by law to pay their “non-exempt” employees (employees whose work does not qualify them for an exemption status based on the new tests) for overtime work at a rate of one-and-one-half times the regular hourly rate for all hours worked above 40 in a normal workweek.  The law also requires that employers maintain a record of their non-exempt employees’ time records.  

Q5:             Where will the information needed to conduct the review come from?

A5:             OHR has developed a Job Content Questionnaire for employees to complete.  The form is designed to collect specific information in order to address the parameters required to meet the standard exemption tests.  OHR may also need to follow up with incumbents or their managers to further clarify and explain job content. 

Q6:             What type of information will be provided by the Job Content Questionnaire?

A6:             There are six sections to the Job Content Questionnaire:

Q7:             Some employees don’t know what their job code is.  Is this kind of information required in order to complete Section I (Introductory Information)?

A7:             Yes.  In addition to job code, the questionnaire requires job title, employee name and number, manager, and the department or university office.  To simplify the task of completing Section I (Introductory Information), OHR has provided this information to managers.  Staff members should check with their managers for the correct information needed to fill in the blanks.

                  Also requested is the number of hours spent, on average, in the job during a typical work week.   

Q8:             What type of response is expected in Section II (Job Purpose)?

A8:             Section II (Job Purpose) should be just two or three brief sentences that describe the overall purpose of the job – that is, the main reason it exists. It may be easier to summarize the Job Purpose after completing Section III (Major Duties).
Some examples of Job Purpose are:

·         The purpose of this job is to perform a wide range of administrative duties in support of the “Office of _______________” objectives.

·         This job is responsible for recommending and improving work processes for the “____________ Department”. 

Q9:             Is Section III (Major Duties) redundant since Section II already summarizes the reason the job exists?

A9:             A “primary duty” is a key component of the new rules used to determine the exemption status of a job. Section III (Major Duties) provides more detail.  The employee should prioritize the three or four major responsibilities he or she performs and include the percentage of time spent, on average, for each during a typical work week.  Each duty listed should be qualified with examples of discretion and judgment utilized to accomplish the duty.  The FLSA project team will use all this information to identify the “primary duty/duties” of the job. 

Q10:           Does Section IV (Supervisory Responsibilities) need to be completed if the employee has no direct reports?

A10:           No.  Section IV (Supervisory Responsibilities) has a series of easy to answer “Yes / No” questions related to the responsibility of providing direction to others.  If the response to the question 1 (“Are you responsible for the direction/supervision of employees?”) is “No”, the employee should skip to Section V (Responsibilities for Departmental Operations).

Q11:           What does Section V (Responsibilities for Departmental Operations) provide?

A11:           This is an important factor in the analysis.  It provides additional information to what may be included in the responses to Section III.  The answers to the three questions in Section V (Responsibilities for Departmental Operations) are used to further define the extent to which an employee uses judgment and discretion that may affect the operation of the department.  Some examples of determining the means, methods and materials might be establishing work processes and standards, assigning resources and creating project plans. 

Q12:           Different employees performing the same job may have different skills and knowledge.  Can two incumbents in the same job but with different backgrounds end up in different classifications, i.e. one exempt and one nonexempt?

A12:           No.  A job’s exemption status is determined by identifying the minimum requirements for the job, not the skills and knowledge of the employee(s) in the job.  The instructions for Section V (Minimum Skills and Knowledge Requirements) request that only MINIMUM skills or knowledge requirements be listed.  For example, when an employee has an undergraduate degree but the work does not require a degree, the answer to question three would be “high school diploma” not a “bachelor’s degree”.  If an employee is unsure of the responses provided he/she should request assistance from the manager, or defer the responses for this section to the manager. 

Q13:           What happens once the questionnaire is completed by the employee?

A13:           The employee is instructed to forward the form, electronically, to his/her manager.  The manager will review the information supplied, review and discuss any changes in the information with the employee, date the form and submit to flsamail@princeton.edu. 

Q14:           When will the employee know the results of this review?

A14:          Gathering the information and conducting the analysis is estimated to take at least two months.  Given that time frame, employees should expect to hear about the results early this summer. 

Q15:           Who should be contacted if there are questions not covered in this FAQ?

A15:           If there are further questions regarding this process, please contact the Office of Human Resources at 8-3300.