ISM has seen schools struggle to come to grips with increasing regulations and how they apply at your school. (Short answer: Schools are subject to almost as many federal employment laws as Walmart, IBM, or Google.) Since most (perhaps all) of the responsibility for employment law compliance falls on your desk, we want to help in this issue with what might be one of the most pressing issues at the moment—exempt/non-exempt compliance.
Why It's Urgent: Increasing Enforcement
We see more and more headlines each week warning that the federal government is ramping up enforcement of "wage and hour" regulations. Among other aspects, this means ensuring that employees who are eligible for overtime pay receive it when they work overtime. In practical terms, this may mean an investigator showing up at your door for a random audit—or, an investigation prompted by a complaint.
Before this happens to your school (and there is nothing protecting private schools from investigation), we're pleased to offer an abbreviated "course" on the basic elements of what you need to know about this topic.
Fair Labor Standards Act (FLSA)
Fact 1: The law was first passed in 1938—so, "we didn't know" isn't going to stand up as a defense.
Fact 2: The law considers that everyone is eligible for overtime pay—until proven otherwise. The tricky part is how to "prove otherwise." (read on)
Fact 3: To get some important terminology out of the way: "Exempt" employees don't qualify for overtime pay; "non-exempt" employees do qualify and must be paid overtime rates (time-and-one-half) when overtime is worked.
Fact 4: Overtime means the number of hours actually worked in a week that are over 40 (example: working 44 hours in a week = 4 hours overtime). Note: In some states (such as California), overtime is also based on working more than 8 hours in one day.
Fact 5: Exempt employees must meet one of the established exemption criteria (see Fact 8), as well as being paid on a salaried basis. However, non-exempt employees can be paid on a salaried basis, too—but they still need to be paid overtime when overtime is worked.
Fact 6: All of the above applies regardless of what might be specified in the employee's contract (i.e., a contract can't take away rights to overtime pay for non-exempt employees).
Fact 7: Exempt or non-exempt status depends on the job duties, not the person, or the title, or—very important—the Head's discretion (i.e., this one time, it's not up to the Head—it's up to the federal definitions).
Fact 8: The FLSA exemptions categories most pertinent to private schools are:
- executive/managerial (example: Heads and Division Heads)
- learned professional (example: teachers)
- administrative (example: accountant)
- IT (which has very specialized rules)
This means that a position has to meet the criteria established for one of these exemptions in order to qualify as an "exempt" position. (See www.dol.gov for specific definitions).
Some examples of non-exempt positions in private schools are clerical (administrative assistant, receptionist), bookkeeper, maintenance, kitchen staff, assistant teachers, and daycare/primary care workers.
Fact 9: Comp time is illegal in schools (and other private employers)—depending on what you mean by "comp time."
If your school was one of the many that made staff cutbacks this year, then you might have several non-exempt employees working extra hours. You can control the hours for all non-exempt personnel. Example: If a non-exempt employee works two extra hours on Monday, you can send them home two hours early on some other day that week so that they do not go over 40 hours for the week (which would trigger overtime pay). What you can't do is allow employees to bank overtime hours (i.e., keep track of comp time that they can use at some future time) instead of paying them for the overtime worked. Non-exempt employees must be paid for the overtime when it is worked. (Have we repeated that part enough?)
Fact 10: It's important that you keep accurate, detailed records of hours worked (i.e., use time sheets). No one likes filling out time sheets—especially in schools, where the general feeling may be "we should all be treated the same" and people may question why one group (secretaries) has to fill out time sheets while faculty members do not. The short answer is because accurate time records are required by the law, and the school appreciates (and requires) the employees' help in complying with the law and keeping the school safe.
Note: We've taken a complex topic and boiled it down to its major elements. Please understand that this is an over simplification, though—so please consult with your attorney for all of the pertinent details.
