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Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) is the law, first passed in 1938, that establishes minimum wage, overtime pay, record keeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments. Covered non-exempt workers are entitled to a minimum wage of not less than $7.25 an hour. Overtime pay at a rate of one and one-half times the regular rate of pay is required for non-exempt employees after 40 hours of work in a workweek (Sunday through Saturday for TAMU).

From time to time, the Department of Labor evaluates the regulations associated with FLSA and proposes changes. On April 23, 2024, the U.S. Department of Labor (DOL) announced a final rule regarding the Fair Labor Standards Act (FLSA). Key changes in this ruling update the earnings thresholds necessary to exempt executive, administrative and professional employees from the FLSA minimum wage and overtime pay requirements.  

The Final Rule raises the "standard salary level" from the previously enforced level of $684 per week to $844 per week (equivalent to $43,888 per year for a full-year worker). Changes went into effect on 7/1/2024. 

Under the regulations, there are three sets of tests that must be passed to be considered exempt from FLSA. The first is a job duties test to determine whether a position's duties primarily involve executive, administrative, or professional duties as defined by the regulations. The second is a salary basis test, which says to be exempt you earn a predetermined amount of compensation that cannot be reduced due to the quantity and quality of work performed. The third is a salary test. Currently, the salary test is a minimum threshold of $43,888 per year ($844 per week or $3,657 per month). 

Three tests flow chart

Certain professional positions, such as teachers, doctors, veterinarians, and lawyers, do not have to meet the salary threshold to be considered exempt. This teaching exemption applies to faculty titles and others such as Graduate Assistant - Teaching. Graduate Assistant - Research are also in a special category due to being engaged in research while obtaining an advanced degree under the supervision of a faculty member. 

The status of "exempt" and "non-exempt" under FLSA determines whether an employee earns overtime or compensatory time for hours worked in excess of 40 hours per workweek. Employees who are exempt from the requirements of this law do not earn overtime and are paid a monthly salary at Texas A&M University regardless of the number of hours worked. Employees who are non-exempt from the requirements of FLSA are paid on an hourly basis, on a bi-weekly pay schedule at Texas A&M University and are eligible for overtime pay or compensatory time for hours worked over 40 in a workweek.

The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). The federal minimum wage is $7.25 per hour effective July 24, 2009. Federal and State minimum wage is $7.25 per hour. At Texas A&M University, there is no exception to pay below this hourly rate. For information on minimum wage, refer to the Department of Labor's Minimum Wage page.

All hours must be entered in Workday through the Workday Time Worklet or in Kronos. Non-exempt employees are paid overtime for hours worked over 40 in the work week (Sunday - Saturday). Non-exempt employees earn FLSA overtime whenever the hours they actually work in a workweek exceed 40. FLSA can only be earned for hours worked. Paid leave—such as vacation and paid sick leave—and holidays do not count when determining FLSA overtime hours. This is not a pro-ratable number of hours; part-time non-exempt employees must work over 40 hours in a workweek before they are paid overtime or accrue overtime compensatory time (comp time). Since Texas A&M University is a public institution, we can give federal comp time in lieu of overtime payment. Overtime compensatory time has a maximum accrual, which is normally 240 hours except for employees who work in public safety, emergency response, or seasonal activities. These employees can accrue 480 hours. Any overtime worked beyond those limits must be paid until the compensatory time bank can be reduced.

State compensatory time (state comp time) is awarded if an employee hasn't worked over 40 hours, but the total hours worked and hours of paid leave or holiday pay exceed 40 hours. State comp time is 1 hour of time for every hour over 40 (combined work and paid absence) in a workweek.

It is important to note that overtime is based on the number of hours worked in the work week, not the pay period. Hours that are not actually worked (holidays, sick, vacation, etc.) do not count towards calculating overtime. FLSA overtime is accrued hours actually worked over 40 in a workweek. The FLSA overtime rate is 1½ hours of comp time or 1½ times the regular rate of pay. Texas A&M University is required to comply with the FLSA rule and must pay overtime regardless of the source of funding. FLSA regulations stipulate that you must pay non-exempt employees overtime pay even if the overtime was not pre-approved. It is important to closely watch an hourly employee's attendance.

Federal law does not allow an employee to waive their right to appropriate compensation for all hours worked. A non-exempt employee who volunteers to work overtime must be paid for that time because he or she is being "suffered or permitted" (in the language of FLSA regulations) to work for the benefit of the University. To ensure the department has not "suffered or permitted" the overtime work, the supervisor must instruct the employee not to work overtime without prior approval; continued working of unauthorized overtime hours by an employee may become a disciplinary issue.

Your department will determine whether overtime pay or compensatory time off is given for overtime hours. To change comp time from banked to paid or vice versa, an employee or their manager, timekeeper or HR contact can go to the employee's worker profile and click on the Actions button, scroll over Personal Data, and click on Edit Other IDs.

The line for Comp Time Banked should be reviewed. If it says No, comp time will be paid out; if it says Yes, the hours will be banked. Click the Edit button to change the Other ID preference. Note that if the change is made after a timesheet deadline, the change will not take effect until the next pay period. If the employee does not have the option of Comp Time Banked in their other IDs, click Edit > Edit Other IDs then click the plus (+) sign to a line to type in Comp Time Banked to add to the list of other IDs. The employee can then specify if they want the comp time banked (yes) or paid (no).

To register for TrainTraq courses, visit TrainTraq in your Single Sign On (SSO) menu.

  • TrainTraq Course: 211169 Fair Labor Standards Act (FLSA) Working Hours Training
  • TrainTraq Course: 2113632 Paying Employees in Workday
  • TrainTraq Course: 2112755 Comp Time Issues for Employees
  • Traintraq Course: 2112756 Comp Time Issues for Supervisors