The Idaho State Legislature does not have enough time to react to changes to the federal Fair Labor Standards Act (FLSA) that, due to state law, could jeopardize the benefit packages of about 140 University of Idaho staff members.
The change will raise the minimum salary for employees to be exempt from requiring compensation for overtime pay. Wes Matthews, director of Human Resources, said 140 staff members at the university will be moved from classified to exempt due to the change. The employer of an exempt employee is not required by law to compensate them for overtime.
“If you become non-exempt, we no longer get to abuse you and you can go home at 5 p.m.,” Matthews said.
He said though the change will force some employers at the university to make hard decisions. The main issue for staff members is the effect the change will have on their benefits.
He said according to Idaho state law, vacation time and retirement plan options are tied to the FLSA’s definitions of exempt and non-exempt or classified employees. Employees switched from exempt status could lose as many as three weeks of vacation time and lose their retirement plan options.
The change will take effect Dec. 1, and Matthews said for the university to make changes in time, the practical date is Nov. 20. The state legislature does not reconvene until January, meaning it will have no time to react and adjust the state’s benefits policies.
Sept. 28, the U.S. House of Representatives passed a bill that would delay the implementation of the change for schools and nonprofit organizations by six months.
The bill would need to survive the scrutiny of the U.S. Senate and president by Nov. 20 for the delay to be meaningful to the university, Matthews said.
“If you can keep your benefits, it’s easier to make the change,” Matthews said.
The state law itself presents issues for the university as well, he said.
“The employer’s predicament will be, ‘Do I need the employee to stay exempt, so I pay them more, or do I pay them overtime instead?’” Matthews said.
He said currently, the FLSA states that an income of $455 per week or $23,660 per year is the cutoff point, above which an employee is exempt from being owed overtime pay. With the change, the cutoff will be $913 per week or $47,476 per year.
However, the law only applies to staff.
“If an employee’s primary duties are teaching, they are exempt,” Matthews said. “But that’s not good news.”
He said about a third of the approximately 140 staff members who will be affected by the change is made up of staff conducting postdoctoral research.
Matthews said as part of receiving pay for overtime work, non-exempt or classified employees are required to log the hours they work.
“Some people see it as, ‘You used to trust me and now you don’t,’” Matthews said.
The basics of the change also concerns Brian Mahoney, associate director of facilities and operations at the Student Recreation Center (SRC).
Mahoney said the capabilities of some programs, including the SRC’s outdoor program, could be hurt by the regulation.
He said the outdoor program has already been affected by the change of a position to be classified from exempt due to internal reasons, and there is at least one employee who would be switched from exempt to classified under the changed law. He said employees for the program often work heavy overtime for trips inherent to the job.
“The industry norm is those are positions where people get paid a certain amount to get the job done,” Mahoney said. “We don’t have money for overtime.”
Mahoney said he thinks the university could still increase the funding necessary to keep the activities of the program leveled, but he is still worried it will lose some of its capabilities.
Nishant Mohan can be reached at [email protected] or on Twitter @NishantRMohan