Vol. 38, No. 18

1-18-2005
By: Susan Wittstock

Ohio State moves forward with FLSA compliance

The university is moving forward in its efforts to comply with the U.S. Department of Labor’s Fair Labor Standards Act (FLSA). The revised FLSA regulations, which went into effect Aug. 23, 2004, have redefined who in the U.S. workforce is eligible for overtime pay. As a result, an estimated 700 Ohio State employees, excluding all faculty and lecturers, may become eligible this spring for overtime pay for hours they work beyond the normal 40-hour work week.

Annual pay will not change for affected employees unless overtime is incurred, although their annual pay will be distributed in 26 bi-weekly checks rather than 12 monthly checks.

“We are engaged in a good faith effort to achieve compliance,” said Larry Lewellen, associate vice president for human resources. “We are expecting to implement any necessary changes by May 2005.”

The administration did not want to rush the process, Lewellen said. “We wanted to take a step back and be sure we’re doing this right. We want managers to have time to contact employees and thoroughly answer any questions they might have,” he said.

If a position is changed from exempt to non-exempt status, the affected employee will become eligible for overtime and will be required to complete a timesheet each week.

When employees move from monthly pay to bi-weekly pay, their paychecks will be processed using the university’s standard procedure for bi-weekly checks, meaning the paycheck they receive on May 27 will be for the two weeks they worked at the beginning of the month. As a result — for May only — they will experience a two-week gap in pay.

“We will be offering employees the option of a transitional check on May 13 that will help bridge the gap between their last monthly paycheck and their first bi-weekly paycheck,” said Karen Carroll, director of payroll services. “We understand that the switch from monthly to bi-weekly pay could create a short-term strain on budgets, so we are offering several options to help cover that two-week delay in pay.”

One option for employees is to choose to accept a pay advance for the transitional paycheck. The employee will then repay the advanced amount over the next 12 months, beginning with a deduction from the first bi-weekly paycheck on May 27 and continuing through the next 25 pay periods.

Another option for employees will be to use accumulated vacation to fund the transitional check. For example, an employee who has 80 hours of vacation time accumulated could choose to have the entire amount paid out on May 13.

A third option would be to use a combination of vacation time and pay advance. For example, an employee could choose to use 20 hours of vacation time, and use payroll advance for the remaining 60 hours.

“Employees will need to decide if they wish to fund the gap with a payroll advance or use vacation or a combination of vacation and payroll advance. They also might decide to not accept any form of advanced pay,” Carroll said. “Affected employees will receive information to help them select the option best suited to their personal circumstances.”

The university will adjust standard deductions, which include health care premiums, for the 26 bi-weekly paychecks. However, employees will need to make decisions regarding the optional deductions, such as to a credit union or for 403(b) deductions that are taken from each paycheck.

“Individual information specific to these deductions will be mailed to employees’ homes,” said Shari Mickey-Boggs, director of work/life and a team leader for FLSA changes. “For example, if you currently have $50 deducted from your monthly paycheck for a 403(b) account, you might choose to reduce that amount to $25 for each bi-weekly check.”

Lewellen stressed that the FLSA changes are not intended to be personal. “We’re doing this in direct response to the revised federal regulations,” he said. “It should not be interpreted by anyone as a loss of status. There is no change in benefits and this does not change the university’s view of the positions.”

This fall, the Office of Human Resources conducted a review of staff titles and positions that could be affected by the revised regulations. The review included studying job specifications and position descriptions.

To ensure the accuracy of exemption status, the university hired the law firm of Vorys, Sater, Seymour and Pease to assist in the review process. The legal team and OHR completed the review in late December. At that time, a list of employees whose status will change from exempt to non-exempt was provided to senior/HR fiscal officers.

“We conducted a pilot training session in December for HRPs (Human Resource Professionals) and managers,” Mickey-Boggs said. “This month, we’ll be offering formal training for key communicators, HRPs and managers who have staff in their units who will be affected by the revised FLSA guidelines. We’ll be sharing tools and strategies with them to help make the transition as smooth as possible for all involved.”

The training will include background information about FLSA, Ohio State’s process for implementation, strategies for informing the employees and information on how to provide support to employees during the change. Key communicators will notify affected employees in late January and February.

In addition, the Medical Center will be conducting training for the College of Medicine HRPs and Health System HR Business Unit directors and consultants in January.

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