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U.Va. adjusts to new federal labor regulations
At least 333 more positiions subject to overtime

By Charlotte Crystal

After an in-depth review of new federal labor regulations, which took effect Aug. 23, the University has changed the designations of about 333 positions (283 currently filled, 50 currently vacant) from “exempt” to “nonexempt,” meaning that these positions are now eligible for overtime compensation.

With this change, most of the Academic Division’s 4,300 staff positions are subject to required overtime compensation — time-and-one-half payment either in salary or leave time — for more than 40 hours of work in a workweek. This change leaves about 1,700 classified positions exempt under the new regulations.

How This Change Effects Employees

• Of the Academic Division’s 4,300 staff positions, roughly 2,600 are now
eligible for overtime compensation as “nonexempt” employees.

• No one in the Academic Division lost the right to earn overtime.

• At least 333 University positions changed from exempt to nonexempt;
the majority are in Pay Bands 3 and below.

• At the Health System, the new regulations will have had little impact as
many employees have been nonexempt for some time, for market reasons,
even though federal regulations haven’t required it.

The new regulations make it more difficult for the University to designate a position as being exempt from overtime requirements, according to Thomas E. Gausvik, chief human resource officer.

“While many labor organizations expected large numbers of employees to lose their right to overtime pay, this will not be the case at the University,” Gausvik said. “Instead, the new regulations will have quite the opposite effect. The affected employees now will receive overtime pay for actual hours worked over 40 in a workweek, translating into greater compensation.”

The new Fair Labor Standards Act regulations, issued by the U.S. Department of Labor, update and clarify the criteria used to determine when an employee must be compensated for working overtime. The regulations raise the salary threshold to $455 per week, or $23,660 annually, before an employee’s position can qualify as exempt.

The majority of University positions that were changed from exempt to nonexempt are in Pay Bands 3 and below. Pay Band 3 includes administrative and clerical positions. Other staff positions, namely those in the executive secretarial-administrative assistant category in Pay Band 4, also were changed from exempt to nonexempt.

A continuing review likely will identify additional positions in Pay Band 4 and faculty nonteaching positions that will be changed from exempt to nonexempt, Gausvik said.

The new salary threshold is not prorated for part-time positions. With the exception of a few professions, including teaching, all other positions not meeting this new salary threshold are automatically considered to be subject to the new regulations. The new regulations also add a new exemption test for highly compensated employees (those earning at least $100,000).

Starting with the Aug. 25 semi-monthly payroll, affected employees will be required to document all of their work hours on the University of Virginia Time Management Form.

At the U.Va. Health System, the new regulations will have little impact, said Graham Grove, director of human resources information systems and acting compensation director for the Health System.

“For market reasons, we have counted many of our employees as nonexempt for some time, even though the federal regulations haven’t required us to do so.”

Gausvik said that no nonexempt employees in the Academic Division saw a change in status under the new regulations — no one lost the right to receive overtime payment. He also noted that the new regulations will not lead to any layoffs or affect hiring at the University in any way.

He expects the financial impact on the University to be minimal.
For more information on the new federal regulations, visit the U.S. Department of Labor’s Web site: http://www.dol.gov/.
Select “FairPay Overtime Rules.”

Questions about the status of University staff positions may be directed to Dave Ripley, director of compensation management, by phone at 924-4373, or by e-mail at dwr@virginia.edu.


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