FLSA updates double overtime salary threshold, alters department budgets


An increase to the Fair Labor Standards Act will more than double the threshold that dictates overtime pay for university employees.

The FLSA originally required any person under a $23,660 yearly salary be allowed overtime salary. Now that threshold has increased to $47,476 yearly salaries.

With the changes, individual departments are required to analyze and reallocate their budgets to afford this federal mandate. This tries to achieve a work-life balance for employees, but could restrict money given to student organizations as part of the General Activity Fee (GAF) structure.

The FLSA changes will go into effect Dec. 1, 2016.

This salary threshold determines if an employee is eligible for overtime and is meant to increase employee pay or give them more time off, according to Vice President of Student Affairs Michaela Willis. If an employee makes less than this new cutoff amount, they can be moved to overtime eligible unless the university brings their salary up to that amount.

On the other hand, if an hourly employee makes more than this cutoff amount, they will no longer be overtime eligible and may be switched to salary pay.

While every employee will be affected differently, the overall goal of this mandate is to put more money in the pockets of middle class workers and improve work-life balance for others, said Willis.

Departments affected include Student Affairs, Admissions, Residential Life, the Wellness Center and The Union, among others. Willis said Residential Life and Admissions will feel the biggest impacts due to their large amount of employees currently eligible for overtime.

“So in my opinion, yes, it needed to be updated, whether it needed to double — that is another question,” Willis said. 

This update does not come free, however, as this is an unfunded mandate from the federal government.

In order to pay for this one-time update, Willis does not anticipate a GAF increase and instead said departments are reallocating money to pay for these changes.

“We’re working on how we can absorb that without impacting students,” Willis said.

But Students’ Association President Ally Helms said these changes may still have internal budgeting impacts on the GAF.

SA oversees the $9.62 University Activity Fee and Budget Committee portion of the GAF that breaks down into tier one and tier two subcategories.

Helms anticipates the tier one load to increase with the FLSA changes, which pays for the Wellness Center and Student Union expansions and maintenance fees. Student Affairs may push some of their payments into this GAF subcategory in order to afford these FLSA update costs, she said.

“While it may not raise GAF, the tier one budgets may take more out of the GAF than before. As tier two budgets get pinched down, that makes our budgeting a lot harder and makes our cuts [for tier two] a lot more,” Helms said. 

Tier two of the UAFBC group includes money for all-inclusive clubs, speaker funds, special allocation funds and new club venture funds. 

“If we need to end up compensation for tier one, some funds may not be available for some of those clubs,” Helms said.

Despite an apparent scarcity of money, Willis said changes to the FLSA will not cause any layoffs around campus. In fact, Willis believes it will be healthy for departments to “take a hard look at what they’re doing” in terms of budgeting and tidy things up.

Marc Serrett, associate vice president of Human Resources believes these changes will positively impact SDSU employees. However, he also believes the change could have been introduced differently into the system.

“[This mandate will] either restore that work-life balance for some of those employees or it puts more money in those employees’ pockets, which is always a good thing,” Serrett said. “Doing it all at once isn’t nice from the employer standpoint. It would have been nice to do it in chunks.”

Going from salary pay to hourly pay can negatively affect an employee’s morale and can be seen as a pay regression rather than a pay raise, Serrett said. About 100 of the affected 160 university employees will go from salary with overtime exemption pay to hourly wage with overtime eligibility. 

“The big impact is morale. The overtime exemption was a status thing for some people and going back to hourly [pay] is a back step,” Serrett said. “It just feels like you’ve less autonomy.”

According to Serrett, university employees paid through grants will also be affected by this mandate since grants do not honor wage increases. Most departments have not been able to receive compensation for wage increases by those who gifted the grant money.

The changes most felt around campus will be shifts in some employees’ work hours, Willis said, emphasizing that these employees will not be any less committed to their jobs nor the students.

“The flexibility changes, that’s what students will see more of … I think it’s important for students to know that this is a good thing for the employees and in no way showing the staff don’t want to be here at those hours — it’s about creating that balance,” Willis said. “My team is very concerned about the student impact.”

While the university acclimates to these new changes to the FLSA, university officials assure both employees and students that these changes are being made for the better.

“It’s going to be an adjustment for folks, but in the long run it offers them more protection and it’s a good thing,” Serrett said.