HR Connection Newsletter

VOLUME 5 SUMMER 2006

Table of Contents

• Save the Date - 3rd Annual Employee Appreciation Day
• Speaking Compensation
• Benefits Corner
• Tuition Reduction
• Meet Kevin O'Keefe, the new HR Information Systems Manager
• Faculty Orientation is Now On-Line!
• 2006 Professional Development Workshops
• 2006 Winter Holiday Closure Schedule
• Hooked on Books is Back
• 2006 Holiday Schedule
• HR Directory



• HR Connection Home Page

Exempt and Non-Exempt—What do these terms mean?

One of the objectives of Compensation Management is to ensure compliance with the wage and hour regulations as set forth in the Fair Labor Standards Act (FLSA). The FLSA provides specific criteria that determine how positions are paid. Positions that are covered (non-exempt) by the FLSA are paid an hourly rate for all hours worked, while positions that are not covered (exempt) by the FLSA are paid an annual salary. This is where the terms non-exempt and exempt originated.

The FLSA requires that employees in non-exempt positions be paid at least the minimum wage of $5.15 per hour for all hours worked. The FLSA also requires overtime pay be paid at time and one-half the regular hourly rate of pay for working more than 40 hours in a work week. (The regular rate of pay includes the base hourly rate, shift differentials, and most other types of pay that employees receive.) Compensatory time off (comp time), an alternative to overtime pay at the University, is another option by which employees in non-exempt positions are compensated for working more than 40 hours in a work week. Comp time is calculated at the same rate as overtime pay.

Some positions, if they meet established criteria, are exempt from the overtime and comp time requirements of the FLSA, which means that employees in exempt positions do not receive overtime pay or comp time for working more than 40 hours in a week. It is important to note that neither the job title nor the particular employee in the job determines the exempt status of a position. Rather, to qualify as exempt, positions must meet two tests—the “salary basis” test and the “job duties” test.

The salary basis test mandates the position receive a regularly salary of at least $455 per week. The job duties test is more complex. In order to be considered exempt, the duties of a position must fall under one of four exemption categories: executive, administrative, professional and computer related. A brief summary of the duties in each category are listed below (Source: U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division):

Executive Exemption
Primary duties involve managing the business, or a customarily recognized department; regularly supervising at least two or more full-time employees or their equivalent; and either has the authority to hire, discipline and fire, promote and evaluate employees, or makes recommendations that are given significant weight regarding these actions.

Administrative Exemption
Primary duties involve performing office or non-manual work directly related to the management or general business operations. This includes the exercise of discretion and independent judgment with respect to matters of significance.

Learned or Creative Professional Exemption
Learned Professional — Primary duties involve work requiring advanced knowledge in a field of science or learning that is customarily acquired by a prolonged course of specialized intellectual instruction.

Creative Professional — Primary duties involve the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

Computer Exemption
Primary duties consist of the application of systems analysis techniques and procedures; the design, development, documentation, analysis, creation, testing or modification of computer programs or machine operating systems; or a combination of these duties.

Compensation Management, using the established criteria of the FLSA, determines which University positions are exempt or non-exempt. However, clarification is often requested from departments to ensure that a position’s duties are fully understood and assigned the appropriate exemption status.

Please contact Compensation Management at 581-6206 with questions or requests for additional information about the Fair Labor Standards Act. More information can also be found on the Department of Labor’s website: http://www.dol.gov/esa/whd/.

The next edition of Speaking Compensation will focus on the specific details of overtime pay and compensatory time off requirements.

Benefits Corner

TUITION REDUCTION - who’s eligible?

As a benefit to employees working in full-time positions (75% FTE or greater), the tuition amount for classes taken at the University by employees and eligible family members is reduced. For undergraduate and graduate courses, tuition is reduced by one-half of the applicable resident or non-resident rate. Employees and their family members must meet the eligibility requirements prior to the first day of the semester in which classes are to be taken. See University Policy and Procedure #2-45 or contact the Benefits Department at 581-7447 for additional information.

Full-time faculty and staff are eligible for tuition reduction benefits after six consecutive months of full-time employment with the University. Undergraduate tuition reduction benefits are tax-free. Income taxes may apply to graduate tuition reduction benefits in certain situations.

Spouses of employees are eligible for tuition reduction after the employee has completed one consecutive year of full-time employment with the University. Tuition reduction benefits for graduate courses are taxable as wages to the employee unless the spouse is a teaching or research assistant for the University.

Unmarried, dependent children under the age of 26 of employees are eligible for tuition reduction after the employee has completed three consecutive years of full-time employment with the University. Tuition reduction benefits for undergraduate courses are tax free. Tuition reduction benefits for graduate courses are taxable as wages to the employee unless the child is a teaching or research assistant for the University.

Emeritus members and their spouses are exempt from payment of tuition and student fees. The tuition exemption is taxable for graduate courses.

Retired faculty and staff, their spouses and unmarried, dependent children under the age of 26, are eligible for tuition reduction if the employee completed five or more years of continuous service immediately prior to retirement. Tuition reduction benefits for graduate courses are taxable for retired employees, their spouses and children.

The surviving spouse and unmarried, dependent children under the age of 26 of deceased employees are eligible for tuition reduction if the employee completed six months of continuous service immediately prior to death. Graduate tuition benefits are taxable for spouses and children

Kevin O’Keefe is the new manager of the HR Information Systems (HRIS) Department. Prior to joining the HR Division, Kevin worked at Intel. He brings with him 9 years of experience in computer information systems. We are excited to have him part of the team.

Kevin can be reached at kevin.okeefe@hsc.utah.edu or 587-7764.

For the most current information, please visit the orientation web page at http://www.hr.utah.edu/training/orientation/faculty/.

Download the 2006 workshops schedule at http://www.hr.utah.edu/forms/lib/workshops06.pdf today!

For more information contact Training and Development at 585-2300 or register on-line at http://www.hr.utah.edu/training/register/allclasses.php.

Employees will be paid their regular rate for work hours scheduled but not worked on Tuesday, December 26th. Information on the University Closure Day process can be found at www.hr.utah.edu/comp/proc/sect_14.php. If you have any additional questions please contact your service team.

This holiday closing schedule does not apply to employees of University Hospitals and Clinics and identified employees in Health Sciences departments, and other departments providing critical services. Please notify members of your staff who are affected.

Come out and join us on Thursday, September 28, 2006 at Olympic Cauldron Park at Rice-Eccles Stadium for Employee Appreciation Day 2005.

Check out the Employee Appreciation Day web site for details.