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Impact of Fair Labor Standards Act Changes on Grant-Funded Positions

As you are probably aware, changes to the Federal Fair Labor Standards Act (FLSA) will go into effect on December 1, 2016.  These changes will result in some positions that are currently exempt (salaried) being changed to non-exempt (hourly) positions.  EKU Human Resources is currently reviewing positions that may be impacted by the changes and will contact supervisors during their review of individual positions.

For any position changing from exempt to non-exempt, the supervisor will be responsible for appropriately managing the employee’s workload.  For non-exempt employees, supervisors must ensure that any hours worked above 37.5 in a given week are compensated and that any hours worked above 40 in a given week are compensated at time and a half.   

For employees whose positions routinely require hours beyond the standard 37.5 hours per week and whose salaries do not meet the new FLSA minimum threshold for exempt positions, a salary increase may be recommended as a cost-saving measure to avoid over-time pay. 

In all cases, grant funds must be used to pay the salaries of any employees whose positions are funded by grants.  This includes increases to base salaries of exempt positions as well as pay for any additional or overtime hours worked during a given week for non-exempt employees.  University funds may be not be used to supplement grant funds in either situation. 

If you have questions regarding the status of employees who are paid on a grant, the project director should contact the HR consultant assigned to your area. 

If HR recommends changes to the salaries of employees who are paid on a grant award, the project director should contact Sponsored Programs for assistance with evaluating the impact on your project’s budget and determining whether a budget revision and/or sponsor approval is needed in order to implement HR’s recommendations.

Published on September 26, 2016

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