Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and federal, state, and local governments.  

Exempt versus non-exempt

The difference between exempt and non-exempt positions is that employees whose positions are classified as exempt are not eligible to receive overtime, while non-exempt employees are. In the simplest terms, exempt employees are paid for the work they do regardless of how long it takes them to do, while non-exempt employees are paid for the time they work. 

Exempt positions

To be considered exempt, a position must pass a duties test and a salary threshold test set by the Department of Labor (DOL). 

• Salary Basis Test: Employee must be paid a predetermined and fixed annual salary that is not subject to reduction because of variations in the quality or quantity of work performed. 
• Salary Threshold Test: The amount of salary paid must meet a minimum specified in the regulations. This page contains more information on upcoming FLSA minimum salary changes for exempt positions.
• Duties Test: The position description must reflect primary duties that pass one or more duties tests. For a position to pass the duties test, an HR professional must be able to answer which exemption test the position meets and how it meets the criteria for that exemption test.

Following are the most common exemption tests as detailed in Fact Sheet #17S, which establishes exemption tests for higher education institutions. 

Teachers

A teacher is exempt if his or her primary duty is teaching, tutoring, instructing, or lecturing to impart knowledge and if they are doing so as an employee of an educational establishment.

• If the teacher meets this duty requirement, the salary level and salary basis tests do not apply.
• Professors, instructors, coaches, and adjunct instructors typically fall under this exemption. 

Executive

To qualify for the executive employee exemption, all of the following tests must be met:

• The employee must be compensated at a salary rate as defined in the DOL regulations. 
• The employee’s primary duty must be managing the enterprise or managing a customarily recognized department or subdivision of the enterprise.
• The employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent.
• The employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion, or any other change of status of other employees must be given particular weight.

Administrative

To qualify for the administrative employee exemption, all of the following tests must be met:

• The employee must be compensated at a salary rate as defined in the DOL regulations. 
• The employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers.
• The employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.
• An employee’s qualification for the exemption depends on his or her actual job duties; job titles alone are not sufficient for determining whether an employee satisfies the duties test.

An example of administrative positions in higher education is admissions counselors. 

Professional - Learned and Creative

To qualify for the learned professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis at a rate as defined in the DOL regulations. 
• The employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and includes work requiring the consistent exercise of discretion and judgment.
• The advanced knowledge must be in a field of science or learning.
• The advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

Positions that typically fall under this exemption include registered or certified medical technologists, nurses, physician assistants, accountant, chefs, paralegals, and athletic trainers.

To qualify for the creative professional employee exemption, all of the following tests must be met:

• The employee must be compensated on a salary or fee basis at a rate as defined in the DOL regulations. 
• The employee’s primary duty must be the performance of work requiring invention, imagination, originality, or talent in a recognized field of artistic or creative endeavor.

Non-exempt positions

The FLSA requires that employees in non-exempt positions be compensated at time-and-one half rate for all hours worked over 40 in the work week. For more information on how to determine overtime hours and what constitutes hours worked, review the university's Policy 4320: Guidelines for the Fair Labor Standards Act (section 3.1).

Overtime

Non-exempt employees who work above the standard 40-hour work week are to be compensated at a time and one-half rate for all hours worked above 40. The standard Virginia Tech work week is normally Friday from midnight to the following Friday at midnight. Overtime compensation may be in the form of time and one-half pay or time and one-half leave, also called compensatory leave or "comp time". Public universities or colleges that qualify as a “public agency” under the FLSA may compensate non-exempt employees with comp time in lieu of overtime pay. Virginia Tech does qualify as a public agency under the FLSA; which form of overtime compensation is granted is at the discretion of the employer/department.

Virginia Tech ultimately retains the overtime liability for all non-exempt employees. Upon the separation of applicable non-exempt employees, overtime leave balances must be paid out. Non-exempt employees may amass up to a maximum of 240 hours of overtime or comp time. Amounts beyond this must be paid at the time and one-half rate. For more information, refer to Policy 4300.

Reporting Time

Time reporting is a requirement of both policy and federal law to ensure that employees are accurately and fairly paid for the time they are performing work. 

Non-exempt employees are responsible for accurately tracking and recording all hours worked using the appropriate system. Full-time, non-exempt employees record hours in the Leave and Time Worked Reporting System. Part-time/wage, non-exempt employees use TimeClock Plus to record their time worked.

Staff employees should request approval of overtime work within a reasonable amount of time prior to the expected date of overtime work. Supervisors should only authorize overtime in exceptional instances of an emergency or temporary nature. In all instances, the duration, nature, and scope of the overtime work should be clearly articulated and freely agreed upon by both the supervisor and employee.

Student employees

Most students who work for their college or university are hourly, non-exempt workers and do not work more than 40 hours per week. However, following are examples of students who often receive a salary or other non-hourly compensation:

• Graduate Teaching Assistants: Graduate teaching assistants whose primary duty is teaching are exempt. Since they qualify for the teacher exemption, they are not subject to the salary basis and salary level tests.
• Research Assistants: An educational relationship exists when a graduate or undergraduate student performs research under a faculty member’s supervision while obtaining a degree. Under these circumstances, the department would not assert that an employment relationship exists with either the school or any grantor funding the student’s research. This is true even though the student may receive a stipend for performing the research.
• Student Residential Assistants: Students enrolled in bona fide educational programs who are residential assistants and receive reduced room or board charges or tuition credits are not considered employees under the FLSA. They therefore are not entitled to minimum wages and overtime under the FLSA.

An employment relationship will exist when a student receives compensation and his or her duties are not part of an overall education program. For example, students who work at food service counters, sell programs or usher at events, or wash dishes in dining halls and anticipate some compensation (for example, money or meals) are considered employees entitled to minimum wage and overtime compensation.

Minimum Wage

The current minimum wage in the Commonwealth of Virginia as of Jan. 1, 2023 is $12 per hour.

Employers of “tipped” employees (i.e. those who customarily and regularly receive more than $30 a month in tips such as servers in restaurants) may include tips as part of their wages, but employers must pay a direct wage of at least $2.13 per hour if they claim a tip credit. They must also meet certain other conditions as outlined by the FLSA.