In a recent communication from the Office of the Commissioner of Higher Education, Deputy Commissioner Kevin McRae explained the reasons for launching a job categorization project across the MUS system. Within Montana State University, we share the same goals:

  1. Ensure consistency in the use of employment categories and contracts for various purposes across the Montana University System in accordance with MUS policy.
  2. Ensure consistent reporting of  employee  jobs   within  the  Montana  University System, as well as to federal databases  (i.e. the Integrated Postsecondary  Education Data System, IPEDS).
  3. Ensure campuses are effectively prepared to implement anticipated changes to federal rules relating to the payment of overtime. As you may have seen in news reports in the past several months, the U.S. Department of Labor has proposed changes to the Fair Labor Standards Act (FLSA). The proposed changes will require all employers to identify -- under new standards -- the employees who are required to be paid on an hourly basis and eligible for overtime.

The College and University Personnel Association for Human Resources (CUPA) recently described relevant changes to FLSA overtime rules as follows:

Current Rules

Currently under the FLSA, an individual must satisfy three criteria to qualify as a white collar employee exempt from federal overtime pay requirements:

  • first, they must be paid on a salary basis (the salary basis test)
  • second, that salary must be more than $455/week, or $23,660 annually (the minimum salary requirement or salary threshold)

One important note, teachers, including professors, are not required to meet this portion of the test

  • third, their “primary duties” must be consistent with executive, professional or administrative positions as defined by the Department of Labor (the primary duties test)

Employees who do not meet [all] these three requirements or fail to qualify for another exemption must be treated as “hourly” or “nonexempt” employees and be paid for each hour worked over 40 in a given work week at a rate of one and a half times their normal hourly rate.

Proposed rule changes

Department of Labor (DOL) proposed setting the new minimum salary level at the 40th percentile of weekly earnings for full-time salaried workers, which is estimated to be $970 a week ($50,440 annually)

  • This is a 113% increase over the current minimum salary level of $455 per week ($23,660 annually)

DOL proposed automatically escalating this minimum salary on an annual basis by attaching it to the 40th percentile or by indexing the $970 number to CPI-U

DOL did not include a specific proposal to modify the standard duties tests; however, the department sought comments on whether or not they should do so.

The MSU Job Categorization Task Force has been created to ensure an organized, proactive and inclusive approach to this project. Information will be provided to campus throughout the upcoming year through this dedicated webpage and via various campus forums.The MSU Job Categorization Task Force has been created to ensure an organized, proactive and inclusive approach to this project. Information will be provided to campus throughout the upcoming year through this dedicated webpage and via various campus forums.

The task force will meet in February to organize the various aspects of this project. Human Resources anticipates working with administrative and academic units through the spring and summer to review and document non-faculty positions. In regard to compliance with pending new federal overtime rules, we anticipate information on final overtime/FLSA rules from the Department of Labor in late fall, at which point we will have specific information on the timeline for compliance/implementation.