Last month, an additional 600 employees in the University of Missouri System became eligible for overtime pay, a result of new Fair Labor Standards Act regulations imposed by the U.S. Department of Labor in 2004.
That brings the number of new nonexempt employees to 1,200 since August.
The February change marks the end of the second, and final, stage of the transfer process for the system. A review of 950 job titles, completed a month ago, determined that 600 employees affected by the revised law remained and needed to be moved from exempt to nonexempt — a switch from the salaried payroll to hourly.
The employees will be compensated in either overtime pay or compensatory time for all hours exceeding 40 worked in a week. Four hundred of the 600 employees are at MU.
The new labor regulations took effect Aug. 23, making anyone in the country who makes less than $455 a week eligible for overtime compensation, compared with the old standard, $155 a week.
An employee’s duties also play a role in determining eligibility.
“We based our decisions on job descriptions and past job documentation now in our files,” said Bill Edwards, UM’s director of compensation and program support. “In some cases, we requested updated materials while studying job titles.”
Tomás Custer, whose title at MU is “I-Net administrator specialist,” said he wasn’t happy with the way positions were reviewed.
“Most people knew that their positions were under review,” Custer said. “I had no idea my title was under review, so I just found out one day that I was going hourly.”
Custer, in the College of Education, considers his job a combination of two other jobs’ duties: graphic designer and programmer. Both of those jobs remain exempt.
“It’s almost as if they took a dart and threw it and said this is changing,” Custer added. “It makes no sense to me, the rhyme and the reason for things changing.”
One of the main changes employees see is the switch from salary to hourly pay, a change that could be viewed as altering their status in the hierarchy of positions.
Custer just had his fifth anniversary with the university, and although he doesn’t consider the change to hourly employee a blow to his status, he had been a salaried employee for all five of those years. Additionally, a year ago his title changed from multimedia specialist to I-Net administrator specialist, a change he considered a promotion. The old position remains salaried.
Pat Willis, administrative associate I in MU’s biology department, was one of the original 600 employees whose status was changed. Five months as an hourly employee has altered her perspective.
“To be honest with you, in the beginning I thought it was kind of a slap in the face, but now that more details have come out and we understand it more, my status has not changed other than being eligible for overtime,” Willis said. “In the beginning, there was a lot of discussion about it, but it’s kind of one of those things that came down from the government, and the feeling is that there’s not a whole lot we can do about it.”
In the first stage of the transfer process, UM reviewed about 14 job titles — ones that affected the most people — and implemented the status changes Sept. 1. Employees affected in the second stage were notified in an e-mail Feb. 15 and were moved from an exempt to nonexempt status Feb. 27, at which time they began to maintain time sheets.
“I would hope that employees don’t feel that there’s a cultural or status change, because there really isn’t,” Edwards said. “All of our jobs are needed and they add value to the organization. They really shouldn’t feel as though this is affecting their importance.”
Most jobs do not require overtime hours. Both Willis and Judy Richey, an office management associate at MU who went to nonexempt status Feb. 27, said the overtime eligibility makes no difference for them.
“There will be some increased cost, but for most individuals and their departments we do not foresee a significant change in the manner our employees complete their work assignments,” Edwards said.
Others, however, have noticed a difference. Matt Nevels, systems support analyst specialist in the MU biology department, was switched to an hourly employee in the fall and has found that although he’s not pressured to fit his work into fewer hours, he probably does.
“I’ve ended up working a few less (hours) probably,” Nevels said. “I’ve just got to make a little more efficient use of the time I’ve got.”
It’s difficult to predict how the hourly pay might change his job over the long run.
“With my position, we’ve got busy times and slow times, so it’s hard to say how much that’s going to affect,” Nevels said.
Custer’s workload also varies.
“If there’s one week, and there have been weeks in the past, where it requires me to live in the office, I’ve done that,” Custer said. “The university is on a tight budget as it is; they’re not going to give out overtime.”
As an exempt employee, Custer did not receive overtime for any extra hours he worked, but the new regulations will require that he receive either overtime pay — which is 1½ times the hourly pay – or compensatory pay — 1½ hours time off at a later date for every overtime hour worked. The question is, where will the extra money come from for those weeks that Custer lives in his office, or where will the work go if he doesn’t work the overtime hours?
“There will be an increase in the university’s expense coming from overtime pay,” Edwards said. “How much this will be and where it will be felt has not been fully determined.”
UM policy is to issue hourly employees’ paychecks twice a month, compared with once a month for salaried employees. The employees who had their status changed in February can elect to switch to the new pay schedule May 8 or Oct. 9.
“My big worry will be when I have to transfer,” Custer said. “The system that they have set up for that is a little daunting and a little scary due to the cash-flow problems I will have during the transition period.”
Two paychecks a month will change how deductions —such as welfare benefits, tax-deferred investments, and state and federal withholdings — are taken out. MU’s human resources services held open forums the week after employees were notified of their move from exempt to nonexempt status to help clarify such issues.
The UM system also grandfathered in the exempt vacation-accrual schedule for the now nonexempt employees.
“The university did not have to do this, but we felt employees were given this benefit in good faith and that we wished to honor that commitment,” Edwards said.
New employees or those promoted into the nonexempt jobs will accrue vacation time on the nonexempt schedule.