The Fair Labor Standards Act / Employment Classifications

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay,and recordkeeping requirements for employers. In order to comply with the FLSA, the College is required to classify each position as either exempt or non-exempt from provisions of the FLSA, and to implement appropriate payroll practices.

All newly created or restructured positions must be classified by Human Resources as exempt or non-exempt from the requirements of the FLSA. The Department of Labor has established criteria by which each position must be evaluated to determine exempt vs. non-exempt status. When a new position is created, or the duties and responsibilities of a current position change fairly significantly, the department manager must submit a detailed position description to Human Resources so that the position can be properly classified. In the absence of an up-to-date position description, all new positions will be classified as non-exempt from the provisions of the Fair Labor Standards Act, meaning the job holder will be paid an hourly wage and must submit time sheets reflecting actual work hours.

Full-time, Exempt Faculty and Professional Staff

Employees holding executive, administrative, or professional positions, as defined by the Department of Labor, are exempt from many provisions of the Fair Labor Standards Act. Such employees are classified as exempt because of the type of work performed, and/or because of specialized training required for the position. To be classified as exempt, a job holder must earn at least $455 per week. In addition, the job holder must meet other Department of Labor criteria such as managing a department, hiring and supervising employees, routinely exercising discretion and independent judgment with respect to matters of significance, and/or teaching. Employees in this category do not report their work hours on timesheets (although the College does require exempt staff to record their paid time-off -- vacation and sick days -- on online time sheets), and are not eligible for overtime compensation. Full-time faculty members receive 1/12 their annual salary each monthly pay period, and exempt members of the professional staff receive 1/26 their annual salary every other week.

The salary of exempt personnel may not be reduced if they are absent from work, or based on the quality or quantity of work, except under limited circumstances as specified by the Department of Labor. Deductions may be made from the pay of exempt employees only in the following instances:

• When an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability.

• For absences of one or more full days due to sickness or disability, if the deduction is made in accordance with a bona fide sick leave policy. Deductions for full day absences for sickness or disability may be made before the employee has qualified under the policy and after the employee has exhausted his/her paid sick leave allowance.

• To offset any amounts received by an employee as jury fees, witness fees, or military pay in the case of absences caused by jury duty, attendance as a witness, or temporary military leave.

• For penalties imposed in good-faith for infractions of safety rules of major significance.

• For unpaid disciplinary suspensions of one or more full days, imposed in good- faith for infractions of written workplace conduct rules (for unsatisfactory work performance or attendance, any unpaid suspension may not be less than an entire work week).

• During the initial or final month of employment, if the employee does not work the full month.

• If an exempt employee takes unpaid leave under the Family and Medical Leave Act.

Full-time, Non-exempt Professional Staff

Employees whose jobs fall within the categories of secretarial, clerical, technical, paraprofessional, skilled crafts, service, and maintenance are classified as non-exempt per the federal Fair Labor Standards Act. All provisions of the Fair Labor Standards Act, including minimum wage and overtime payment provisions, apply to non- exempt employees. All non-exempt personnel must be paid for each hour worked, and must be paid at least minimum wage ($7.25/hour), plus an overtime premium if working more than 40 hours during one work week. As required by federal regulations, non-exempt personnel must record all actual hours worked on timesheets each pay period. Payment is made for 15 minute increments of work. Time sheets must be completed by the staff member and then approved by the supervisor in a timely manner each pay period. Non-exempt staff members are paid their hourly rate of pay for each hour they work and enter on their timesheet each pay period, plus an overtime premium - equal to .5 their regular rate of pay for each hour - if they have work more than 40 hours during one week.

The workweek for payroll purposes begins on Sunday and concludes on Saturday. Hours over 40 in one workweek are compensated at a rate of 1.5 times the non-exempt staff member's regular rate of pay. Please see the Overtime Policy for additional details.

Part-Time Employees

Part-time members of the faculty and professional staff are limited to no more than 29 hours of work per week, and a maximum of 999 work hours per employment year (i.e., the 12 month period following the employee's date of hire, and each subsequent 12 month period). Part-time members of the faculty and staff are not eligible for fringe benefits coverage.

Some part-time staff positions are authorized and budgeted to work more than 999 hours per year, but must work no more than 29 hours per week. When formally authorized and budgeted, part-time staff who work more than 999 hours per year (but under 30 hours per week) are provided with limited benefits coverage.

All part-time professional staff positions are to be classified as non-exempt. A non- exempt part-time employee must be paid at least minimum wage, and must enter his/her actual work hours through online timesheets each pay period.

Full time employment must generally be followed by retirement or a 26-week break in service in order to change to part time status.

Seasonal or Temporary Employees

Temporary personnel are generally classified as non-exempt and must be assigned an hourly rate of pay and complete online timesheets. Temporary employees generally work no more than 29 hours per week. A temporary employee may be scheduled for 30 to 40 hours per week only if the employee will work for the College no more than a total of 3 months during a calendar year. Temporary employees are not eligible for fringe benefits coverage. (Note: Human Resources must be contacted before employing anyone under age 18, to assure federal and state child labor laws are being adhered to.)

Student Workers

Franklin & Marshall students who perform work for the College are considered "student workers". Student workers are generally classified as non-exempt, but may hold exempt positions if Department of Labor criteria for an exemption are met. Individuals who perform work for the College during the summer immediately preceding their freshman year, individuals who work for the College during the summer immediately following their graduation, and part time students are generally not considered student workers. Student workers are not eligible for fringe benefits.

Interns and Volunteers

Individuals classified as interns or volunteers are not paid wages by the College and are not considered "employees" by the Department of Labor. Such individuals must meet specific criteria in order to be classified as interns or volunteers. Unpaid interns and volunteers are not eligible for any benefits or insurance coverage, including Workers' Compensation coverage. Unpaid interns and volunteers may serve for only a limited period of time, generally a maximum of one academic year.

Current College employees generally may not volunteer their services to the College, and must be paid for all working hours.

In order for an individual to be classified as an unpaid intern, all of the following criteria must be met:

1. 1. the internship is similar to training that would be received in an educational environment;

   2. the experience is for the intern's benefit;

   3. the intern does not displace regular employees or do work that a regular employee would normally do, but works under close supervision of existing staff;

   4. the College derives no immediate advantage from the intern's activities and, on occasion, may actually be impeded in its operations;

   5. the intern is not necessarily entitled to a job at the conclusion of the internship;

   6. the College and the intern understand that the intern is not entitled to wages for the time spent in the internship.

Per Department of Labor regulations, to be classified as an unpaid volunteer, an individual:

1. 1. must donate his/her services for civic, public service, religious, or humanitarian reasons without promise, expectation, or receipt of compensation for the services rendered;

   2. must offer his/her services freely and without coercion, direct or implied;

   3. generally may provide services only on a part-time, vs. full-time, basis; and

   4. may not otherwise be employed by the College to perform the same services as those to be performed on an unpaid basis.

For assistance in determining whether an individual may be classified as an intern or volunteer, please contact Human Resources. Anyone who will be performing work for the College without wages must be registered through Human Resources. The manager or department chair is to contact Human Resources before appointing an intern or volunteer.

Independent Contractors/Consultants

Independent contractors and consultants are not considered employees of the College and are paid through Accounts Payable. Because taxes are not withheld from their payments, only those who meet the Internal Revenue Service's definition of an independent contractor may be paid through Accounts Payable. Independent contractors are not eligible for any benefits or insurance coverage, including Workers' Compensation coverage.

Before paying someone as an independent contractor or a consultant, rather than hiring and paying the individual as an employee of the College through the payroll system, various factors must be analyzed. Before paying someone as an independent contractor or consultant, please contact Human Resources.

The following may be indicative of an employer-employee relationship and not an independent contractor or consultant relationship:

• Control Over the Work Performed - the College specifies when, where, and how work is to be performed; the individual's work is closely monitored; a College employee provides regular direction and guidance to the individual performing the work; the College requires that work be performed on College premises even if the work could be done elsewhere. (An independent contractor / consultant must be free from control or direction from the College regarding specifically how work is performed.)

• Training - the College provides training to the individual so he/she can perform work in a particular manner.

• Furnishing of Tools and Materials - the College provides tools, materials, or other equipment to the individual. (An independent contractor must provide his/her own tools and equipment.)

• Hiring, Supervising, and Paying Assistants - the College selects and hires, supervises, and/or pays employees to assist the individual in the performance of work.

• Established Hours of Work - the College determines the hours during which work will be performed.

• Full-time Schedule - the individual must devote essentially full time to providing services to the College. (An independent contractor / consultant must provide similar services to other employers.)

• Payment by the Hour, Week, or Month - the individual is paid an hourly rate, or by the week or month, rather than a lump sum / pre-established fee for an entire project.

• Payment of Business or Travel Expenses - the College pays the individual's business and/or travel expenses.

• Continuing Relationship - the individual maintains a continuing professional relationship with the College / continues to perform work for the College.

• Performing Work Only for the College - the individual performs work only for the College. (An independent contractor /consultant is someone who customarily performs work for more than one employer at a time and has his/her own independent business or profession. An individual who makes his/her services available to the general public on a regular and consistent basis is more likely to be viewed as an independent contractor.)

• Contract - the individual does not have a written contract with the College. (State law requires independent contractors to have a written contract with the College and to maintain liability insurance.)

The College requires that independent contractors/consultants have a contract with the College for services. Contact contracts@fandm.edu for appropriate contract language.

Please note: Benefits coverage, including Workers' Compensation coverage, is not provided to interns, volunteers, and independent contractors.

Standard Work Hours for Professional Staff

The standard work hours for non-exempt staff positions are authorized and budgeted before the position is filled. Full-time, non-exempt staff members are generally scheduled to work 35 to 40 hours per week, with a 30 to 60 minute unpaid lunch break. Non-exempt staff may be asked to work additional hours / overtime hours, with pay, based on department needs. Additional hours may be worked upon authorization from the supervisor.

Exempt staff generally work at least 40 hours per week, with an additional 30 to 60 minutes per day for a lunch break. Exempt staff are expected to work extra hours when necessary to effectively complete assignments.

The standard hours of operation for offices and departments on campus may vary, based on department needs. Most offices are open from 8:30 a.m. to 4:30 p.m., Monday through Friday. The actual working hours of each staff member within a department may extend beyond these hours of operation.

The College provides reasonable flexibility with daily work hours, if properly approved, per the

Flexible Work Hours Policy. Per this policy, professional staff are to continue to work their regularly scheduled number of hours each day, but may adjust the time they arrive on campus and leave each day, with prior approval from their supervisor, based on personal needs.

Benefit Eligibility / Hours Worked

For purposes of most fringe benefit plans, an employee must be formally classified and budgeted as "full-time" to be eligible for the benefit. Full-time employees are scheduled to work at least 30 hours per week for wages on a regular basis. Visiting, tenure-track, and tenured faculty; a faculty member on an approved shared appointment working at least 1,040 hours annually; full-time faculty members participating in the Phased Retirement Program; and employees who are scheduled to work at least 30 hours per week during the academic year are classified as full-time. For the purpose of participation in the College's Retirement Plan, federal regulations require the College to acknowledge a "Year of Service" for anyone who works 1,000 hours or more during the 12-month period starting with the date of employment. If an employee does not complete 1,000 hours by his/her first year employment anniversary, a new 12-month period running from his/ her first to second employment anniversary, and subsequent years of employment, is used for applying the 1,000 hour work test.

Pay Procedures

Rates of Pay-- Hourly pay rates for non-exempt personnel are determined by: 1) the job grade for the position and the corresponding pay range, 2) job performance, and 3) length of time in the position. For newly hired non-exempt employees, prior relevant work experience may be considered when setting an appropriate starting rate within the pay range for the job grade. An employee's base annual salary is determined by multiplying his/her hourly rate by the number of hours he/she is regularly scheduled to work each fiscal year. 

Salaries for exempt professional staff positions are based on the requirements of the position, the relation of the position to others at the College, salaries for similar positions in the relevant labor market, and budgetary guidelines. When setting an appropriate salary within a predetermined range, the job holder's skills, abilities, and relevant prior work experience are taken into account.

Pay Schedules—Members of the professional staff are paid every other Friday (bi- weekly) for time worked during the preceding two-week period. Non-exempt staff members must complete online timesheets during each pay period to record their work hours and any paid time-off. Exempt staff are required to record their paid vacation and paid sick time through online timesheets.

Faculty members are paid once per month, on the 25th of each month. If the 25th falls on a weekend, pay day will be the preceding Friday. If that Friday is a College holiday, pay day will be the preceding Thursday.

Salary Increases-- Pay increases for eligible, full-time faculty and professional staff, and part-time staff, are generally provided once per year and are effective July 1. Increases are subject to budgetary guidelines and approval by the President and Board of Trustees. Increases for members of the professional staff are based on "merit" - an employee's job performance, as assessed by his/her manager and Senior Officer during the annual performance review - and the College's budgetary guidelines. Professional staff hired April 1 through June 30 are eligible to receive their first increase on the July 1 of the calendar year following the year in which they were hired.

For faculty, salary increases are based on an "across-the-board" component and a merit component. Untenured faculty and tenured faculty who are outside the merit system receive an across-the-board salary increase. Tenured faculty who do not yet have a merit rating or who are participating in the Phased Retirement Program are considered outside the merit system and receive an across-the-board salary increase.

Approval Process-- It is the policy of the College that all changes to a professional staff member's compensation must be approved by the Vice President or Provost responsible for the staff member's department and the Vice President for Finance and Administration or his/her designee. No manager or College representative has the authority to establish pay levels, grant pay increases, or modify fringe benefits coverage for any employee without first obtaining these required approvals.

Procedures for Reporting Errors in the Payment of Wages

Franklin & Marshall College intends to abide by all applicable federal and state wage and hour regulations. If a College employee or student employee feels he/she has not been paid correctly; has been told his/her pay will be improperly reduced ("docked"); or pay has been improperly reduced, the following procedure is to be followed:

• A professional staff member or faculty member who feels he/she has not been paid correctly is to promptly contact Human Resources. (Routine questions regarding pay, taxes, or standard deductions may be directed to the Payroll Coordinator, 717-358-5995.)

• Student workers are to promptly report errors in pay to the Student Employment Manager at 717-358-6045 or to the Payroll Coordinator at 717-358-5995.

When the College receives a complaint regarding payment of wages, it will conduct a prompt investigation. The individual making the complaint will be apprised of the outcome of the investigation. If the individual making the complaint is not satisfied with the results of the investigation, he/she may file a complaint through the College. If the complaint is found to have merit, appropriate action will be taken to remedy the situation.

No retaliation will be taken or permitted against an employee or student worker who makes a good-faith complaint regarding payment of his/her wages.

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Policy Maintained by: Human Resources, Associate Vice President
Last Reviewed: July 25, 2016