Minimum Salary Requirements for EHRA Non-Faculty

Title

Minimum Salary Requirements for EHRA Non-Faculty

Introduction

Purpose

The federal Fair Labor Standards Act (FLSA) imposes a salary minimum for exempt employees (e.g., those who are salaried and not subject to overtime) of $23,660 regardless of work schedule, both for permanent and temporary employees. Only salary directly paid through UNC-Chapel Hill's Payroll System may be counted toward meeting this limit.

In addition, the University's EHRA non-faculty guidelines also require a minimum salary requirement of $30,000 on an annualized basis. However, unlike the FLSA minimum, this $30,000 EHRA non-faculty salary minimum is adjusted to take into account employee work schedule and does not apply to temporary appointments.

There are various exceptions to these salary minimums which are discussed in this policy. Departments should carefully consider these limits when planning any proposed EHRA non-faculty appointments or making salary commitments to potential appointees.

Scope of Applicability

All EHRA Non-Faculty positions, both part- and full-time, are subject to certain minimum salary requirements as set forth in this policy.

Policy

Policy Statement

Minimum Fair Labor Standards Act (FLSA) Salary Basis for Salaried Positions

To comply with FLSA exempt minimum salary rules, all EHRA non-faculty salaried positions must have a total salary (base salary plus supplements) of no less than $23,660. This equates to a monthly equivalent of $1,972 or $455 per week. Only salary paid directly through UNC-Chapel Hill payroll may be counted toward satisfying this limit. Pay or stipends from outside organizations, such as may be present in visiting scholar situations, may not be considered in meeting this FLSA minimum salary requirement.

This requirement is irrespective of work schedule or the quantity of work perfo rm ed. Therefore, while someone with a full-time schedule with a base and annualized salary of $40,000 meets this requirement, an individual working a half-time schedule with the same annualized salary would not since their base salary would be $20,000. Special attention should be given to part-time EHRA non-faculty positions and their respective base salaries to assure compliance with these provisions.

Exceptions

FLSA provides exceptions to the minimum salary basis for practicing physicians, att orneys, teachers and those who otherwise provide instruction or tutoring to bona fide students. Certain computer professionals who are paid at least $27.63 per hour as well as individuals compensated on a "fee basis" (further described in this policy) are also excepted. Such exceptions must be reviewed by EHRA Non-Faculty Human Resources on a case-by-case basis to assure compliance with FLSA guidelines.

Part-Time Positions That Do Not Meet the Minimum FLSA Salary Basis

Part-time EHRA non-faculty appointments that do not meet the FLSA minimum total salary basis of $23,660, such as the example cited above, must be handled in one of three ways:

• The individual may be paid at an appropriate hourly rate as a non-exempt SHRA direct-hire temporary employee, which is subject to overtime .
• If the individual is performing only intermittent work on a lump sum payment basis and is not paid a regular recurring salary, the FLSA provides for "fee basis" compensation arrangements which are described further in this policy (see below).
• The individual may be engaged and paid as an independent contractor presuming the proposed arrangement meets the University's independent contractor guidelines.

Compensating Intermittent or One-Time Work via Lump Sum Payments Under a 'Fee Basis' Arrangement

"Fee basis" arrangements are not subject to the annualized exempt FLSA salary minimum of $23,660. Instead, such arrangements are typically compensated using lump sum payments since there may not be any inference of a continuing or ongoing employment relationship or non-unique recurring duties.

Individuals performing exempt administrative, professional or computer professional exempt duties may be paid on a "fee basis" under the following conditions:

• The employee is paid an agreed sum for completing a single job which is characterized as a unique task vs. an ongoing, recurring set of tasks or duties, and;
• the compensation is fixed regardless of the time required to complete the work, and;
• the compensation is no less than $455 per week during the period of time the work is conducted.

FTE Changes and the FLSA Exempt Minimum Salary Requirements

Since that the FLSA exempt minimum salary level is irrespective of the number of hours worked, it is conceivable that someone at a greater work schedule (e.g., 40 hours per week) may meet or exceed this minimum but that a reduction in work schedule (e.g., to 20 hours per week) with no associated increase in the annualized salary could cause the individual to have a new base salary that no longer meets the FLSA minimum salary requirement.

In these situations, the individual must either be paid as an SHRA temporary, have their base salary increased to the FLSA minimum to remain EHRA and FLSA exempt, or qualify for an exempt "fee basis" arrangement as described above .

For employees funded by a contact or grant, the terms of the contract or grant may need to be consulted to determine if such a status change requires re-negotiation with the sponsoring agency . In such cases, the Office of Sponsored Research (OSR) should be consulted for assistance. OSR has indicated that there are various opportunities to modify or re-budget contract or grant terms in order to permit the University to comply with statutory requirements such as the FLSA.

Special Note Regarding Visiting Scholars

On occasion, departments may invite visiting scholars to come to the University and participate or otherwise collaborate in research or instructional activities. If these scholars' duties principally involve the instruction of students, then the individual will qualify for an exemption from the FLSA salary minimum as a "teacher." However, for those scholars whose duties principally involve research and not the teaching of students, this FLSA exemption is not applicable.

In these cases, if the visiting scholar will be compensated any regular salary (other than a one-time honorarium) directly through UNC-Chapel Hill Payroll, a direct employee-employer relationship is then established between the University and the individual. This in turn results in the FLSA minimum annualized salary requirement of $23,660 being triggered. In these situations, the department could consider whether a contractual arrangement with the individual's sponsoring agency might result in direct payment to the University for services by the Scholar that in turn can be used to fund a UNC-Chapel Hill salary that meets the FLSA salary minimum.

Absent that, the other option, if the visiting scholar is proposed to be paid by UNC-Chapel Hill below an annualized salary of $23,660 is employment as an SHRA temporary employee on an FLSA non-exempt basis subject to overtime. An SHRA temporary appointment will be subject to a 12-month limit after which a break in-service requirement must be met.

Campus Minimum Salary Limit for EHRA Non-Faculty Positions

In addition to the federally mandated FLSA salary limit of $23,660 annually, there is a University requirement that any permanent EHRA non-faculty position must have a salary of no less than $30,000 on a full-time, annualized basis. Unlike the FLSA salary minimum, this campus minimum salary requirement is pro-rated for part-time positions. So in example, a permanent position which has a half-time work schedule and a base salary of $27,500 meets this requirement since the $27,500 base salary on an annualized full-time basis equals
$55,000.

The following positions are excluded from the minimum EHRA non-faculty annualized salary requirement of $30,000 but must still meet the Fair Labor Standard Act (FLSA) minimum salary basis of $23,660 annually.

• Temporary EHRA non-faculty positions
• Coaches and Assistant Coaches employed by the Athletics Department
• Student Affairs community management positions.
• Other unusual circumstances when approved by the relevant Dean or Vice Chancellor and the Office of Human Resources. In these circumstances, the relevant position may not be one that is reasonably addressed by SHRA temporary employee status.
• Post-doctoral fellows are subject to minimum salary requirements as prescribed by the University's post-doctoral scholar policies and are not governed by the above salary guidelines.

Any positions not meeting the minimum salary requirement and not falling under the above exclusions must be adjusted to meet this requirement no later than 6/30/2011 or the position must be converted to SHRA status to permit a lesser salary amount.

Note: The campus minimum salary requirement for EHRA non-faculty employees was approved and adopted by the UNC-Chapel Hill Chancellor's cabinet on 10/2/2008.

Example Scenarios

The following are examples of applying the minimum allowable salary amounts for an EHRA non-faculty position based on the combination of requirements noted above. These scenarios are provided to aid in understanding and interpreting these minimum salary policies.

Example 1

A permanent employee is proposed to be paid an annualized salary of $47,000 on a half­ time work schedule and therefore would have a base salary of $23,500. This employee does not meet the FLSA salary basis of $23,660. Therefore, the base salary must either be adjusted up to or above the FLSA salary basis of $23,660 ($47,320 annualized) or the individual must either be employed on the SHRA temporary payroll as a non-exempt employee subject to overtime or engaged as an independent contractor if the person meets the independent contractor guidelines.

Example 2

A permanent employee is proposed to be paid an annualized salary of $50,000 on a half­ time work schedule and therefore would have a base salary of $25,000. This salary meets the FLSA salary minimum of $23,660 and also satisfies the campus EHRA salary minimum of $30,000 on an annualized basis.

Example 3

A temporary employee is proposed to be paid an annualized salary of $25,000 on a full-time work schedule. This salary meets the FLSA salary minimum of $23,660 and also satisfies the campus EHRA salary minimum since temporary employees are exempt from the $30,000 minimum requirement.

Example 4

A temporary employee is proposed to be paid an annualized salary of $30,000 on a quarter­ time work schedule and therefore would have a base salary of $7,500 . While the position is exempted from the campus EHRA non-faculty salary minimum of $30,000 due to its temporary status, they would not meet the FLSA minimum salary of $23,660 and therefore must be employed on the SHRA temporary payroll as a non-exempt employee subject to overtime or the individual might be engaged as an independent contractor, if they meet the independent contractor guidelines.

Contact Information

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