UNM is to be in compliance with a new federal regulation that extends overtime pay to some of its employees.
The new policy of the Fair Labor Standard Act (FLSA) will go into effect Dec. 1, potentially extending overtime pay to over four million workers nationally. Meanwhile, UNM is re-classifying some exempt and non-exempt employees and focusing on tracking employee hours.
The current FLSA regulation is that employees earning $23,660 or less per year and performing certain job tasks were entitled to overtime pay.
The change to the regulation almost doubles that number to nearly $45,000 per year, requiring that those earning less be compensated for working over 40 hours a week.
Dianne Mulder, business operations manager at UNM's Institute for Social Research, said many people were surprised by the “big jump” from the original $23,660.
Mulder said she thought the new amount would be a compromise between the original amount, adding that the FLSA overtime pay threshold hasn't been changed in years.
UNM Law Professor Scott Hughes said the old threshold wasn’t at pace with the cost of living. Employees who earned the level of the old cut-off "could hardly make it," he said.
The change is also attributed to large-scale changes in pay, as more and more employees are getting bigger paychecks. Peter Kierst, UNM political science lecturer, said in the 1970s, 67 percent of the workforce was below the threshold and eligible for overtime pay, while today only seven percent earn less than the threshold.
That figure will now be updated every three years, according to officials at the Bureau of Business and Economic Research.
Suzane Reagan, program manager at the bureau, said the Department of Labor estimates as many as 20,000 New Mexico employees could be eligible for overtime pay under the new rule, but they are not all going to be affected in the same way.
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“It will interesting to watch how employers and workers adapt to this change,” she said.
Amber Bailey, a strategic support manager at UNM Human Resources, said there are other considerations that will determine whether an employee qualifies for overtime pay in regards to the new regulation.
Bailey said an employee’s department may decide to pay them above $47,476 if they tend to work more than 40 hours a week on a regular basis, so they won’t be paid overtime.
Reagan said UNM is raising the salary of UNM post-doctorals above the threshold so they will remain ineligible for overtime pay.
Kierst said most teachers make less than the threshold and if overtime pay was expanded to teachers the public education budget would explode with a large amount of teachers working over 40 hours per week.
"If teachers were paid overtime, it would bankrupt the school system," he said.
Kierst said teachers are "somewhere between white collar and blue collar" work and the change to FLSA mainly affects white collar workers, those in administrative and managerial positions. In addition, a large number of women could benefit from the change, as women that come into the workforce later via lower paying jobs tend to fill traditional secretarial and administrative positions.
“A lot of it will come down to whether employees are exempt or not. A lot of students don’t know the distinction between exempt and non-exempt,” Kierst said.
According to UNM’s human resources website, FLSA classifies employees into two categories: exempt and non-exempt. Non-exempt employees are eligible for overtime pay and paid hourly, while exempt employees are on salary, paid monthly, and ineligible for overtime pay. Employers are required to pay non-exempt employees time and a half for hours worked over the 40 hour work week.
UNM Libraries Specialist Joseph Lane said with the change, his employment classification will switch from exempt to non-exempt. He said it shouldn't be a big difference, and he'll still be paid the same amount yearly.
"It's not very often that UNM allows employees to work overtime," Lane said, as employees who work overtime need special permission.
According to UNM policy, an employee must be authorized by a supervisor to work overtime.
If an employee works overtime unauthorized, UNM is still required to pay them for their work. However, UNM can also discipline that employee for not getting approval.
Lane said he and some of his colleagues feel they've been demoted with the new classification.
"Some of us feel we were at a professional level and now we're going back," he said. "It's demeaning for those of us who thought of ourselves as professional staff."
Hughes said the change is not meant to demean anybody, adding that while the exempt classification may carry some status, it's better than employees not getting paid for overtime work.
Employees of public institutions generally prefer non-exemption because they are eligible for overtime pay, he said. He did admit that an employer might not be able to afford to pay employees overtime and may decide to watch employee time closely so they don't work more than 40 hours.
Kierst said another option for employers is to hire more employees to do the extra work required, so employers don't have to pay employees time and a half.
Hughes said, under FLSA, if a non-exempt employee works over 40 hours and they aren't paid overtime, their employer is essentially committing wage theft. He said that while big retail merchandisers are often accused of this, a public institution like UNM isn't likely to commit wage theft when their actions are required to be transparent.
"It's much easier for private institutions to commit wage theft because there's no one looking over their shoulder," Hughes said.
Reagan said an employee who is not paid according to the FLSA rule and is owed back pay for their overtime work can file a wage claim through the Department of Labor's Wage and Hour Division. Reagan said wage claims are made across the country every month.
