Fair Labor Standards Act: Implementing Changes Directors Meeting November 16, 2016 – 9:45 am

Agenda What is the Fair Labor Standards Act (FLSA)? Why are we here? Exempt vs. Non-Exempt from overtime New Rules & Key Provisions What does this mean for FGCU? Preparing for November 20 Implementation What Managers Need to Know Timekeeping & Hours Worked Questions & Answers

Why are we here?

What is Changing on November 20? Ruling issued May 18, 2016 Effective date December 1, 2016 Salary threshold: $913 per week, $47,658.60* annually Set at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census region, currently the South Automatic update of the salary threshold every three years Beginning on January 1, 2020 *assumes 26.1 pay periods

FLSA Financial Impacts Financial Impact of Wage & Hour Non-Compliance Back pay for 2 years, or 3 years for willful non-compliance Liquidated damages (back pay x 2) for willful non- compliance Punitive damages for retaliatory conduct Legal fess, costs, and interest Penalties of up to $1,100 per employee

Does not meet requirements for exemption from overtime under FLSA Salary Basis Paid $913 per week Job Duties Primary duties of the position as they relate to the defined criteria for the exemption categories Job Complexity Discretion and independent judgment rather than daily, routine decisions with regard to matters of significance Exemption Meets additional criteria for Computer, Executive, Professional, or Administrative exemption Exempt from Overtime FLSA Exemption Assessment YES YES NO Does not meet requirements for exemption from overtime under FLSA Non-Exempt Designation YES YES

Exemption Classification Process HR is tasked with determining the exemption status of all staff positions in accordance with statutory provisions and established guidelines. Faculty positions are exempt from FLSA overtime requirements The position duties are exempt, not the employee All staff positions are individually reviewed to determined FLSA overtime exemptions A variety of actions may change a position’s exemption status: Law Position duties Position FTE/Change in Appointment months Other relevant factors/DOL Opinion Letters

What is NOT Changing on November 20? Base Rate of Pay Job Title Benefits – including leave accrual & ORP

What does this mean for FGCU? Campus-wide impact Financial impact Salary equity Organizational/cultural changes Changes to internal processes, structures, and systems Perception of non-exempt positions Tracking of hours worked Change management Communication Training for employees and supervisors

Partnership for Implementation HR has met with departments to devise the best overall implementation plan for the employees effected. Balancing Act Compliance Best Practice FGCU Culture Compliance, Consistency, and Compassion

Conversations for Change What you need to know

Human Resources Oversight Worked with divisions, colleges, and departments Offered campus wide information sessions Offer supervisor training in November and December Reviewed all AP classifications where one employee is below $47,659 Specific job duties and salary must meet all of the requirements of FLSA to be exempt Titles and supervision responsibilities alone do not determine exempt status When the FLSA exemption status is questionable THE DESIGNATION WILL BE NON-EXEMPT

Departmental Oversight Conversations for Change with your Employees Implement procedures and processes for tracking time worked Timekeeping - Non-Exempt Timesheet Train employees and supervisors on new expectations Track all hours worked for non-exempt employees Flexible options Include paid leave and holidays in calculations Accountability Travel time Increase supervisor oversight of work hours Overtime must be approved Compensatory time Do not include exempt staff in tracking of worked hours

Conversations with Employees This change in salary threshold does not require a change in job title or job duties. It is a nationwide shift that allows employees to be paid for the hours they work. This is a federal initiative impacting employees across the country This is not a demotion, it is a nationwide shift Remind employees that the shift means they will be paid for the work they perform AND at a rate of time and ½, when hours worked exceeds 40 in one work week

Team Dynamics Teams you work with may now have employees that will have to manage their time differently. It is important to be sensitive to this change. Meetings that go beyond the standard workday and requirements to work on deliverables or attend after hours functions may necessitate overtime. Even requiring non-exempt employees to monitor and respond to email or text messages may trigger hours that are compensable time.

Optimizing Schedules You should review the standard patterns of work that occur over a year, and forecast where there are peaks. Considering the right number of resources and supplementing and/or instituting flex schedules are some examples of adjustments you can make to minimize overtime hours. You may also need to prepare for a budget impact. When managing staff and approving alternate schedules, managers should remember that, in order to avoid overtime, changes to the work hours of hourly staff need to be managed within a single workweek (Sunday – Saturday). Paid Holidays and Leave are not considered time worked for calculating overtime eligibility.

Managing Time Affected employees and their managers will need to manage and track their time more closely than before so employees can be paid for all the time they work. As managers it is incumbent upon you to ensure that your nonexempt employees are trained and comply with all timekeeping requirements. It is critical that managers ensure 100% timely compliance to time entry, tracking, and approvals.

Overtime Defined Non-exempt positions must be paid for overtime hours at a rate of one and one-half times the hourly rate for all hours worked over 40 hours per week. Hourly rate is calculated at: Annual rate / 26.1 pays / 80 hours per pay period

Leave & Overtime – Exempt to Non-Exempt Employees w/Grandfathered Status New Hires Annual Leave Accrues at 6.77 hours per pay Maximum payout - 352 annual leave hours Year End rollover – in excess of 352 annual leave rolls into sick leave balance Eligible for overtime (NEW) Annual Leave Accrues at 4.0, 5.0, or 6.0 hours per pay, depending on years of service Maximum payout – 240 annual leave hours after 6 months of employment Year End rollover – in excess of 240 annual leave rolls into sick leave balance Personal day Eligible for overtime

Leave & Overtime – SP Exempt to SP Non-Exempt Annual Leave Accrues at 4.0, 5.0, or 6.0 hours per pay, depending on years of service Maximum payout – 240 annual leave hours after 6 months of employment Year End rollover – in excess of 240 annual leave rolls into sick leave balance Personal day Eligible for overtime at straight time Annual Leave Accrues at 4.0, 5.0, or 6.0 hours per pay, depending on years of service Maximum payout – 240 annual leave hours after 6 months of employment Year End rollover – in excess of 240 annual leave rolls into sick leave balance Personal day Eligible for overtime at time and 1/2

Dual Compensation/Secondary Jobs Non-exempt employees performing a secondary job at FGCU must report all hours worked on their timesheet. Hours worked from a secondary job could result in overtime.

After Hours Electronic Access Checking work email and responding to work related texts after hours is considered compensable hours worked. Non-exempt employees must be paid for accessing email and responding to texts, regardless as to whether it is from a supervisor, co-worker, or student.

Lunch Breaks Non-exempts employees should have an “interruption free” lunch away from their work station.

Work Distribution & Assignments Managers must ensure work is evenly distributed and that employees are able to complete their work within 40 hours per week. When additional hours are required, employees inform their supervisor. The supervisor must authorize any overtime before it is worked, including electronic access. Flexibility may be required during peak times.

Travel The Office of the General Counsel is drafting a policy detailing compensable time during work-related travel.

Questions