Overview of FLSA Overtime Regulations and Upcoming Changes

Agenda FLSA Overview 2016 Final Rule Changes Who Is and Isn’t Impacted Overtime/Compensatory Time ‘Hours Worked’ Definition Payroll and Timecard Overview Employee Responsibilities Supervisor Responsibilities Additional Resources

FLSA Overview FLS What? Fair Labor Standards Act The Fair Labor Standards Act (FLSA) is a federal law first introduced in 1938 which is enforced by the Department of Labor (DOL) that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards for employees. Employees are to receive overtime pay (or compensatory time in the public sector) at 1.5 times the employee’s regular rate for hours worked over 40 in a workweek, except for those designated as exempt from overtime pay.

FLSA Overview Continued To qualify as exempt, an employee must satisfy all of the following three tests: Be paid on a salary (not hourly) basis, AND Job duties must meet the duties test for one or more of the exemption categories, AND Have a salary above the minimum salary threshold

FLSA Overview Continued ‘Duties Test’ exemption categories: Executive Involved in management of department, 2 or more FTE direct reports, possess ‘particular weight’ in hiring/firing decisions Administrative Non-manual work directly related to management of the operation, primary duty includes exercise of discretion and independent judgment with respect to matters of significance Academic Administrative is a special subset of this exemption Professional Learned Professional Work requiring advanced knowledge that is intellectual in nature in a field of science or learning that must be acquired by a prolonged course of specialized intellectual instruction Creative Professional Work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor Teachers, doctors and lawyers are exempt and the salary threshold does not apply Computer Employee Programmers, System Analysts, Software Engineer or similar Outside Sales Does not apply at UNI For more information, see https://www.dol.gov/whd/overtime/fs17a_overview.htm

2016 Final Rule Changes On May 23, 2016 the DOL published a Final Rule that increases the minimum salary threshold. The duties test remains unchanged. The Final Rule must be implemented no later than December 1, 2016. Current salary threshold: $455 per week ($23,660 annually) New salary threshold: $913 per week ($47,476 annually)

2016 Final Rule Changes Continued The salary threshold is not prorated for positions which are less than 40 hours/week For less than 12 month appointments, the salary threshold must be at least $913 for each week that work is performed. 10 month employee works 182 days/year over 37 weeks - the salary threshold is $33,781 (37 x $913) If employee works 182 days/year over 40 weeks – the salary threshold is $36,520 (40 x $913)

2016 Final Rule Changes Continued Why? “Help build real, lasting economic security for more hardworking Americans.” -U.S Department of Labor

2016 Final Rule Changes Continued Changing an employee's status from exempt to non-exempt is not a demotion. It is simply a difference in timekeeping and overtime eligibility. The designation of exempt or non-exempt is a legal designation and does not impact the type or importance of an employee's work.

Who is Impacted Approximately 165 P&S employees Effective date of change to non-exempt 12 month appointments – ‘hourly paid salary’ effective 11/1/16 9, 10 or 11 month appointments – ‘hourly’ effective 11/20/16

Who Isn’t Impacted Merit - already non-exempt Faculty and instructional academic staff whose primary duties are teaching are exempt regardless of salary. Teachers, lawyers, and doctors qualify for this professional exemption.

Overtime Pay/Compensatory Time 1.5 times the employee’s regular rate for hours worked over 40 in a workweek (Sunday – Saturday) Compensatory time may be accrued up to 80 hours at any time Compensatory time earned must be used by June 30 each year. Balances as of June 30 will be paid out on the July paycheck Also paid out if employee leaves UNI, transfers to another department, or moves to a FLSA exempt position Department has the discretion to designate payment of overtime in cash or compensatory time Just like vacation, use of compensatory time earned must be requested and approved by supervisor Exempt staff continue to not be eligible for overtime pay or compensatory time

‘Hours Worked’ Definition Only actual hours of work are used for the calculation of overtime. Record time in tenth of an hour increments. Amounts 2 minutes or less are considered ‘de minimus’ and do not need to be recorded. Paid absences such as vacation leave, sick leave, holiday, and compensatory time used are not “hours worked” for the purposes of calculating overtime and therefore will be paid at a straight time rate.

‘Hours Worked’ Continued Break and meal periods Meal periods of 30 minutes or more where no work is performed do not count as hours worked. Those less than 30 minutes or if spent performing work are hours worked. Attendance at various presentations, forums, committee meetings, etc. In order for them NOT to be considered hours worked, all of the following criteria must be met Occur outside of work hours or if during work hours, must be unrelated to/not required for their position or employment at UNI; Attendance is completely voluntary; Not conducting any work; and Activity not related to employee’s job

‘Hours Worked’ Continued Travel Time Travel during the workday Travel during an employee’s standard work day is considered hours worked. Travel outside of employee’s standard work day on corresponding hours of non-working days is also hours worked. During non-work hours, travel time may be considered hours worked as follows: Passenger - Travel time outside of regular working hours as a passenger on an airplane, train, bus or automobile is not considered hours worked. Driver - If the employee is driving a vehicle, all travel hours are hours worked regardless of when the travel occurs. Hours worked begins when the employee leaves home and ends when they arrive at the final destination. Work performed while traveling Any work that is performed while traveling is considered hours worked. This could include preparing for a meeting, reviewing business documents, making work-related phone calls, etc. See Travel Time Chart for more detailed assistance - https://www.uni.edu/hrs/sites/default/files/documents/flsa_travel_chart.pdf

Payroll and Timecard Overview Completion of weekly timecard instead of monthly Non-exempt employee: ‘Hourly Paid Salary’ - salary for current month with overtime and off duty in arrears OR ‘Hourly’ – all pay in arrears based on pay period calendar https://www.uni.edu/obo/payroll/dates Must submit in time for approvals to be paid timely Still paid on last working day of month

Payroll and Timecard Overview Continued Holiday week ‘hours worked’ example: Monday – 8 hours Tuesday – 8 hours Wednesday – 10 hours Thursday – 8 hours holiday Friday – 8 hours holiday The extra 2 hours on Wednesday is regular hours worked, not overtime, pursuant to UNI policy 4.15. If a non-exempt employee works on a university holiday, they should record the holiday hours in addition to hours they worked. Are there supervisors in the room that supervise Merit staff? If so, this is different for Merit due to the CBA.

Payroll and Timecard Overview Continued Timecards for ‘Hourly Paid Salary’ transition week (Oct. 30th – Nov. 5th) Complete October monthly exception timecard as normal Complete first weekly timecard for Nov. 1-5 only However, at any point that total ‘hours worked’ for entire week exceed 40, code overtime or compensatory time earned Please Note: First weekly timecard may not be available right on November 1 as programming changes are still being completed and PAF must be approved following programming changes before timecard is available.

Payroll and Timecard Overview Continued Set calendar reminders to update, submit & approve timecards each week!

Payroll and Timecard Overview Continued Timecard ‘Time-Out Schedule’ Tuesday, 12:00 PM Wednesday, 12:00 PM Wednesday, 5:00 PM Approved timecards processed by Payroll at 10 AM on Thursdays

Payroll and Timecard Overview Continued

Non-Exempt Employee Responsibilities Complete timecard weekly instead of monthly Record ALL hours worked; no working “off the clock” Receive approval to work hours above and beyond normal scheduled hours Receive approval to utilize compensatory time earned just as you would for vacation

Responsibilities of Supervisors of Non-Exempt Employees It is your responsibility to ensure non-exempt employees are recording all hours worked on timecard. If you see extra hours being worked, you must ensure they are recorded before approving timecard. If you have a limited budget and can’t absorb overtime pay or compensatory time payout costs, you will need to limit approvals on overtime hours, make adjustments within the workweek to keep hours worked at scheduled amount, and monitor compensatory time earned balances. Review and approve timecards thoroughly and timely

Additional Resources HRS Website DOL https://www.uni.edu/hrs/supervisors/flsa-changes FAQs Travel Time Compensability Chart DOL Hours Worked Fact Sheet https://www.dol.gov/whd/regs/compliance/whdfs22.htm

Questions?