FLSA Changes and Implications Manager/Employee Forum October 24, 2016

FLSA Changes and Implications to Exempt Status The Fair Labor Standards Act (FLSA) exempt salary threshold will be raised to $913/week or $47,476 annually effective December 1, 2016. Weekly amount governs for positions less than 12 months Threshold tied to annual COLA adjustment every 3 years A non-exempt employee is one who is not exempt from overtime pay and is entitled to compensatory time or overtime pay. Compensatory time and overtime pay rate is earned at 1.5x the working rate. Comp time/Overtime pay is incurred after working 40 hours in a workweek.

FLSA Changes and Implications to Exempt Status An employee can be exempted from overtime if they meet certain salary and/or duties requirements. Not all employees who meet the threshold are exempt. Not all employees who don’t meet threshold are non-exempt. Academic Administrative Employees Exemption Academic counselors, advisors, and intervention specialists who must be available to respond to student academic issues. This includes those responsible for administering testing, assisting with academic problems, and advising regarding degree requirements. Teaching exemption for teachers and some coaching positions

FLSA Changes and Implications to Exempt Status When two or more employees share same/similar position and salaries fall above and below threshold, NMU departments have typically opted for all employees to become non-exempt. NMU implementation date is November 20, 2016.

Pay for Hours Worked: What IS and ISN’T Included? Worked Hours - Included All time spent by an employee performing an activity for NMU or under the control and direction of NMU are considered hours of work. Hours worked over 40 in workweek (overtime) MUST be approved in advance whenever possible. Time spent in training during regular working hours is considered hours of work. Pre-and Post-Shift Activities closely related to an employee's regular duties that are indispensable to their performance are considered hours of work.

Pay for Hours Worked: What IS and ISN’T included? Incidental de minimus Time - Excluded Activities such as checking e-mail or voicemail outside normal operating hours do not have to be paid IF they occur only sporadically and the time involved is truly de minimus For example, if the employee occasionally types out “Thanks” or “OK” in response to a short message. If managers expect employees to check and respond to email outside of standard work hours, this time is considered work time. Supervisors have the right to limit amount of time spent completing work-related activities outside of work hours. Supervisors should discuss expectations with employees regarding activities completed before or after standard work hours.

Pay for Hours Worked: What IS and ISN’T included? Travel - Included Time spent traveling, approved by the supervisor and on behalf of NMU, is considered hours of work if: Travel is during normal work hours, Work is performed while traveling, or Employee is traveling in a private car (as driver or passenger) during travel. Travel – Excluded Time spent traveling is NOT considered hours of work if: Commuting Employee is considered a “passive traveler” Employee is not working (on a plane/bus/train) and Travel hours occur outside normal work hours. If an employee chooses an alternate travel route for personal reasons The employee will only be credited hours worked for the portion of the actual or estimated travel time.

Key Takeaways Supervisors and employees should discuss expectations regarding work hours, overtime approval, and working outside of standard work hours. Non-exempt employees must have approval from supervisor before working beyond normally scheduled work hours. Employees must keep accurate records of time worked. Web Time used to note comp time (overtime hours worked x 1.5) or actual overtime hours if worked more than 40 hours in a work week. Example: If an employee works 42 hours in one week, he/she enters 3 hours on comp time line (1.5 x 2 hours) OR 2 hours on overtime line.

Key Takeaways Flexing schedules can be used to maintain a 40 hour work week. Example: If travel is scheduled that will extend an employee’s workweek beyond 40 hours, work schedules may be altered another day to maintain the 40 hour workweek. Employees and supervisors should discuss in advance. Compensatory time/overtime are incurred after 40 hours of work in a week. Hours cannot flex across workweeks – even if it is within the same pay period.

Key Takeaways Communication is key. Employees and supervisors should work together to establish work schedules and determine how to complete and prioritize tasks as needed. Tracking hours worked during travel can be complicated. Contact HR to discuss how hours should be tracked/paid if necessary.

Resources HR Website – FLSA resources located under Employment Tab http://www.nmu.edu/hr/fair-labor-standards-act-flsa-update HR Contacts Julane Cappo x1493 Renee Sheen x2331 Rhea Dever x2333