The Fair Labor Standards Act (FLSA) Employment Services

Training Outline What is FLSA? What is FLSA? Who does FLSA apply to? Who does FLSA apply to? How is overtime eligibility determined? How is overtime eligibility determined? When can a position be exempt from overtime? When can a position be exempt from overtime? When, where and how is overtime calculated and paid? When, where and how is overtime calculated and paid? What records do I need? What records do I need? Who does what? Who does what? Will I remember all this? Will I remember all this?

What is FLSA? Fair Labor Standards Act (FLSA) est.1938 governs many areas. Those areas most important to us may be: Minimum wage Minimum wage Colorado: $7.28 per hour effective 1/1/09 Colorado: $7.28 per hour effective 1/1/09 Federal: $7.25 per hour effective 7/24/09 Federal: $7.25 per hour effective 7/24/09 Exemption Criteria Exemption Criteria Overtime (OTM) Pay Overtime (OTM) Pay Record keeping requirements Record keeping requirements

Who does FLSA apply to? Employment relationship between an “employer” and an “employee”, including: Employment relationship between an “employer” and an “employee”, including: Classified employees Classified employees Exempt-Professional employees Exempt-Professional employees Faculty and Research employees Faculty and Research employees Student employees Student employees Temporary employees Temporary employees All employees are “covered”, but some may be exempt from OTM or minimum wage requirements All employees are “covered”, but some may be exempt from OTM or minimum wage requirements

Definitions FLSA: Exempt = NOT eligible for overtime Exempt = NOT eligible for overtime Not entitled to additional compensation for hours worked over 40 in a work week Not entitled to additional compensation for hours worked over 40 in a work week Non-Exempt = ELIGIBLE for overtime Non-Exempt = ELIGIBLE for overtime MUST be compensated (in salary or time off) at the rate of time-and-a-half for all hours worked over 40 in a work week MUST be compensated (in salary or time off) at the rate of time-and-a-half for all hours worked over 40 in a work week Colorado State Personnel System: Exempt = Not classified, i.e., exempt from the state personnel system Exempt = Not classified, i.e., exempt from the state personnel system (exempt-professional employees) (exempt-professional employees)

How is overtime eligibility determined? Classified Staff Classified Staff Employment Services designates overtime status of each position. Usually will be documented on classification decision notice. Employment Services designates overtime status of each position. Usually will be documented on classification decision notice. Officer & Exempt Professional Staff Officer & Exempt Professional Staff Overtime status reviewed and determined by Employment Services at time position is created based on duties of job Overtime status reviewed and determined by Employment Services at time position is created based on duties of job Faculty Faculty Typically exempt from OT Typically exempt from OT Student Employees Student Employees Typically eligible for OT Typically eligible for OT

When can a position be exempt from overtime? Salary Basis Salary Basis must be paid on a salaried basis, not hourly (except for teachers, doctors, lawyers, and computer professionals currently paid at least $27.63/hr) must be paid on a salaried basis, not hourly (except for teachers, doctors, lawyers, and computer professionals currently paid at least $27.63/hr) Minimum Salary Threshold Minimum Salary Threshold Currently must be paid a minimum of $455 per week or $23,660 per year (except for teachers, doctors, and lawyers) Currently must be paid a minimum of $455 per week or $23,660 per year (except for teachers, doctors, and lawyers) Job Duties Test Job Duties Test must also be assigned job responsibilities that fall into one of the categories for exemption must also be assigned job responsibilities that fall into one of the categories for exemption

Exemption Categories Executive Executive Administrative – regular and academic Administrative – regular and academic Professional Professional Learned Professional – doctors, lawyers, teachers Learned Professional – doctors, lawyers, teachers Creative Professional – artists, musicians, creative writers Creative Professional – artists, musicians, creative writers Computer Employee Computer Employee Outside Salesperson Outside Salesperson Highly Compensated Highly Compensated Employee makes more than $100,000 per year and meets other exemption criteria Employee makes more than $100,000 per year and meets other exemption criteria

Exempt Positions NOT eligible for OT due to salary and level of responsibilities NOT eligible for OT due to salary and level of responsibilities May be required to complete time records and must track use of leave May be required to complete time records and must track use of leave Appointing authority can schedule work hours Appointing authority can schedule work hours Full-time public employees expected to work minimum 40 hours a week Full-time public employees expected to work minimum 40 hours a week Administrative leave or incentive awards may be used to compensate extraordinary efforts but not tied to hours worked Administrative leave or incentive awards may be used to compensate extraordinary efforts but not tied to hours worked

When is overtime paid? Overtime is paid when more than 40 hours are worked in a work week Overtime is paid when more than 40 hours are worked in a work week Standard CU Workweek = Standard CU Workweek = Sunday 12:01 a.m. through Saturday midnight Sunday 12:01 a.m. through Saturday midnight

How is overtime compensated? 1 ½ times the regular rate of pay for all hours worked over 40 in a work week 1 ½ times the regular rate of pay for all hours worked over 40 in a work week Paid as salary or compensatory time off in lieu of cash if agreement has been signed Paid as salary or compensatory time off in lieu of cash if agreement has been signed

Additional Comp Time info Comp Time Agreement Comp Time Agreement Should be condition of hire in offer letter or overtime policy Should be condition of hire in offer letter or overtime policy Comp time is NOT leave, but a form of compensation Comp time is NOT leave, but a form of compensation Must be scheduled as soon as practical Must be scheduled as soon as practical Comp time balance is paid out upon transfer or termination or when balance exceeds 240 hours Comp time balance is paid out upon transfer or termination or when balance exceeds 240 hours

Where is overtime paid? Overtime in HRMS Time Collection: Overtime in HRMS Time Collection: Enter total number of hours worked in excess of 40 hrs/wk using appropriate earnings code: Enter total number of hours worked in excess of 40 hrs/wk using appropriate earnings code: OTM – Overtime OTM – Overtime SOT – Student Overtime SOT – Student Overtime HRMS will calculate the 1 ½ rate HRMS will calculate the 1 ½ rate Example: Example: Larry works 4 hrs overtime Larry works 4 hrs overtime PPL enters 4 hrs OTM or SOT in Time Collection PPL enters 4 hrs OTM or SOT in Time Collection Larry will receive 6 hrs extra pay, which is equivalent to 4 hours at 1 ½ times his hourly rate Larry will receive 6 hrs extra pay, which is equivalent to 4 hours at 1 ½ times his hourly rate

Where is overtime paid? Comp Time: Comp Time: Comp time earned and taken is typically tracked outside of HRMS, possibly on the employee’s work record Comp time earned and taken is typically tracked outside of HRMS, possibly on the employee’s work record Dept work records are the official record for comp time balances Dept work records are the official record for comp time balances Comp time taken may be recorded in HRMS: Comp time taken may be recorded in HRMS: Use earnings code CMP Use earnings code CMP

How is it calculated? Hours worked for purposes of OT do not include: Hours worked for purposes of OT do not include: holidays, vacation, sick or admin leave (except for essential services positions), or comp time taken holidays, vacation, sick or admin leave (except for essential services positions), or comp time taken

How is it calculated? Work hours can not be averaged across more than one week. For example: Work hours can not be averaged across more than one week. For example: Work hours can not be averaged at the end of the month Work hours can not be averaged at the end of the month Hours worked in excess of the regular schedule in one week cannot be used for time off in any other week Hours worked in excess of the regular schedule in one week cannot be used for time off in any other week

How is it calculated? Overtime is calculated on a weekly basis Overtime is calculated on a weekly basis Overtime does not accrue when an employee works beyond his/her regular daily schedule Overtime does not accrue when an employee works beyond his/her regular daily schedule

Overtime Examples SundayMondayTuesdayWedThursdayFridaySaturday SundayMondayTuesdayWedThursdayFridaySaturday SundayMondayTuesdayWedThursdayFridaySaturday Holiday hours worked. No overtime accrued for this work week. 44 hours worked. 4 hours at 1 ½ rate = 6 hours extra pay or comp time. 36 hours worked. No overtime accrued for this work week for non-essential services employees. Week 1 Week 2 Week 3

Essential Services and Overtime Essential positions support services directly responsible for health, safety, and welfare of patients, residents, or students Essential positions support services directly responsible for health, safety, and welfare of patients, residents, or students Typically designated by Vice Chancellor Typically designated by Vice Chancellor Department should note on special requirements page of PDQ Department should note on special requirements page of PDQ Per State Personnel Rules, paid leave counts as work time when calculating overtime for essential employees Per State Personnel Rules, paid leave counts as work time when calculating overtime for essential employees

Can Overtime be waived? NO! Once overtime has been worked (whether approved or not), it must be compensated Once overtime has been worked (whether approved or not), it must be compensated Unauthorized overtime may be cause for corrective action Unauthorized overtime may be cause for corrective action Communication is key Communication is key Departments should have procedures in place for requesting overtime & approval requirements Departments should have procedures in place for requesting overtime & approval requirements Preferred method is to use comp time in lieu of cash Preferred method is to use comp time in lieu of cash

What records do I need? Time/work records shall be kept for both exempt and non-exempt employees Time/work records shall be kept for both exempt and non-exempt employees Both employee and supervisor must verify and sign work records Both employee and supervisor must verify and sign work records Departments may select work records they wish to use (see PBS website for suggested forms) Departments may select work records they wish to use (see PBS website for suggested forms) Records should be kept for minimum of 5 years (7 years or more for positions funded from grants) Records should be kept for minimum of 5 years (7 years or more for positions funded from grants)

Who does what? HR’s Role 1) Designate overtime status for positions 2) Advise departments on developing overtime/comp time policies 3) Assist with questions from employers and employees regarding overtime compensation

Who does what? Department’s Responsibilities 1) Know who is eligible for overtime 2) Ensure employees know and understand OT policy and expectations 3) Do not allow employees to work extra hours without appropriate compensation 4) Ensure both supervisor and employee agree and sign work record each month 5) Ensure hours worked are documented and accounted for on a work record/time sheet

Will I ever remember all this? Additional Resources Employment Services Employment Services (main office) (main office) sa.aspx sa.aspx sa.aspx sa.aspx PBS Procedures Guide: PBS Procedures Guide: de/ de/ de/ de/ Employee Work Record forms: Employee Work Record forms: Record Retention Checklist: Record Retention Checklist: pay-records.html pay-records.html pay-records.html pay-records.html