1. CHANGES TO DETERMINING EXEMPT EMPLOYEE STATUS Let us handle that! 1

2. Changes to Determining Exempt Status 2 The Department of Labor has released changes to the salary threshold for determining exempt status of an employee. The duty test is unchanged. Under the new rules, any employee making a gross pay less than $913 per week (equal to $47,476 per year) cannot have Exempt status. This is an increase from $455 per week ($23,660 per year). This figure is equal to the 40th percentile of weekly earnings for full-time salaried workers in the lowest-wage Census region, currently the South. The Department of Labor will re-calculate the salary threshold every three years using that metric, and will release the proposals in early August of the year before changes take effect. In addition, employers can now include nondiscretionary bonuses and incentive payments (including commissions) as up to 10% of the salary. These changes are effective December 1, 2016 and more information is available on the Department of Labor website.Department of Labor website

3. Options for Dealing with the Changes 3 You have several options for how to handle employees affected by this change. Any option except the first will require you to begin tracking hours for these employees, if you do not already. FLSA does not require non-exempt employees to be paid on an hourly rate or that they use a timeclock for hour tracking. Salary pay and timesheets are acceptable, as long as overtime is paid as needed. 1.Your first option is to raise the pay of affected employees to over the threshold of $913 per week. Under the new rules, you may count nondiscretionary bonuses and incentive payments (including commissions) as up to 10% of the salary. 2.The simplest option is to begin tracking hours for these employees, if you do not already, and limiting them to no more than 40 hours per week. We recommend you still set up OT codes for these employees in order to track overtime if overtime is permitted. If you prefer not to change pay rates, and anticipate that these employees will continue to have overtime, then changes will need to be made on GreenshadesOnline.com.

4. Retaining Salary Pay 4 Changes needed within GreenshadesOnline.com depend on whether the affected employees currently track their hours. If you need assistance with any of the following, please contact Greenshades Support at Support@Greenshades.com or (888) 255-3815, extension 1.Support@Greenshades.com If your employees are already submitting timesheets and using a salary code that you wish to continue using, then only a few changes are needed. 1.You will need to create a new pay code in your accounting package for their overtime pay (and doubletime, if applicable). 2.Create a new time code on GreenshadesOnline.com for the new pay code(s). 3.Edit the existing time code by enabling the “Counts toward Over/Doubletime” option and selecting the time code(s) you just created. 4.Finally add that time code to your pay group. Please note that we do not currently support syncing hours on salary time codes to the accounting package, but we will have that feature released before December 1.

5. Converting to Hourly Pay 5 Alternatively, you can convert the affected employees to hourly pay. 1.You can either re-purpose the existing pay group (if all employees within it are affected) or you can elect to create a new one. 2.In either case, you will need to create new pay codes in your accounting package, for the hourly entries, overtime, and doubletime (if applicable). 3.Then create a new time code or edit an existing one for the hourly entries, and create a new time code for the overtime and doubletime (if applicable). Ensure that the hourly code is set to “Counts towards Over/Doubletime” with the new OT code selected. 4.Lastly, create a new pay group for these employees. Make sure that you have Track by Time Codes enabled. You’ll need to also enable whatever entry methods you would like these employees to use, such as time clock and manual entry.

6. Beginning to Track Hours 6 If the affected employee are not currently tracking hours, then you must create a pay group and associated codes. These employees may be paid salaried or hourly. 1.You will first need to create new pay codes in your accounting package, for the hourly or salary time entries, overtime, and doubletime (if applicable). 2.Then create a new time code for the hourly or salary time entries, and create a new time code for the overtime and doubletime (if applicable). Ensure that the hourly code is set to “Counts towards Over/Doubletime” with the relevant OT code selected. 3.Lastly, create a new pay group for these employees. Make sure that you have Track by Time Codes enabled. You’ll need to also enable the entry method(s) you would like these employees to use, such as time clock and manual entry. Please note that we do not currently support syncing hours on salary time codes to the accounting package, but we will have that feature released before December 1.