1. Changes to the Fair Labor Standards Act
Employee Information
UCF Human Resources
November 2016

2. Why are we here?
Let’s start with this video from the Department of Labor that explains the new ruling on overtime pay.
1975 – 62% of the workforce was eligible for overtime
Today – 8% of the workforce is eligible for overtime

3. Today’s Agenda Overview of the Fair Labor Standards Act (FLSA)
What is Changing?
What Does This Mean to Me?
What Will Not Change?
What Else Do I Need to Know?
Now that we have a better understanding of why we are here today, these are the specific topics we will be discussing.
The FLSA covers a variety of wage and hour issues, not just overtime eligibility.
However, the new provision specifically addresses changes in regard to overtime requirements. Today we will concentrate specifically on the new salary threshold provision of FLSA.
We will learn about the changes you need to know about becoming non-exempt.
We will discuss what will NOT change.
And other important items that you need to know.

4. Overview of the Fair Labor Standards Act (FLSA)

5. Overview of the Fair Labor Standards Act (FLSA)
First enacted in 1938, FLSA is a Federal Wage and Hour law that provides employees with wage and hour protections. FLSA establishes minimum wage, overtime pay, child labor standards, and recordkeeping requirements affecting both full and part-time workers.
(Cover bullets) Although FLSA covers a variety of wage and hour issues, the new provision specifically addresses changes in regard to overtime eligibility.

6. “Exempt” vs. “Non-Exempt”
An “exempt” position is not eligible for overtime pay.
A “non-exempt” position is eligible and must receive overtime pay for any hours worked above 40 hours in one work week.

7. Determining Exemption Status
FLSA is comprised of three tests that determine if an employee is eligible (non-exempt) or exempt from overtime pay:
Duties Test
Salary Basis Test
Salary Level Test
In order to be eligible for overtime, the employee must be performing duties that meet specific criteria. This is sometimes referred to as “white collar” duties.
The employee must be paid on a salary, not hourly basis, and
The employee’s salary must meet a certain minimum requirement.

8. 12/18/2017
Duties Test
The employee’s job duties must primarily involve executive, administrative, professional, computer or outside sales duties (also known as “white collar” exemptions).

9. 12/18/2017
Salary Basis Test
The employee must receive a predetermined, fixed salary that is not subject to reduction due to variations in quality or quantity of work performed.
(Cover the slide)
In other words, the employee’s salary doesn’t fluctuate from week to week based on their productivity or hours worked.

10. 12/18/2017
Salary Level Test
The employee must be paid a minimum salary as determined by the FLSA.

11. What is changing?

12. Salary Level Increases
Automatic Updates
The salary thresholds for overtime eligibility have increased and automatic reviews of the salary threshold have been put in place.
There are no changes to either the duties or salary basis tests.

13. Salary Level Increases
The current salary level for overtime eligibility was set in at $455 per week ($23,660 per year).
As of December 1, 2016 the new FLSA salary threshold has been set at $913 per week ($47,476 per year).
Since all Florida Universities (including UCF) use 26.1 pay periods – the threshold is actually $47, per year. The law is based on the weekly amount of $913. It is annualized for simplicity.
(Read bullets)

14. Automatic Updates
The salary threshold will now be reviewed and adjusted every 3 years beginning January 1, 2020.
The salary standard is equal to the 40th percentile of weekly earnings of full time salaried worker in the lowest wage Census Region.
The Department of Labor will publish updated rates at least 150 days before the effective date.
Up until now, the salary threshold requirement has not had any automatic adjustments.
The lowest wage Census Region is currently the South
Up until now, the salary threshold requirements has not had any automatic adjustments. In fact, the threshold has not changed since 2004.
Because of the 3 year review cycle, employees could theoretically move from exempt to non-exempt, back to exempt, and so on as raises are earned and the threshold is updated.

15. What Does This Mean to Me?
So, what does this raising the salary threshold really mean to me?

16. Overtime Pay!
Being non-exempt means you are directly compensated for all hours worked.
You will be compensated at one-and-one-half times your normal rate of pay for all hours worked over 40 hours in one work week.
Effective November 18, 2016 you will be eligible for overtime pay. Being non-exempt means you are directly compensated for all hours worked.

17. USPS Exempt to non-exempt effective 11/18/2016
Leave and Overtime
USPS Exempt to non-exempt effective 11/18/2016
Grandfathered group
6.77 to 6.00 annual leave hours (new)
Maximum payout annual leave hours
Year End Rollover – in excess of 352 annual leave hours rolls into sick leave balance
Personal Holiday (new)
Bereavement Leave (new)
Eligible for overtime pay (new)
New hires (current structure)
4.00, 5.00 or 6.00 hours annual leave hours based on years of service
Maximum payout annual leave hours
Year End Rollover – in excess of 240 annual leave hours rolls into sick leave balance
Personal Holiday
Bereavement Leave
Eligible for overtime pay
With feedback from VPs and approvals from Millican Hall, the structure of leave accruals has changed. As you can see on the screen, current USPS Exempt employees moving to a non-exempt category will see a decrease in their annual leave accrual from 6.77 hours biweekly to 6.00 hours biweekly. You will now be eligible for one Personal Holiday a year, and bereavement leave. The reason for the reduction in leave accruals is due to the fact that you are now eligible for overtime pay. You will keep you annual leave maximum payout and rollover based on 352 hours.

18. Leave and Overtime Continued
A&P Exempt to non-exempt effective 11/18/2016
Grandfathered group
6.77 to 6.00 annual leave hours (new)
Maximum payout annual leave hours
Year End Rollover – in excess of 352 annual leave hours rolls into sick leave balance
Personal Holiday (new)
Bereavement Leave (new)
Eligible for overtime pay (new)
New hires (new structure)
6.00 hours annual leave hours Maximum payout annual leave hours
Year End Rollover – in excess of 352 annual leave hours rolls into sick leave balance
Personal Holiday
Bereavement Leave
Eligible for overtime pay
This slide is for the A&P employees who are going from Exempt to Non-exempt. You will see a decrease in your annual leave accrual from 6.77 hours biweekly to 6.00 hours biweekly. You will now be eligible for one Personal Holiday a year, and bereavement leave. Again, the reason for the reduction in leave accruals is due to the fact that you are now eligible for overtime pay. You will also keep your annual leave maximum payout and rollover based on 352 hours.

19. Time Reporting Changes
Non-exempt employees document in and out times on a Timesheet.
The way you report your hours worked will change. Here, I will pass the presentation over to Isha.

20. Timesheets and LAPERs
BIG CHANGE: Tracking in and out times on a Timesheet
- Reference Guide
blank Excel timesheet
New time reporting codes on the LAPERs
Let’s see some samples! 
The Fair Labor Standards Act requires that employers maintain accurate time reporting records for non-exempt employees. The tracking of “actual” in and out times will help us determine your eligibility for overtime pay. UCF chooses to use a Timesheet for this purpose and you will be required to submit one each pay period. Please be sure that you are not simply putting 8 to 5 on this document, that is considered a “schedule” – please document actual in and out times the best that you can.
On this slide, there is a link that will be updated to provide you with a quick reference guide on the proper way to complete a Timesheet. Most likely your department’s payroll processor will provide you with a timesheet for completion, or you will download the Microsoft Excel version from the HR website. They will inform you of the internal processing deadlines to get your Timesheet to your supervisor for signature – it is up to your supervisor to turn in the Timesheet to your departmental payroll processor – this process should be similar to how your LAPER is processed. The LAPER will have different Time Reporting Codes on it now that you are eligible for overtime pay.

21. Sample – Normal Schedule
This sample shows an employee who worked 32 hours in both Week 1 and Week 2, in which both workweeks contained an 8 hour holiday. The sum for each workweek was 40 hours. This would be considered a “normal” pay period – no overtime and no leave usage to report.
The total paycheck will represent 80 hours of pay.

22. Sample – Excess of 40 not worked
In this sample, we have an employee who worked 40 hours during Week 1, plus there was an 8 hour holiday. That totals 48 hours. But because the employee did not “physically” work more than 40 hours during the workweek, they are only eligible for straight time pay. The department payroll processor will use the Time Reporting Code EXC in the payroll system to ensure that this employee is paid for 48 hours for Week 1.
Week 2 represents 32 hours worked, plus an 8 hour holiday, for 40 hours of pay for that workweek. No special processing required.
The total paycheck will represent 88 hours of pay.
Excess hours due to holiday should be reported as EXC = 8

23. Sample – Overtime Pay
In this sample, we have an employee who worked 42 hours during Week 1, plus there was an 8 hour holiday. That totals 50 hours. Because the employee “physically” worked 2 hours over 40 hours during the workweek, they are eligible for 2 hours of overtime pay, as well as 8 hours of EXC straight time pay. The department payroll processor will use the appropriate Time Reporting Codes in the payroll system to ensure that this employee is paid for 50 hours for Week 1.
Week 2 represents 32 hours worked, plus an 8 hour holiday, for 40 hours of pay for that workweek. No special processing required.
The total paycheck will represent 90 hours of pay.
Excess hours due to holiday should be reported as EXC = 8

24. Sample – Leave Usage
In this sample, we have an employee who worked 24 hours during Week 1, plus there was an 8 hour holiday. That totals 32 hours. Because the employee did not work 40 hours during the workweek, they need to use enough accrued leave to bring their total up to 40, which means 8 hours of personal leave (annual or sick) should be documented and deducted. The department payroll processor will use the appropriate Time Reporting Codes in the payroll system to deduct the hours.
Week 2 represents 32 hours worked, plus an 8 hour holiday, for 40 hours of pay for that workweek. No special processing required.
The total paycheck will represent 80 hours of pay.

25. Breaks
Lunch Break
Nonexempt personnel must be afforded an interval of at least thirty (30) minutes for a lunch period and shall not be employed, permitted, or suffered to work for more than five (5) hours continuously without that lunch period. Supervisors determine the scheduling of the lunch breaks for their employees which may normally vary from thirty (30) minutes to one (1) hour within a normal eight (8) hour shift. Employees do not receive pay (non-compensable) for the lunch break.
Certified law enforcement personnel, nurses, identified Facilities and Safety personnel and other identified positions designated as non-exempt, due to the nature of the work, may be excluded from the university business practice regarding a lunch break.
Work Breaks 
Non-exempt employees may be allowed up to 15 minutes as a paid break (compensable) from work during the first half of their workday, and again during the second half of their workday. Work breaks cannot be accumulated to extend a lunch period, nor can they be used to compensate for late arrival or early departure from duty. The request to take a work break should not be unreasonably denied. These breaks are scheduled by the employee’s supervisor.
OPS hourly employees who work a standard schedule of 40 hours per week, may be afforded paid breaks in accordance with the above outlined rules.
As a non-exempt employee, you are entitled to and required to take an unpaid meal break of at least 30 minutes. Please work with your supervisor to determine your scheduled lunch break time, as it is important that each department have appropriate staffing. During your break, you should not be interrupted with work-related tasks, for this reason, it is advised that you leave your workstation for your lunch break. As mentioned, these breaks are unpaid and SHOULD be documented on your timesheet.
Non-exempt employees are eligible for work breaks, however, these are not required. Again, please work with your supervisor to determine if formally scheduled work breaks are something to be considered for your particular schedule. These work breaks are paid time (and should NOT be documented on your timesheet). Work breaks should not be used to arrive late or depart early from a work shift, nor should they be used to extend the lunch break.

26. On-call and call-back
Non-exempt employees are eligible for this type of payment if they have been instructed to remain available to work during an off-duty period.
Form and procedure can be found here:
Basics:
$1/hr Monday through Friday
¼ of the actual hourly rate of the employee on Saturday, Sunday or holiday or paid leave days
¼ of the hourly rate for the base rate classification on Saturday, Sunday or holiday (PBA)
Credit with a minimum of 2 hours for both on-call and call-back
At UCF, on-call and call-back pay is offered to non-exempt employees. This type of payment is more prevalent in the areas of Computer Services & Telecommunications, Facilities and Safety, the Police Department, and may not be relevant to the department you work in. But please be aware that if your supervisor asks you to remain available or return to work during an off-duty period, you are eligible for on-call and/or call-back pay. There is a form on the HR website that you should complete and turn in to the payroll processor in your department so that it can be processed with your Timesheet. The amount of pay depends on a few different factors, such as your employee classification, the day of the week, and the number of hours.

27. Travel time https://hr.ucf.edu/files/TrainingTravelTimePay.pdf
Column headings are now simply Non-exempt and Exempt
Removed Overtime Compensatory Hours as an option (should be Overtime Pay)
On the HR website there is a Training and Travel Pay document. It has been updated to remove employee classifications of USPS, A&P, etc. and now simply refers to either ”Non-exempt” or “Exempt” employees. Please notice that travel time is counted as hours worked for you as a non-exempt employee, that would mean overtime pay if the hours you worked and traveled exceed 40 for the workweek.

28. Dual Compensation
Non-exempt employees performing a secondary job at UCF must report all hours worked on their timesheet. Hours worked from a secondary job could result in overtime.
Although this probably does not apply to you, as only 25 employees were identified in this category, the Dual Comp Form is not an option for non-exempt employees who work a secondary job. Instead all hours worked for both the primary and secondary job will need to be documented on the Timesheet.
And now I’ll pass it back over to Compensation.

29. What Will Not Change?

30. What is not changing? Base rate of pay Job Title
Benefits including FRS and medical coverage.
(Read bullets)

31. What Else Do I Need to Know?
There are a few items you need to know about being a non-exempt employee.

32. No more working after-hours without pay.
Checking your work and returning work-related texts is considered working!
Consult with your supervisor to come to an understanding of after-hour electronic access requirements of your position.

33. Overtime must be approved.
All overtime must be approved by your supervisor before it is worked.
Working unapproved overtime may subject you to disciplinary action.
You should always be paid for all hours worked, but working unapproved overtime may subject you to disciplinary action.
However, let’s say that you DID work without pre-approval, those hours must be reported on your official timesheet and you should still be compensated for the hours. Please do not keep any separate tracking logs and try to use the hours as comp time to take off at a later time – and do not let anyone tell you that it is acceptable solution. As stated before, all of your hours worked should be tracked on your official timesheet.

34. Can I Opt out of the change?
Because the FLSA is a federal law, this change to non- exempt status is mandatory and an employee cannot “opt out” of non-exemption.

35. Additional Resources

36. US Department of Labor
Link to Department of Labor Video
UCF Timesheet Quick Reference
UCF Training and Travel Pay Guidelines
UCF On-Call and Call Back Policy
UCF Overtime Policies
UCF Related Regulations

37. Questions?