1. Fair Labor Standards Act: Implementing Changes
Directors Meeting
November 16, 2016 – 9:45 am

2. Agenda What is the Fair Labor Standards Act (FLSA)?
Why are we here?
Exempt vs. Non-Exempt from overtime
New Rules & Key Provisions
What does this mean for FGCU?
Preparing for November 20 Implementation
What Managers Need to Know
Timekeeping & Hours Worked
Questions & Answers

3. Why are we here?

4. What is Changing on November 20?
Ruling issued May 18, 2016
Effective date December 1, 2016
Salary threshold: $913 per week, $47,658.60* annually
Set at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census region, currently the South
Automatic update of the salary threshold every three years
Beginning on January 1, 2020
*assumes 26.1 pay periods

5. FLSA Financial Impacts
Financial Impact of Wage & Hour Non-Compliance
Back pay for 2 years, or 3 years for willful non-compliance
Liquidated damages (back pay x 2) for willful non- compliance
Punitive damages for retaliatory conduct
Legal fess, costs, and interest
Penalties of up to $1,100 per employee

6. Does not meet requirements for exemption from overtime under FLSA
Salary Basis
Paid $913 per week
Job Duties
Primary duties of the position as they relate to the defined criteria for the exemption categories
Job Complexity
Discretion and independent judgment rather than daily, routine decisions with regard to matters of significance
Exemption
Meets additional criteria for Computer, Executive, Professional, or Administrative exemption
Exempt from Overtime
FLSA Exemption Assessment
YES
YES NO
Does not meet requirements for exemption from overtime under FLSA
Non-Exempt
Designation
YES
YES

7. Exemption Classification Process
HR is tasked with determining the exemption status of all staff positions in accordance with statutory provisions and established guidelines.
Faculty positions are exempt from FLSA overtime requirements
The position duties are exempt, not the employee
All staff positions are individually reviewed to determined FLSA overtime exemptions
A variety of actions may change a position’s exemption status:
Law
Position duties
Position FTE/Change in Appointment months
Other relevant factors/DOL Opinion Letters

8. What is NOT Changing on November 20?
Base Rate of Pay
Job Title
Benefits – including leave accrual & ORP

9. What does this mean for FGCU?
Campus-wide impact
Financial impact
Salary equity
Organizational/cultural changes
Changes to internal processes, structures, and systems
Perception of non-exempt positions
Tracking of hours worked
Change management
Communication
Training for employees and supervisors

10. Partnership for Implementation
HR has met with departments to devise the best overall implementation plan for the employees effected.
Balancing Act
Compliance
Best Practice
FGCU Culture
Compliance, Consistency, and Compassion

11. Conversations for Change What you need to know

12. Human Resources Oversight
Worked with divisions, colleges, and departments
Offered campus wide information sessions
Offer supervisor training in November and December
Reviewed all AP classifications where one employee is below $47,659
Specific job duties and salary must meet all of the requirements of FLSA to be exempt
Titles and supervision responsibilities alone do not determine exempt status
When the FLSA exemption status is questionable
THE DESIGNATION WILL BE NON-EXEMPT

13. Departmental Oversight
Conversations for Change with your Employees
Implement procedures and processes for tracking time worked
Timekeeping - Non-Exempt Timesheet
Train employees and supervisors on new expectations
Track all hours worked for non-exempt employees
Flexible options
Include paid leave and holidays in calculations
Accountability
Travel time
Increase supervisor oversight of work hours
Overtime must be approved
Compensatory time
Do not include exempt staff in tracking of worked hours

14. Conversations with Employees
This change in salary threshold does not require a change in job title or job duties. It is a nationwide shift that allows employees to be paid for the hours they work.
This is a federal initiative impacting employees across the country
This is not a demotion, it is a nationwide shift
Remind employees that the shift means they will be paid for the work they perform AND at a rate of time and ½, when hours worked exceeds 40 in one work week

15. Team Dynamics
Teams you work with may now have employees that will have to manage their time differently. It is important to be sensitive to this change. Meetings that go beyond the standard workday and requirements to work on deliverables or attend after hours functions may necessitate overtime. Even requiring non-exempt employees to monitor and respond to or text messages may trigger hours that are compensable time.

16. Optimizing Schedules
You should review the standard patterns of work that occur over a year, and forecast where there are peaks. Considering the right number of resources and supplementing and/or instituting flex schedules are some examples of adjustments you can make to minimize overtime hours. You may also need to prepare for a budget impact. When managing staff and approving alternate schedules, managers should remember that, in order to avoid overtime, changes to the work hours of hourly staff need to be managed within a single workweek (Sunday – Saturday). Paid Holidays and Leave are not considered time worked for calculating overtime eligibility.

17. Managing Time
Affected employees and their managers will need to manage and track their time more closely than before so employees can be paid for all the time they work. As managers it is incumbent upon you to ensure that your nonexempt employees are trained and comply with all timekeeping requirements. It is critical that managers ensure 100% timely compliance to time entry, tracking, and approvals.

18. Overtime Defined
Non-exempt positions must be paid for overtime hours at a rate of one and one-half times the hourly rate for all hours worked over 40 hours per week.
Hourly rate is calculated at:
Annual rate / 26.1 pays / 80 hours per pay period

19. Leave & Overtime – Exempt to Non-Exempt
Employees w/Grandfathered Status
New Hires
Annual Leave Accrues at hours per pay
Maximum payout annual leave hours
Year End rollover – in excess of 352 annual leave rolls into sick leave balance
Eligible for overtime (NEW)
Annual Leave Accrues at 4.0, 5.0, or 6.0 hours per pay, depending on years of service
Maximum payout – 240 annual leave hours after 6 months of employment
Year End rollover – in excess of 240 annual leave rolls into sick leave balance
Personal day
Eligible for overtime

20. Leave & Overtime – SP Exempt to SP Non-Exempt
Annual Leave Accrues at 4.0, 5.0, or 6.0 hours per pay, depending on years of service
Maximum payout – 240 annual leave hours after 6 months of employment
Year End rollover – in excess of 240 annual leave rolls into sick leave balance
Personal day
Eligible for overtime at straight time
Annual Leave Accrues at 4.0, 5.0, or 6.0 hours per pay, depending on years of service
Maximum payout – 240 annual leave hours after 6 months of employment
Year End rollover – in excess of 240 annual leave rolls into sick leave balance
Personal day
Eligible for overtime at time and 1/2

21. Dual Compensation/Secondary Jobs
Non-exempt employees performing a secondary job at FGCU must report all hours worked on their timesheet. Hours worked from a secondary job could result in overtime.

22. After Hours Electronic Access
Checking work and responding to work related texts after hours is considered compensable hours worked. Non-exempt employees must be paid for accessing and responding to texts, regardless as to whether it is from a supervisor, co-worker, or student.

23. Lunch Breaks
Non-exempts employees should have an “interruption free” lunch away from their work station.

24. Work Distribution & Assignments
Managers must ensure work is evenly distributed and that employees are able to complete their work within 40 hours per week. When additional hours are required, employees inform their supervisor. The supervisor must authorize any overtime before it is worked, including electronic access. Flexibility may be required during peak times.

25. Travel
The Office of the General Counsel is drafting a policy detailing compensable time during work-related travel.

26. Questions