1. Changes to the Fair Labor Standards Act
HR Liaison 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%
Today = 8%

3. Today’s Agenda Overview of the Fair Labor Standards Act (FLSA)
What is Changing?
ePAF Processing
Payroll Changes
Recruitment Process
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.
If the position fails even one of these 3 tests, the position is non-exempt.

8. 2/21/2018
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. 2/21/2018
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. 2/21/2018
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.
The lowest wage Census Region is currently the South.
Up until now, the salary threshold requirement has not had any automatic adjustments. In fact, it hasn’t 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.
These are the basic changes that are happening with the FLSA law. Now Abbee will discuss what you need to know with ePAF processing.
Hand over to Abbee

15. ePAF Processing

16. Line Employee New Hires
A&P Employees
FLSA Status will be indicated on employment agreements
USPS Employees
FLSA Status will be indicated on approved for hire for positions that are FLSA Exempt (i.e. USPS Exempt)

17. Line (Position) Employees: ePAF Changes
Under Employee Group, ePAF Originator will have the following options:
For Exempt A&P, you will select Exempt A&P
For Non-Exempt A&P, you will select Non-Exempt A&P

18. ePAF Selection: Non-Exempt A&P vs Exempt A&P

19. Position Information: Non-Exempt vs. Exempt A&P
Non-Exempt A&P Position
Exempt A&P Position
The only difference is that one job code has a “N” on the end and one does not.

20. Job Change ePAFs
In the event that an A&P Non-Exempt employee receives a “permanent” pay increase which brings their salary up to the threshold (47,658.60)
On the ePAF, ePAF Originator will change the employee group from Non-Exempt A&P to Exempt A&P
ePAF Originator will input the job code (without the N at the end), update position title, and Admin Code.
Proceed as normal with the ePAF.

21. Troubleshooting ePAF Errors
An ePAF Originators tries to input a Hire ePAF for an A&P Non-Exempt employee, but the position number turns red, why does that happen?
Check the previous page to verify that the Employee Group of Non-Exempt A&P was chosen.

22. USPS Employees
The procedure will stay the same for selecting the USPS Exempt or Non-Exempt status under the Pay Group.

23. Postdoctoral Associates
10/19/2016
Postdoctoral Associates
Post-Doctoral Associates are affected by the salary threshold. If they do not earn the $47,659 yr., the position will be considered non-exempt and eligible for overtime. The same applies to part-time Post-Doctoral Associates.
We are working with Academic Affairs and the Office of Research on a plan and communication. We will either pay overtime or raise to the new threshold. More to come.
47,659

24. Part-Time Employees
FLSA does not address part-time employment, therefore the minimum salary requirement cannot be prorated for FLSA compliance. It makes no difference in FLSA compliance standards if a 0.75 FTE earns $800 per week.

25. OPS Population Hourly Students and Hourly Non-Students
OPS Contracted Student Employees
GRAs, GTAs, and GAs
Residential Assistants
GRAs, GTAs, and Residential Assistants are exempt from the Salary threshold.

26. OPS Population Adjuncts (OPS Contract Non-Students) Teaching Adjuncts
Research Adjuncts
Other Adjuncts
Teaching Adjuncts are exempt from the salary threshold.

27. OPS Hourly Employees
No change to ePAF processing for OPS hourly student and hourly non-student employees
Human Resources is revising the OPS hourly non-student job codes.
Removing the USPS Job Codes for OPS hourly non-student population.

28. New OPS Hourly Non-Student Job Codes
If you go into the ePAF system now, you will see the new hourly non-student job codes. If you have a business need for specific titles, please contact me so we can discuss. The next step is to change those OPS individuals who have USPS job codes to the new OPS job codes. That will be done systematically so no ePAFs needed.

29. OPS Contracted-Student Employees
Graduate Assistantships
GRAs, GTAs, GAs
ePAF process remains the same.
Resident Assistants

30. Adjuncts
In order to be placed on an adjunct agreement as of 11/18/2016, the following criteria must be met:
Primary duty is teaching OR
Employee is performing exempt job duties AND earning at least $1,826/biweekly.
Team will be checking adjunct agreements for courses indicated to verify teaching or earn at least $1,826 or greater to be exempt. If they do not meet either criteria, need to be hired as OPS hourly non-student. Why can they no longer be on contract because they are considered non-exempt under FLSA and timesheets must be completed. We created some of new OPS hourly non-student research job codes for this purposes.

31. ePAF Processing Questions?

32. Payroll Changes
Good day. My name is XXXXX and I am the (insert job title here) of the XXXXX department. Today I am going to share payroll-related changes based on the updates to FLSA.

33. Policies and Regulations
3-003 Deductions from Salary of Exempt Employees
3-010 Eligibility for Overtime Compensation
3-112 Additions to Salary of Exempt Employees for Special Events
Regulations
Additional Compensation for UCF Employees
3.040 Benefits and Hours of Work
3.044 Compensation
As you can see on this slide, so far, there have been 3 policies and 3 regulations that were identified as needing changes. These documents have been updated and are either pending final review or approvals and will be posted on the appropriate websites. The vast majority of the changes have been to update the definition of FLSA and expand the job classifications that are eligible for overtime.

34. Timesheets and LAPERs
BIG CHANGE: Tracking in and out times on a Timesheet ( and new time reporting codes on the LAPERs
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.
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 eligibility for overtime pay. UCF chooses to use a Timesheet for this purpose and employees moving into a non-exempt classification will be required to submit one each pay period. This is a significant change for this group of employees (as previously they only submitted a LAPER to document their leave usage). Please be sure that employees are not simply putting 8 to 5 on this document, that is considered a “schedule” –actual in and out times should be documented.
The department’s payroll processor should run the PeopleSoft Employee Timesheets process (found under the HR Custom menu) and distribute the form to the employees for completion, or the employee can be instructed to download the Microsoft Excel version from the HR website. Processors should be sure to remind non-exempt employees of the internal processing deadlines to get their Timesheet submitted to their supervisor for signature – then it is up to the supervisor to turn in the Timesheet to the departmental payroll processor – this process should be similar to how other non-exempt employees are submitting their timesheets already.
Although not FLSA required, UCF does grant non-exempt employees a lunch break period. Non-exempt employees should be afforded at least 30 continuous minutes of unpaid and uninterrupted time. In addition, UCF grants non-exempt employees up to 15 minutes in the first half of the shift and 15 minutes in the last half of the shift as paid work break periods.

35. Sample Timesheet and LAPER – Normal Schedule
Hours Worked Section
Record time worked for each week as follows:
Enter in and out times vertically under the appropriate date column.
2. Total the number of hours worked for the day to the nearest quarter hour in the Total
Hrs block located under the appropriate date column.
3. Add all hours worked during Week 1 by adding all the Total Hrs blocks in the Week 1
section. Place this total in the Total Hours Worked Week 1 block.
4. Follow the same steps for Week 2.
Leave and Pay Exceptions Report Attached? Yes or No
1. Employees who have worked their standard hours with no exceptions should check the
‘no’ box located in the signature section. Employees who have worked extra hours,
used leave or compensatory time, earned overtime or special time pay, or used leave without pay,
must complete the Leave and Pay Exceptions Report. In this case, check the ‘yes’ box
located in the signature section, sign the timesheet, and complete the Leave and Pay
Exceptions report.
2. Sign, date, and submit the timesheet to the supervisor for approval.
Note: The form MUST be signed by the supervisor, however, if the employee is
unavailable to sign the form, the supervisor should indicate ‘employee
unavailable to sign’ on the employee signature line.

36. Payroll Processing and Approving
Time Reporting Codes Before
Sample of Time Reporting Codes as of 11/18/2016
HR is in the process of working with Computer Services to modify the Leave & Pay Exception Report so that employees will only see the Time Reporting Codes they are eligible to utilize. In addition to that, individuals in your department who are responsible for the task of Payroll Processing and Approving will notice more Time Reporting Codes in the drop down selection in the PeopleSoft Timesheet Page. These codes should be used for overtime, on-call, personal holiday and special comp pay reporting – as seen in the “Before” picture, exempt employees were not eligible for these kinds of payments.

37. Unauthorized Overtime
For exempt employees, “off the clock” work is normal and usually consists of checking s, making phone calls, logging into the system, etc. after the official work schedule time has concluded. However, for non-exempt employees, work like this must be documented on the Timesheet.
Overtime work should be discussed between a supervisor and employee prior to the work being performed.
If an employee works overtime without prior approval, the supervisor and employee should have a discussion. Repeated offenses could potentially escalate into reprimands, assistance from Human Resources, etc.
The university is required to pay a non-exempt employee for all hours worked, this includes unauthorized overtime.
For employees who were previously treated as exempt and were used to performing work after hours, this concept will need to be addressed. Tasks that may appear to take an insignificant amount of time, a quick check on s, making that one phone call to plan something for tomorrow, etc., is all considered work time and should be documented as such on the Timesheet. It is recommended that supervisors review which employees have a cell phone allowance or department issued laptops/other electronics for being available after hours. If a supervisor has not authorized a non-exempt employee to work beyond 40 hours in the workweek, the university is still required to pay the employee for that time. This is not a university rule, this is a federal law.

38. 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 your department. But please be aware that if you have a supervisor that asks a non-exempt employee to remain available or if they are asked to return to work during an off-duty period, they are eligible for on-call and call-back pay. There is a form on the HR website that the employee should complete and turn in to the Payroll Processor in their department so that it can be processed with the Timesheet. The amount of pay depends on a few different factors, the employee classification, the day of the week, and the number of hours.

39. Travel Time Column headings are now simply Non-exempt and Exempt
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 – and for a non-exempt employee, that would mean overtime pay if the hours physically worked exceed 40 in a workweek.

40. Compensatory Leave
Effective PPE 12/01/2016, overtime compensatory leave and special compensatory leave accrual (as leave balances) will no longer be permitted. (Exception: PBA)
Effective PPE 12/01/2016, overtime and special compensatory hours should be paid in the pay period in which they are earned. (Exception: PBA)
Overtime Comp and/or Special Comp hours in the leave balances should be used by 06/30/ Balances not used will be automatically paid out during that timeframe.
The changes to the regulations and policies was briefly mentioned at the beginning of this training. However, this is a significant change to point out that takes effect as of pay period ending 12/01/ The accrual of overtime compensatory and special compensatory hours will no longer be permitted for non-exempt employees (with the exception of law enforcement officers). The reason for this change is due to liability. Having the compensatory hours sitting in employees’ leave balances has shown that most employees are not taking the hours off at a later time. As the hours sit in the balance, each time there is an across-the-board increase or such, the value of those hours increases and costs the departments more money to pay out at a later date. With the expansion of employees now eligible for overtime, it appears that simply processing the overtime or special compensation in the pay period it is earned will help reduce future liability. For employees who currently have overtime and/or special compensatory leave balances, the hours should be utilized as time off prior to June 30th, 2018, or HR will process a payout at that time.

41. 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. They 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 they are now eligible for overtime pay. We will allow this group to keep their annual leave maximum payout and rollover based on 352 hours.

42. 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. They will see a decrease in their annual leave accrual from 6.77 hours biweekly to 6.00 hours biweekly. They 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 they are now eligible for overtime pay. We will allow this group to keep their annual leave maximum payout and rollover based on 352 hours.

43. Dual Compensation
Employees moving from exempt to non-exempt roles will no longer be able to work a secondary job and use the UCF Dual Compensation Form. Instead, all hours from the primary job and secondary job will need to be tracked on the Timesheet and processed by the primary department. This could result in overtime pay.
The Timesheet should contain all hours worked in both departments, and there needs to be an acknowledgement by both supervisors that the hours reported are accurate.
A Memorandum of Understanding is being developed that will be signed by the Employee, the Primary Supervisor and Secondary Supervisor to outline the work being performed and other rules associated with this type of work situation.
Journal transfers should be performed to move money from the secondary to primary department to cover the wages and associated employer tax.
OPS/OP1 employees are not eligible for Dual Compensation.
Another area to consider with the changing of employees from exempt to non-exempt is dual compensation. Employees who were exempt and performing dual compensation work followed the traditional method of processing which was with the Dual Compensation Form and a second job record. However, if an exempt employee is being classified as non-exempt, the employee will need to document their hours worked for both the primary job and secondary job onto 1 timesheet and the primary department will key it into the Timesheet Page of PeopleSoft. This will produce a payment at the rate of 1 ½ times their normally hour rate for those secondary job hours – in order to comply with FLSA. It will be up to the departments to work out a journal transfer to move the funds for the wages and employer tax on the secondary job back to the primary department. HR is working on a Memorandum of Understanding and some further documentation that will provide further details. (At this time, there are only 25 individuals in this situation and HR will be working directly with the affected departments.)

44. Payroll Questions? Are there any questions?
I’ll now turn the presentation over to Recruitment.
Thank you for your time.

45. Recruitment Process

46. PeopleAdmin No change in creating requisitions or in posting positions
A&P - Still may post at “Negotiable” or “Salary to Negotiable”
Exemption status may not be determined until a salary analysis has been completed on the selected candidate

47. Keep in Mind….
Exemption status may not be determined until a salary analysis has been completed on the selected candidate.
Be mindful of how you discuss the position with candidates. Benefits, how hours are tracked, travel and work expectations can all be affected by exemption status.

48. Recruitment Questions?

49. Additional Resources

50. UCF FLSA Update
US Department of Labor Final Rule: Overtime
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