1. Jointly presented by Human Resources and FSO-Operations Fair Labor Standards Act Revisions

2. August 2, 2004 2 The University of Arizona – Human Resources and FSO-Operations FLSA Definitions Exempt Employee: paid on a salary basis – non fluctuating, pre- determined amount; not covered by the overtime provisions. Nonexempt Employee: paid on an hourly basis for all hours worked in a work week; covered by the overtime provisions.

3. August 2, 2004 3 The University of Arizona – Human Resources and FSO-Operations FLSA Overtime Provisions Nonexempt employees who work over 40 hours in a work week receive overtime pay (or compensatory time off) at one and one half times their regular rate of pay. Employers must keep accurate records of nonexempt employees’ hours worked.

4. August 2, 2004 4 The University of Arizona – Human Resources and FSO-Operations Requirements for Exemption from Overtime Employee paid no less than $455 a week – “salary level test;” and Employee paid a non- fluctuating salary – “salary basis test;” and Employee performs exempt duties – “duties test.”

5. August 2, 2004 5 The University of Arizona – Human Resources and FSO-Operations Salary Level Test Minimum weekly salary raised to $455 from either $250 or $155 depending on test used. Consequences: More full- or part-time employees in otherwise exempt jobs are now nonexempt.

6. August 2, 2004 6 The University of Arizona – Human Resources and FSO-Operations Salary Basis Test Employees receive a predetermined amount regardless of quality or quantity of work. Consequences: Exempt employees must continue to be paid a salary as defined by the FLSA.

7. August 2, 2004 7 The University of Arizona – Human Resources and FSO-Operations Exceptions to Salary Level and Salary Basis Tests Salary requirements do not apply to teachers, outside sales employees and those practicing law or medicine. Consequences: Adjunct Faculty making less than $455 a week remain exempt.

8. August 2, 2004 8 The University of Arizona – Human Resources and FSO-Operations Other Exceptions Graduate student assistants & associates likely are not employees for purpose of FLSA. Consequences: Graduate student assistants and associates would no longer have to complete time records.

9. August 2, 2004 9 The University of Arizona – Human Resources and FSO-Operations Duties Test for Exemption Learned Professional Exemption Creative Professional Exemption Computer Professional Exemption Highly Compensated Exemption Executive Exemption Administrative Exemption

10. August 2, 2004 10 The University of Arizona – Human Resources and FSO-Operations Duties Test – Professional Exemption - Learned Professional Primary duty is performance of work requiring advanced knowledge, intellectual in character and exercising judgment and discretion. Advanced knowledge involves a field of science or learning and must customarily involve a prolonged course of specialized intellectual study.

11. August 2, 2004 11 The University of Arizona – Human Resources and FSO-Operations Duties Test - Professional Exemption - Creative Professional Primary duty is the performance of work requiring invention, imagination, originality or talent in a recognized field of artistic or creative endeavor.

12. August 2, 2004 12 The University of Arizona – Human Resources and FSO-Operations Duties Test - Computer Professional Primary duty involves systems analysis procedures, including consulting with users to determine hardware, software & systems specifications; The design, development, analysis, testing or modification of programs and systems; or Similar work related to machine operating systems.

13. August 2, 2004 13 The University of Arizona – Human Resources and FSO-Operations Highly Compensated Employee Test Primary duty is office or non- manual work; and Regularly performs either executive, administrative or professional exempt work; and Earns $100,000 or more, including a salary of at least $455 a week.

14. August 2, 2004 14 The University of Arizona – Human Resources and FSO-Operations Duties Test – Executive Exemption Primary duty is managing a recognized department or subdivision. Note: employee can still perform non-management tasks if primary duty is managing. Regularly directs the work of at least two or more full-time employees or their FTE equivalent. Has authority to take actions such as hiring or firing or the ability to recommend and meaningfully influence such actions.

15. August 2, 2004 15 The University of Arizona – Human Resources and FSO-Operations Duties Test - Administrative Exemption Primary duty is office or non- manual work directly related to the general business operations of the employer. Primary duties include the exercise of discretion and independent judgment with respect to matters of significance.

16. August 2, 2004 16 The University of Arizona – Human Resources and FSO-Operations Examples of Discretion & Independent Judgment May deviate from established policies and procedures without prior approval. Negotiates and has authority to bind the employer on significant matters with or without financial impact. Handles complaints, disputes and grievances.

17. August 2, 2004 17 The University of Arizona – Human Resources and FSO-Operations Compliance Steps 1. Analysis 2. Communications and Training 3. Administrative Process 4. Systems Enhancements

18. August 2, 2004 18 The University of Arizona – Human Resources and FSO-Operations Steps for Compliance - Analysis Identify employees in exempt jobs who fail to meet new salary level test. Review Classified Staff generic job descriptions and identify any questionable exemptions.

19. August 2, 2004 19 The University of Arizona – Human Resources and FSO-Operations Steps for Compliance – Communications and Training HR notifies departments with employees changed from exempt to nonexempt because of salary level test. HR and FSO present training sessions to the campus community. Establish comprehensive FLSA page on HR website.

20. August 2, 2004 20 The University of Arizona – Human Resources and FSO-Operations Steps for Compliance –Administrative Ensure recordkeeping requirements are communicated to departments. Introduce revisions to PAF and the Hiring Form to capture the employee exemption status. Introduce new codes for the exemption status of the job and of the employee.

21. August 2, 2004 21 The University of Arizona – Human Resources and FSO-Operations Employee Is Nonexempt Yes No Employee Is Exempt Yes No Employee Is Exempt Yes Employee Is Nonexempt No Determining Employee Exemption Status single job OR multiple jobs Is the employee a doctor, lawyer or teacher? Is the employee assigned to a Classified Staff job that HR has designated as nonexempt? Is the employee regularly paid a salary of at least $455 a week? The University of Arizona – Human Resources and FSO August 2, 2004 21

22. August 2, 2004 22 The University of Arizona – Human Resources and FSO-Operations FLSA Exemption Codes For the Employee E – Exempt N – Nonexempt For the Job Y – Yes, the job is always exempt N – No, the job is never exempt M – Maybe the job is exempt X – Exclude this job

23. August 2, 2004 23 The University of Arizona – Human Resources and FSO-Operations Steps for Compliance – Systems Enhancements Develop capability to have nonexempt and exempt employees in the same classification. Set up system to track salary level changes that result in exemption status change. Capture exemption status changes in the Payroll/HR system.

24. August 2, 2004 24 The University of Arizona – Human Resources and FSO-Operations Impact on Employees May be eligible for overtime pay. Maintain accurate time record of every hour worked. Communicate with departments if holding more than one job.

25. August 2, 2004 25 The University of Arizona – Human Resources and FSO-Operations Impact on Hiring Departments Monitor budgets to pay overtime to newly eligible employees. Train employees on accurate time keeping procedures. Be aware of changes in employees exemption status, and manage accordingly.

26. August 2, 2004 26 The University of Arizona – Human Resources and FSO-Operations FLSA Compliance Tools PSOS Screens 2 screens with exemption codes ISW reports 2 Different reports Notices of Exemption code conflicts Corrections PAF Time Sheets POPRs or Vac/Sick Adjustments

27. August 2, 2004 27 The University of Arizona – Human Resources and FSO-Operations PSOS Screen 08 YNMXYNMX

28. August 2, 2004 28 The University of Arizona – Human Resources and FSO-Operations PSOS Screen 02 Employee’s FLSA status Wildcat, Wilbur1234

29. August 2, 2004 29 The University of Arizona – Human Resources and FSO-Operations PSPM03 Time Roster Worksheet (FLSA Exemption Status Conflict) Wednesday of non-pay week Wildcat, Wilbur Wildcat, Wilma 1234

30. August 2, 2004 30 The University of Arizona – Human Resources and FSO-Operations TRPR31A - Final Departmental Online Time Roster Wildcat, Wilbur Wildcat, Wilma (FLSA Exemption Status Conflict) Wednesday of pay week 1234

31. August 2, 2004 31 The University of Arizona – Human Resources and FSO-Operations PAF Form to Change Employee Exemption Status Emp FLSA Stat FLSA Title

32. August 2, 2004 32 The University of Arizona – Human Resources and FSO-Operations Timesheets for Recordkeeping 8V8V 4 4 4 4 4 R R V R R 4 4 4 R R R R R U.50 FTE Non-Exempt Employee (retro time sheet to correct) Exempt Employee – Exception Time reporting

33. August 2, 2004 33 The University of Arizona – Human Resources and FSO-Operations Paying OT for a Prior Pay Period

34. August 2, 2004 34 The University of Arizona – Human Resources and FSO-Operations Adding Comp Time not Previously Reported

35. August 2, 2004 35 The University of Arizona – Human Resources and FSO-Operations Contacts and Questions For questions regarding:Contact: PAFsSystems Control 621-3664 Time Rosters, TimesheetsFSO-Operations 621-9097 OT reporting Employee InquiriesHuman Resources 621-3662 Departmental InquiriesHR Organizational Consultant Or visit our websites: Human Resources http://www.hr.arizona.edu/ FSO – Operations http://www.fso.arizona.edu/fso/operations.asp