FREQUENTLY ASKED QUESTIONS FLSA CHANGES FOR 2016

Transcription

1 1. What is the Fair Labor Standards Act? FREQUENTLY ASKED QUESTIONS FLSA CHANGES FOR 2016 The Fair Labor Standards Act (FLSA) of 1938 (29 USC 201 et seq.) is the United States federal wage and hour law, administered by the US Department of Labor. Among other things, it establishes the minimum wage and overtime pay, affecting employees in the private and government sectors. Everyone is covered but some employees are exempt from FLSA regulations and some are nonexempt. The FLSA requires one-and-one-half times the regular rate of pay in Overtime or Compensatory time be paid for all hours worked over 40 in a workweek for non-exempt employees. 2. What does it mean to be exempt or non-exempt? Exempt employees are excluded from overtime payment. Non-exempt employees are subject to the payment of overtime. Exemption is based on qualifying for all three of the following tests: Salary Basis Test. Employee must be paid on an annual salary basis; and Minimum Salary Threshold Test. Employees must be paid above a salary threshold amount that is currently $455 per week or $23,660 annually, and Duty and Discretion Tests. Employee must qualify as an executive, administrator, professional, or computer professional. 3. What is changing? The Minimum Salary Threshold Test is changing. The US Department of Labor has proposed changes that would raise the minimum salary threshold to the 40th percentile of weekly earnings for full-time salaried workers. The proposed minimum salary threshold, above which an employee can be designated as exempt from overtime requirements, will be $913 a week or $47,476 per year. The final rule that will determine the employees eligible for overtime was released on May 18, 2016 with an effective date of December 1, Who will the rule change affect? If an employee s rate of pay is below the new minimum salary threshold, the employee (unless he or 1 P a g e

2 she qualifies for one of the exceptions listed below) must be designated as non-exempt. Employees whose pay is below the threshold and who are designated as non-exempt will have to account for their time by the hour. 5. Who is excluded from these changes? Teachers qualify for an exemption as professionals. Faculty and instructional academic staff whose primary duties are teaching will remain exempt regardless of their salaries. To be properly designated as a teacher, however, an employee must have actual instructional duties. Those who support teaching activities without actual teaching interaction will most likely be designated as non-exempt 6. How does the proposed rule change affect staff members who work less than full time? Pay for part-time appointments will not be pro-rated. An employee with a.75 appointment with a fulltime rate of $60,000 (above the minimum salary threshold) is paid $45,000. $45,000 is below the new minimum salary threshold, and therefore, the employee will be non-exempt. 7. Will changing from exempt to non-exempt and back again affect an employee s leave accrual? No. It will affect how the employee reports time, but not leave accrual. 8. Can employees opt out of this change if they want to continue to be considered a salaried or exempt employee? No. FLSA is a federal law. The determination of an employee s FLSA status is governed by the requirements of the federal law it is not an employee choice. 9. How is tracking hours worked different for an hourly non-exempt employee? Non-exempt employees must account for time worked rather than accounting for leave used. All time worked must be reported. 10. When is an employee entitled to overtime pay? At VSU the decision has been made that only University Police and Plant Facilities employees are eligible for overtime. All others will receive compensatory time off. 11. Will some employees receive a pay increase for the purpose of maintaining the employee s exempt status? It is an employer s decision. There is no additional funding for such pay increases, but VSU may, in some cases, decide to raise the pay rate of an employee in order to preserve the exempt status. 12. Can non-exempt employees still attend professional conferences? Yes. Non-exempt employees must account for the travel time and for the hours of conference attendance, but there is no prohibition on traveling or professional development. 2 P a g e

3 13. If compensatory (comp) time is permitted, how much comp time can be accumulated? The rules allow an accumulation of not more than 60 hours. Any comp time over the 60 hour limit will be paid out at the time the 60 hour maximum is reached. Overtime work shall be authorized for employees who are not exempt from the provisions of the Fair Labor Standards Act only when the work is deemed necessary by the supervisor or Vice President of that respective area. Payment for overtime work will be made in accordance with the Fair Labor Standards Act. Compensatory time may be granted in lieu of payment for approved overtime work at the rate of one and one-half hours of compensatory time for each hour of overtime work. Approved compensatory time is subject to a maximum accumulation of sixty (60) hours and must be expended by the end of the succeeding calendar quarter. 14. Does the value of meals and lodging that employees receive as part of the position held count toward the FLSA minimum salary requirement? No. Under 29 C.F.R , to be designated FLSA exempt, an employee is required to be compensated on a salary basis at a rate of not less than a specified level exclusive of board, lodging or other facilities. The phrase exclusive of board, lodging, or other facilities means free and clear of any claimed credit for non-cash items of value that an employer may provide to an employee. Therefore, any costs incurred by an employer in providing employees with meals or lodging cannot count towards the minimum salary requirement. See DOL Field Operations Handbook 22g Are instructional academic staff and other employees whose primary duty is teaching or instructing subject to the minimum salary threshold? No. Instructional academic staff and others who qualify as teachers are not subject to the minimum salary threshold. To be exempt from FLSA overtime requirements as a teacher under 29 CFR , the following two tests must be met: The employee s primary duty must be imparting knowledge by teaching, tutoring, instructing, or lecturing, and The employee must be employed by an educational establishment. Teachers who earn less than the minimum salary (including part-time teachers) are exempt as long as their primary duty is teaching. 16. Are athletic coaches exempt under the FLSA? Head coaches are generally exempt as teachers. Assistant coaches may be teachers but it depends on their actual duties. If the primary duty of a coach is imparting knowledge by instructing as opposed to such duties as scouting, recruiting and conditioning of athletes, arranging for equipment, devising game strategies, making travel plans, formulating budgets, and fundraising then the coach is considered to be engaged in teaching and therefore exempt from overtime requirements and not subject to the minimum salary threshold test. 3 P a g e

4 One DOL opinion letter states that Assistant Athletic Instructors (a.k.a. coach) are exempt as teachers when they teach proper skills and skill development to student- athletes. When teaching is not the primary duty, the coach may not be exempt, See DOL Field Operations Handbook 22i 22 ; DOL FLSA What does the DOL mean by primary duty? The term "primary duty" means the principal, main, major or most important duty that the employee performs. Determination of an employee's primary duty must be based on all the facts in a particular case, with the major emphasis on the character of the employee's job as a whole. Factors to consider when determining the primary duty of an employee include, but are not limited to: the relative importance of the major or most important duty as compared with other types of duties; the amount of time spent performing the major or most important duty; the employee's relative freedom from direct supervision; and/or the relationship between the employee's salary and the wages paid to other employees for performance of similar work. The amount of time spent performing the specific duty can be a useful guide in determining whether such work is the primary duty of an employee. Employees who spend more than 50 percent of their time performing a specific duty will generally satisfy the primary duty requirement. Time alone, however, is not the sole test, and nothing requires exempt employees to spend more than 50 percent of their time performing a specific duty. Employees who do not spend more than 50 percent of their time performing their major or most important duty may nonetheless meet the primary duty requirement if the other factors (listed above) support such a determination. 18. If an employee holds more than one job, can the employee have more than one FLSA status designation? No. Regardless of how many jobs an employee holds, the employee s status must be either exempt or non-exempt. For example: Employee X, whose total salary is below the minimum salary threshold, holds a part-time instructional academic staff position as a lecturer. The employee also holds a part-time position as a recreational specialist. If Employee X s primary duty is teaching as a lecturer, then the employee s designation is exempt because teaching is the employee s primary duty and qualifies for the teacher exemption regardless of r salary. But if the primary duty is determined to be work as a recreational specialist, the FLSA designation will be non-exempt because total salary is under the minimum salary threshold. 19. Are Residence Hall Assistants exempt or non-exempt under the FLSA? Neither. Generally, Residence Hall Assistants (or dormitory counselors ) are not considered employees for FLSA purposes, as long as they are students and receive reduced room and board charges.. A court action (Marshall v. Regis Educational Corporation, 666 F.2d 1324 (10th Cir. 1981) specifically held that student residence hall advisors were not employees covered by the FLSA because, taking into account the totality of the circumstances, the students were primarily receiving personal educational benefits 4 P a g e

5 from their service. Moreover, the DOL Field Operations Handbook states that if a college student (who is in a bona fide educational program) serves as residence hall assistant and receives remuneration in the form of reduced room or board charges, payment of cell phone expenses, tuition credits and the like, that student is not an employee within the meaning of the FLSA. See DOL Field Operations Handbook 10b Can VSU still engage volunteers? Yes. However, an employee may not perform volunteer activities that are the same or similar to the activities the employee is employed to perform. Under the FLSA, in the vast majority of circumstances, individuals can volunteer services to public sector employers. When Congress amended the FLSA in 1985, it made clear that people are allowed to volunteer their services to public agencies and their community with but one exception public sector employers may not allow their employees to volunteer, without compensation, additional time to do the same work for which they are employed. There is no prohibition on anyone employed in the private sector from volunteering in any capacity or line of work in the public sector. See DOL Guidance on Volunteers, and on Public Sector Volunteers. Updated 8/7/ P a g e