FLSA TOWN HALL Q&A on the Final Regulations and Changes to the Fair Labor Standards Act
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1 FLSA TOWN HALL Q&A on the Final Regulations and Changes to the Fair Labor Standards Act Fall, 2016
2 Agenda Topics: Overview of the Fair Labor Standards Act Department of Labor Final Rule Specific Guidance for Higher Education USG Information Tools and Resources Questions
3 Overview of the Fair Labor Standards Act (FLSA) The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
4 FLSA: What & Why What this means Most VSU employees below the $47,476 salary will have their exempt status change of exempt to non-exempt. Impacted employees will be required to accurately record their daily working time and will have the right to overtime, compensated as compensatory time (comp time) at a rate of 1 ½ hours (time and a half) for each and every hour worked in excess of 40 in the designated workweek
5 Agenda Topics: Overview of the Fair Labor Standards Act Department of Labor Final Rule Specific Guidance for Higher Education USG Information Tools and Resources Questions
6 Key Provisions of the Final Rule Minimum Salary Threshold will Significantly Increase The Threshold will Adjust Automatically Every 3 Years The final rule increases the salary threshold to $913/week; $47,476 annually. The proposed rule establishes a mechanism for automatically updating the salary and compensation levels every 3 years, starting January 1, Consideration of Making Changes to the Duties Tests No changes were made to the duties tests. The effective date of the Final Rule is December 1,
7 Agenda Topics: Overview of the Fair Labor Standards Act Department of Labor Final Rule Specific Guidance for Higher Education USG Information Tools and Resources Questions
8 Specific Guidance for Higher Education Instructors under the Professional duties exemption Teachers are exempt if their primary duty is teaching, tutoring, instructing or lecturing in the activity of imparting knowledge, and if they are employed and engaged in this activity as a teacher in an educational establishment. The salary and salary basis requirements do not apply to bona fide teachers. Graduate Teaching Assistants Graduate teaching assistants who have teaching as their primary duty are covered under the teaching exemption and are not subject to the salary tests, remaining exempt under the Final Rule. Graduate Research Assistants Generally, the DOL views graduate students who are engaged in research under a faculty member s supervision in the course of obtaining a degree as being in an educational relationship with the school. Therefore, the DOL would not assert an employment relationship with either the school or any grantor funding the research. Thus, in these situations, the DOL will not assert that such workers are entitled to overtime. 7
9 Specific Guidance for Higher Education Athletic Coaches: Athletic coaches employed by higher education institutions may qualify for the teaching exemption. Resident Assistants Student residential assistants enrolled in bona fide educational programs who receive reduced room or board charges or tuition credits from the university are not generally considered employees under the FLSA, and therefore are not subject to the FLSA s wage and hour requirements. Other Titles are under review by the USG System Office 8
10 Agenda Topics: Overview of the Fair Labor Standards Act Department of Labor Final Rule Specific Guidance for Higher Education USG Information Tools and Resources Questions
11 Timeline September Communication to individuals affected by the change. Town Hall Information Sessions Supervisor Trainings October Supervisor and Employee Communication Employees Receive last Monthly check November Employees receive biweekly paychecks beginning with the November 10 payroll. 10
12 Employee Communication #1: A Letter will be sent via Senior Administrator denoting all affected employees. #2: A Letter will be sent via Senior Administrator denoting the personalized change to each employee. Title Change Exemption Change Salary Change 11
13 Steps to take Before Oct. 1 Employee Self Service View your Pay Record your time Review Direct Deposit and Deductions for adjustments needed (Sept. Payroll) Review personal finances for timing changes needed for creditors 12
14 Steps to take Before Oct. 24 Review your direct deposit Review your deductions Review tax withholding amounts 13
15 Steps to take Before Nov. 14 Check personal accounts for deposit Make any changes necessary to tax withholding and benefits 14
16 Example 15
17 16
18 Bi-Weekly Pay Schedule 17
19 Things to Remember All Deductions will automatically be divided in half for biweekly (24 weeks) Withholding amounts or flat amounts will need to be edited (Tax Withholding, Auto Deposit to Savings, etc. Any changes to TSA accounts will need to be done manually 18
20 19
21 Agenda Topics: Overview of the Fair Labor Standards Act Department of Labor Proposed Changes USG Information FAQ s Questions
22 FAQ s 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. 21
23 FAQ s 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. 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. 22
24 FAQ s If compensatory (comp) time is permitted, how much comp time can be accumulated? The rules allow an accumulation of not more than 240 hours in a fiscal year. Compensatory time must be used before using vacation or sick time. Compensatory time is only accrued for a week of work; thus if you have sick, annual or holiday leave within that week then you would not normally accrue compensatory time The accrual and use of compensatory time must be approved by the supervisor. Please see the Compensatory Time Off policy 23
25 FAQ s Will use of banked Compensatory Time be mandated when requesting Sick or Annual Leave? Yes. If an employee has compensatory Time accrued it will be utilized prior to using sick or annual leave. This will alleviate reaching the 240 hours limits on compensatory time and will also help employees in maintaining their sick and annual leave. Will use of banked Flex Time be eliminated? Yes. Employees should be managing their Flex Time based on the USG Flex Time policy. There will be no carryover of flex time into a comp time bank. Each department may choose how they would like to handle any flex time that an employee who is changing to non-exempt from exempt may have logged. 24
26 FAQ s What about my parking decal? If you have already purchased a reserve decal you can keep it. If you have already purchased a reserve decal you can get a refund if you would like to change your decal to a staff decal. What about my monthly October and November deductions? October premiums will be deducted from the October paycheck as normal. Deductions will be taken from each bi-weekly in November. The November 10 payroll will have the biweekly premium deductions taken. Discussions are being had in reference to any employee who may not be able to pay their full deductions and taxes as this check will have only 4 days included. Biweekly premiums will be deducted on each paycheck except for 3 rd biweekly paychecks that occur twice per calendar year. 25
27 FAQ s How will I offset the financial loss in November and December for changing my exemption status? The University System has been developing ways to help support you with the transition to bi-weekly pay and the impending lag in payment that will occur because of this change. The University System will offer employees the ability to cash out up to 48 hours of their accrued vacation leave. Your manager will share more information about this option later this month. 26
28 Question and Answer
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