Wage and Hour Compliance Policy
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1 ROMAN CATHOLIC DIOCESE OF ROCHESTER Wage and Hour Compliance Policy Issued by: Rev. Joseph A. Hart, V.G. Date Issued: February 8, 2001 Last Revised: September 6, 2013 KEY POLICY STATEMENTS: The Diocese of Rochester and its affiliated employers ( DORAE ) adhere to the federal Fair Labor Standards Act (FLSA) and New York State wage and hour laws and regulations. In accordance with such federal and state laws, DORAE shall do the following: Recordkeeping. DORAE shall require non-exempt (hourly) employees to keep track of all time worked through the use of time cards (or suitable alternative). DORAE shall also maintain payroll records for the minimum timeframe required under federal and state law. See further details below. Hours worked. Non-exempt (hourly) employees shall be paid for all the time worked for and/or on behalf of DORAE. Overtime. Non-exempt (hourly) employees shall be paid one and one-half times their regular hourly rate of pay for overtime hours worked in excess of 40 hours in a workweek. Minimum Wage. Non-exempt (hourly) employees must be paid at least the greater of the federal or New York State minimum wage for all hours worked. Training regarding wage and hour compliance shall be provided to all employees. Additional training shall be provided to supervisors and those who process payrolls, in order that they may be aware and knowledgeable of pertinent wage and hour laws pertaining to their subordinates. DORAE must use the Diocesan approved third party vendor for payroll services currently ADP. Active DORAE retirees may fill paid positions in the Diocese or its affiliated employers to receive a diocesan monthly annuity ONLY IF employed through an employment agency. Wage and Hour Compliance Policy Page 1 of5
2 APPLIES TO: The Diocese of Rochester and its affiliated employers. DETAILS: Exempt Employee vs. Non-Exempt Employee Definitions and Implications What differentiates an exempt Employee from a non-exempt Employee is compensation AND job functions. ExemDt EmDloyee: Must generally have a salary of not less $ per week AND fall into one of the exemption categories below: Executive manages the organization or a department (and supervises at least two fuiltime employees or the equivalent thereof) Administrative uses discretion and independent judgment to perform non-manual work directly related to management or business operations of the Diocese of Rochester or its affiliated employers. Professional generally has at least a four-year degree that is required for the particular field and performs work that is predominately intellectual (must have a salary of not less than $455 per week) Computer Professional -- designs, develops, documents, analyzes, creates, tests, or modifies computer systems or programs (typically not helpdesk-type employees) Non-ExemDt Employee: An employee compensated less than $ per week (or $455 for administrative employees) OR who does not meet at least one of the specific exemptions above (or any other exemption under federal or state law). Employees in non-exempt jobs are subject to federal and state minimum wage and overtime requirements, and shall be paid overtime (at one and one-half times the regular rate) for all hours worked over 40 hours per workweek. Quite often non-exempt jobs are referred to as hourly and exempt jobs are referred to as salaried. While that is often the case, by the letter of the law, that is not always true. Payroll Policies In order to comply with FLSA and state wage and hour law, the following payroll policies have been established: 1. Accurate recording of time worked is the responsibility of every non-exempt (hourly) employee. Time worked is all time spent performing duties for or on behalf of The DORAE. Working off the dock is not permitted. 2. Non-exempt (hourly) employees must complete and sign/initial their time card (or suitable alternative) each workweek to certify that the time card accurately reflects all Wage and Hour Compliance Policy Page 2 of 5
3 time worked and to document any time off. If you have questions about deductions from your pay, please contact your Payroll Administrator immediately. If you believe your wages have been subject to any improper deductions or your pay does not accurately reflect all hours worked, you must report your concerns to your Payroll Administrator immediately, in order that DORAE may promptly and appropriately address any such concerns. 3. Non-Exempt employees are required to obtain supervisor approval prior to accruing overtime hours. An employee who fails to obtain supervisor approval will be paid one and one-half times his/her regular hourly rate of pay for any overtime hours accrued, but may be subject to disciplinary action. A non-exempt employee may not take work home or work before or after his/her shift without the express permission of his/her supervisor, which must be noted on the timecard or timesheet. You may not work through your meal breaks, unless approved by your supervisor in rare circumstances. If approved, you must be paid for such time. 4. Overtime pay is based on actual time worked. Paid time off will not be considered time worked for purposes of overtime calculation. 5. Exempt (salaried) employees must complete a time card (or suitable alternative) only to report paid time off (e.g. vacation time, sick time, personal days, etc.), and must sign/initial it to verify the accuracy of the information provided. 6. The Pastor/Pastoral Administrator/Supervisor must review and sign employee time cards (or suitable alternative) each workweek and must follow up with employees regarding any questions related to the information contained on time cards. 7. Priests/Pastoral Administrators are not required to complete a time card. 8. A review of the payroll record provided to each employer must be performed each payroll period by the Pastor/Pastoral Administrator/Supervisor or a person assigned to do the review (this person must be independent of the payroll process). The review is necessary to verify the accuracy of the payroll that was processed. The payroll file must be dated and signed by the reviewer to evidence the review. 9. Payroll taxes and wages must be calculated and reported in accordance to state and federal regulations. Form 941 is used to report quarterly wages and taxes to the IRS. FORM NYS-45 is used to report quarterly wages and taxes to NYS. (This service is provided by the approved third patty vendor for payroll services.) 10. All employees must receive a W-2 at the end of the year. (This service is provided by the approved third party vendor for payroll services.) 11. All self-employed individuals who are engaged by DORAE on a contract basis must receive a Form 1099-MISC at the end of the year (wages of $600 or more). (This service is provided by the approved third patty vendor for payroll services.) Reference the 1099-MISC Reporting Policy. (link) Wage and Hour Compliance Policy Page 3 of 5
4 12. All salary levels and benefits offered by DORAE must be in compliance with the diocesan salary and benefits guidelines. Exceptions must be documented in writing, approved by the Bishop or Vicar General and kept in the employee s file. 13. Exempt Employees. If you are classified as an exempt salaried employee, you will receive a salary which is intended to compensate you for all hours that you may work for DORAE. This salary will be established at the time of hire or when you become classified as an exempt employee. While it may be subject to review and modification from time to time, such as during salary review times, the salary will be a predetermined amount that will not be subject to deductions for variations in the quantity or quality of the work you perform. You will receive your full salary for any workweek in which work is performed. However, under federal and state law, your salary is subject to certain deductions. For example, absent contrary state law requirements, your salary can be reduced for the following reasons in a workweek in which work was performed: Full day absences for personal reasons, including vacation. Full day absences for sickness or disability, since we have a sick day pay plan and short-term disability insurance plan. Full day disciplinary suspensions for infractions of safety rules of major significance (including those that could cause serious harm to others). Family and Medical Leave absences (either full or partial day absences). To offset amounts received as payment for jury and witness fees or military pay. Unpaid disciplinary suspensions of one or more full days for significant infractions of major workplace conduct rules set forth in written policies. The first or last week of employment in the event you work less than a full week. Your salary also may be reduced for certain types of deductions, such as: your portion of health, dental or life insurance premiums; state, federal or local taxes, social security; or voluntary contributions to a 403(b) or pension plan. In any workweek in which you performed any work, your salary will not be reduced for any of the following reasons: Partial day absences for personal reasons, sickness or disability. Your absence because the facility is closed on a scheduled work day. Absences for jury duty, attendance as a witness, or military leave in any week in which you have performed any work. Any other deductions prohibited by state or federal law. Please note: You will be required to use accrued paid time off for full or partial day absences for personal reasons, sickness or disability. However, your salary will not be reduced for partial day absences if you do not have accrued paid time off or vacation as applicable. Wage and Hour Compliance Policy Page 4 of 5
5 Other payroll related policies can be found in the Employee Handbook and in the existing policies below: Classification of Workers Policy defines who is an independent contractor vs. an employee. (link) Notice and Acknowledgement of Pay and Payday Policy covers the provisions of the Wage Theft Prevention Act. (link) Family Medical Leave Act (FMLA) Policy covers the provisions of the FMLA. (link) Wage and Hour Compliance Policy Page 5 of 5
6 ROMAN CATHOLIC DIOCESE OF ROCHESTER Family Medical Leave Act (FMLA) Policy Issued by: Rev. Joseph A. Hart, Delegate of Date Issued: September 6, 2013 the Apostolic Administrator KEY POLICY STATEMENTS: The Diocese of Rochester and its Affiliated Employers ( DORAE ) provides eligible employees with time off when compelling family or medical problems covered by the Family and Medical Leave Act ( FMLA ) require a leave of absence. Employees become eligible to apply for FMLA leave after completing 12 months of employment and working 1,250 hours Eligible employees may take up to 12 weeks of job-protected leave during a 12- month period for one of the following qualifying reasons: o A serious health condition that makes the employee unable to perform the functions of his or her job; o The birth of the employee s child and to care for the newborn child within one year of birth; o The placement of a child under the age of 18 years with the employee for adoption or foster care; o The care of a child, spouse or parent with a serious health condition; o For any qualifying exigency (circumstance) arising out of the fact that the employee s spouse, son, daughter, or parent is on active duty or is called to active duty status as a member of the National Guard or Reserves in support of a contingency operation. Leave taken under this policy may be paid, unpaid or a combination of paid and unpaid, depending on the circumstances of the leave. Under certain circumstances, FMLA leave may be taken intermittently or on a reduced leave schedule. Family Medical Leave Act (FMLA) Policy Page 1 of7
7 Employees are required to provide medical certification of their own serious health condition or that of a family member. Employees will continue to receive health and/or dental benefits under the same terms and conditions as if they were on the job while on approved continuous or intermittent FMLA leave. APPLIES TO: The Diocese of Rochester and its Affiliated Employers DETAILS: DORAE provides eligible employees with time off when compelling family or medical problems covered by the Family and Medical Leave Act ( FMLA or the Act ) require a leave of absence. In the event that any of the provisions of this policy conflict with the FMLA and its accompanying regulations, then the Act and its accompanying regulations will control. A. EIi ibillty Employees become eligible to apply for FMLA leave after completing 12 months of employment and working 1,250 hours during the 12 month period immediately before the employee takes leave. The employee must work at a location which employs at least 50 employees, or which is within a 75-mile range in which at least 50 employees work. While the 12 months of employment need not be consecutive, employment periods prior to a break in service of 7 years or more need not be counted unless the break is occasioned by the employee s fulfillment of their National Guard or Reserve military obligation. B. Quaii, ing Reasons for Leave Eligible employees may take up to 12 weeks of job-protected leave during a 12- month period for: A serious health condition that makes the employee unable to perform the functions of his or her job; The birth of the employee s child and to care for the newborn child within one year of birth; The placement of a child under the age of 18 years with the employee for adoption or foster care; The care of a child, spouse or parent with a serious health condition; For any qualifying exigency (circumstance) arising out of the fact that the employee s spouse, son, daughter, or parent is on active duty or is called to Family Medical Leave Act (FMLA) Policy Page 2 of 7
8 active duty status as a member of the National Guard or Reserves in support of a contingency operation. An eligible employee, who is a spouse, son, daughter, parent or next of kin of a current member of the Armed Forces, including a member of the National Guard or Reserves, with a serious injury or illness must be granted up to a total of 26 workweeks of leave during a single 12-month period to care for the service member. DORAE will measure the 12-month period as a rolling 12-month period measured backward from the date an employee uses any leave. In any case where spouses are employed by DORAE, the combined total amount of FMLA leave they may be entitled to take for the birth and care of a newborn child, placement of a child for adoption or foster care or to care for the child after placement, or to care for a parent (but not a parent in-law ) with a serious health condition, may be limited to a combined total of 12 workweeks (or a combined total of 26 workweeks if leave is to care for a covered military service member with a serious injury or illness). C. Time off(paid and Unpaid) Leave taken under this policy may be paid, unpaid or a combination of paid and unpaid, depending on the circumstances of the leave. Generally, employees will have the option to utilize any accrued Paid Time Off or Vacation while on leave, but this is not required. Any such paid time will run concurrently with and be counted against the employees FMLA leave entitlement. If an employee is taking FMLA leave for his/her own serious health condition, available statutory and full income replacement benefits must be used. There are no exceptions. Absences due to an employee s serious health condition that are also covered by short-term disability or Workers Compensation will run concurrently with and count against the employee s FMLA leave entitlement. D. Intermittent or Reduced Leave Schedule Under certain circumstances, FMLA leave may be taken intermittently or on a reduced leave schedule. Employees may take leave intermittently or on a reduced leave schedule when medically necessary for their own serious health condition, to care for a parent, son, or daughter with a serious health condition, or to care for a covered service member with a serious injury or illness. Intermittent or reduced leave to care for a newborn or newly adopted child or a child placed in foster care may be taken only if the employee and his/her supervisor agree to the arrangement in advance of the commencement of such leave. Family Medical Leave Act (FMLA) Policy Page 3 of 7
9 Procedure for Requesting Leave All employees requesting leave under this policy must provide notice for the need for leave to Human Resources. Human Resources will notify the employee and the employee s supervisor of whether the leave is approved or denied. If an employee s need for FMLA leave is foreseeable based on an expected birth, placement for adoption or foster care, a planned medical treatment for a serious health condition of the employee or of a family member, or the planned medical treatment for a serious injury or illness of a covered service member, an employee must provide his/her supervisor with 30 days advance notice in writing before the date on which the leave would begin. If the employee is unable to provide 30 days notice, he or she must provide notice as soon as practicable. For foreseeable leave due to a qualifying exigency, an employee must provide notice of the need for such leave as soon as practicable, regardless of how far in advance such leave is foreseeable. If the need for leave is foreseeable based on planned medical treatment, employees are required to make a reasonable effort to schedule the treatment so as not to disrupt unduly the operations of DORAE. If the need for leave is not foreseeable, the employee must provide notice as soon as practicable. In all cases, employees must provide sufficient information for DORAE to determine whether the leave requested is FMLA-qualifying. F Medical Certification Advance Notification: Employees are required to provide medical certification of their own serious health condition or that of a family member. Such certification is required in a timely manner, and must be provided within 15 calendar days after DORAE s request for such information. Failure to provide adequate certification may result in delay of leave until the required certification is provided. If medical certification is never provided, the leave does not qualify as FMLA leave. Return to Work: Before returning to work, employees who have taken FMLA leave for their own serious health condition are required to present documentation from their health care provider certifying that they are able to return to work. C. Employment and Benefits Protection Employees will continue to receive health and/or dental benefits under the same terms and conditions as if they were on the job while on approved continuous or intermittent FMLA leave. Employees are required to pay their portion of the premium (either through payroll deduction or payment by mail as of the first of each month) while on approved FMLA leave. Coverage will cease if an employee s premium Family Medical Leave Act (FMLA) Policy Page 4 of 7
10 payment is more than 30 days late. If the health care premium is overdue for 15 days, Human Resources will notify the employee that their health insurance coverage will terminate if the premium is not received within the next 15 days. For employees who contribute to other benefits (e.g., supplemental life insurance), DORAE will continue making payroll deductions while the employee is on paid leave. If the leave is unpaid, employees may request continuation of these benefits during the leave and arrange payment options with Human Resources. Employees who provide a statement or notice of their intent not to return to work may be eligible for continuation of health and/or dental benefits under certain circumstances. With the exception of several circumstances, employees who fail to return from FMLA leave once their leave entitlement has been exhausted or expires, must repay the employer s share of health and/or dental coverage premiums incurred during the leave. An employee (other than a key employee) returning from FMLA leave will return either to the same position he or she had before his or her leave commenced or to an equivalent position with equivalent pay, benefits and other terms and conditions of employment. Key employees may not be eligible for reinstatement to the same or an equivalent position. H. Definition of Terms H.1 Key Employee: Refers to salaried employees who are among the highest paid 10 percent of employees within 75 miles of the work site. These employees may be denied reinstatement after FMLA leave if necessary to prevent substantial and grievous economic injury to the employer s operations. These employees must be notified by the employer of their status prior to a leave if there is any chance the employer may deny them reinstatement after the leave. H.2 Spouse: Unmarried domestic partners do not qualify for family leave to care for their partners. H.3 Parent: Does not include in-laws. H.4 Serious Health Condition: This is defined as an illness, injury, impairment, or physical or mental condition which involves: Inpatient care, meaning an overnight stay in a hospital, hospice or residential care facility, including any period of incapacity or any subsequent treatment in connection with such inpatient care; or Continuing treatment by a health care provider, meaning an incapacity of more than three consecutive calendar days; and Family Medical Leave Act (FMLA) Policy Page 5 of 7
11 o o two or more treatments within 30 days of the first incapacity, unless extenuating circumstances exist, by a health care provider, by a nurse or physician s assistant under direct supervision of a health care provider, or by a provider of health care services (e.g., physical therapist) under orders or referral of a health care provider; or treatment by a health care provider on at least one occasion, which results in a regimen of continuing treatment under the supervision of the health care provider (e.g. prescription medication); or Any period of incapacity because of pregnancy or for prenatal care; or Any period of incapacity or treatment for an incapacity because of a chronic serious condition which continues over an extended period of time, requires periodic visits to a health care provider, and may cause episodic periods of incapacity (e.g., asthma, diabetes, migraine headaches); or Any period of absence to receive multiple treatments (including recovery from those treatments) by health care providers or by a provider of health care services (under order or referral of a health care provider) for restorative surgery or for a condition that would likely result in a period of incapacity of more than three consecutive calendar days if untreated (e.g. cancer [chemotherapy], severe arthritis [physical therapy], kidney disease [dialysis]); or Any period of incapacity which is permanent or long-term due to a condition for which treatment may not be effective (e.g. Alzheimer s, severe stroke, or the terminal stages of a disease). H.5. Health Care Provider refers to: MD or OD licensed by the state (or country) in which he or she practices Podiatrists, dentists, clinical psychologists, optometrists, chiropractors (limited to treatment consisting of manual manipulation of the spine to correct a sublimation as demonstrated by X-Ray to exist) Nurse practitioners and nurse-midwives authorized under state law Christian Science practitioners (may be required to submit to examination [though not treatment] to obtain a second or third certification from a health care provider other than a Christian Science practitioner) Clinical social workers A health care provider who practices in a foreign country (in accordance with the laws of that country) Any other health care provider from whom the employer or the employee s group health plan will accept certification of the existence of a serious health condition to substantiate a claim for benefits H.6 Equivalent Position refers to jobs that involve the same or substantially similar duties, responsibilities, skills, effort, authority and privileges. Employees should be returned to the same work site (or geographically proximate work site) from which he or she commenced leave or to a nearby one and to the same shift or equivalent schedule. Employers do not have to give returned employees preferential treatment when faced with reductions in force, elimination of shifts, or cutbacks in overtime work benefits. Family Medical Leave Act (FMLA) Policy Page 6 of 7
12 I. Additional Information Employees who have questions regarding this policy should contact the Human Resources Department. Family Medical Leave Act (FMLA) Policy Page 7 of 7
13 ROMAN CATHOLIC DIOCESE OF ROCHESTER Classification of Workers Policy Issued by: Rev. Joseph A. Hart, V.G. Date Issued: October 29, 2010 KEY POLICY STATEMENTS: This policy provide the definitions for classifying workers: o Independent Contractor vs. Employee o Exempt Employee vs. Non-Exempt Employee Failure to classify a worker correctly can subject the employer to audits and fines from government agencies as well as legal challenges from workers. A 20 question test is attached to assist you correctly classifying workers as either an independent contractor vs. employee. APPLIES TO: The Diocese of Rochester and its affiliated employers. DETAILS: Worker classification The IRS has established tests to determine whether a worker is an independent contractor or an employee. Diocesan entities must use the attached 20-Factor Common Law Test to determine if a worker is an employee or an independent contractor. This must be performed for any independent contractor and be approved by the Pastor/Pastoral Administrator/Director. Risks of worker misclassification Classification of Workers Policy Page 1 of3
14 A misclassified worker can trigger an audit by various state and federal agencies, such as the Internal Revenue Service (IRS), Department of Labor (DOL), Occupational Safety and Health Administration (OSHA), National Labor Relations Board (NLRB), or Equal Employment Opportunity Commission (EEOC). Audit triggers include: Claim for unemployment Claim for workers compensation FLSA claim (e.g. unpaid overtime) EEOC claim (e.g. discrimination in employment) Wrongful discharge Form 1099-MISC and Form W-2 issued by the same organization for the same worker in the same year. If you have this situation it may be a significant issue, please contact the Diocesan Chief Financial Officer or Director of Human Resources immediately.. A worker receiving only one Form 1099-MISC in a year. Additionally, a worker may claim that he or she was misclassified as an independent contractor and denied benefits, overtime pay, etc. Therefore, it is critical that workers be properly classified in order to avoid legal challenges, employment tax liability and potential fines. Independent contractor definition and its implications The IRS classifies a worker as an independent contactor as follows: 1. An independent contractor is an individual or business that provides services to another individual or business. The independent contractor is a separate business entity and is not considered an employee. For example, if you hire a maintenance company to clean your office, the company is an independent contractor. 2. The employer is not required to withhold payroll taxes from payments made to an independent contractor. Employers are also not required to pay a matching amount of social security and Medicare taxes and do not pay state and federal unemployment tax. At the end of the year, payments to independent contractors are reported on a Form 1099-MISC as miscellaneous income. 3. Independent contractors are not eligible for employer benefits. Employee definition and its implications The IRS classifies a worker as an employee as follows: 1. In general, anyone who performs services for an organization is an employee if the organization can control what will be done and how it will be done. Additional factors designating someone as an employee include behavioral control, financial control and type of relationship. Classification of Workers Policy Page 2 of 3
15 2) Employers are required to withhold payroll taxes from employees wages. Payroll taxes include federal taxes, state taxes, FICA taxes and Medicare taxes. Employers are also required to pay a matching amount of Social Security and Medicare taxes for their employees and to pay state and federal unemployment tax. At the end of the year, employees wages and taxes are reported on a Form W-2, Wage and Tax Statement. 3) Employees have rights from federal and state laws that over time have established various rules which govern the employer-employee relationship. For example, the Fair Labor Standards Act requires tracking of hours worked for nonexempt employees and overtime pay for all hours worked over 40 hours in a workweek. 2. Employees may not perform the same type of work for their employer as both an employee and a self-employed worker. For example, the maintenance person cannot perform additional maintenance work for the employer as an independent contractor. 4) Employees are eligible for employer benefits under certain circumstances. Exempt Employee vs. Non-Exempt Employee Definitions What differentiates and Exempt Employee from a Non-Exempt Employee is compensation AND job functions. Exempt Employee: Must have a salary of not less $455 per week AND fall into one of the exemption categories below: Executive manages the organization or a department Administrative performs non-manual work directly related to management of business operations Professional performs that is predominately intellectual Computer Professional -- designs, develops, documents, analyzes, creates, tests, or modifies computer systems or programs Non-Exempt Employee: An employee compensated less than $455 per week OR not falling into fall into one of the exemption categories above. Exempt Employee vs. Non-Exempt Employee Implications Employees in non-exempt jobs are covered by the overtime provisions of the act and must be paid overtime (at one and one-half times the regular rate) for all hours worked over 40 hours per pay period. Quite often Non-Exempt jobs are referred to as hourly and Exempt jobs are called salaried. While that is often the case, by the letter of the law, that is not always true. Classification of Workers Policy Page 3 of 3
16 ROMAN CATHOLIC DIOCESE OF ROCHESTER Notice and Acknowledgement of Pay and Payday Policy Issued by: Rev. Joseph A. Hart, V.G. Date Issued: December 2, 2009 Last Revised: August 15, 2013 KEY POLICY STATEMENTS The Diocese of Rochester and its affiliated employers comply with all aspects of the New York State Wage Theft Protection Act. The Diocese of Rochester and its affiliated employers must have each employee acknowledge their pay and payday at the time of hire and again each January. The templates for both salaried and hourly employees are attached. The employer must prepare one for each employee and have the employee sign the form to acknowledge receipt. Signed forms must be kept in the employees files for 6 years. APPLIES TO: The Diocese of Rochester and its affiliated employers Notice and Acknowledgement of Pay and Payday Policy Page 1 of 1
17 Diocesan Poilcy ROMAN CATHOLIC DIOCESE OF ROCHESTER Policy for Posting of Required Notices by Employers Issued by: Rev. Joseph A. Hart, V.G. Date Issued: February 16, 2004 Last Revised: June 4, 2012 KEY POLICY STATEMENTS Federal and State law requires that employers conspicuously post ALL of the attached documents. If you have multiple locations, you must post them at each location. APPLIES TO: All Diocesan Entities Policy for Posting of Required Notices by Employers Page 1 of 1
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