FLSA: Final Rule THOMAS R. HEARD, MBA, MS ASSISTANT DIRECTOR OF HUMAN RESOURCES JESSICA NORTHCUTT HRIS/TRAINING MANAGER

FLSA: Final Rule THOMAS R. HEARD, MBA, MS ASSISTANT DIRECTOR OF HUMAN RESOURCES JESSICA NORTHCUTT HRIS/TRAINING MANAGER

What is FLSA? 2 The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. FLSA Minimum Wage: The federal minimum wage is $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage. FLSA Overtime: Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days. Hours Worked (PDF) : Hours worked ordinarily include all the time during which an employee is required to be on the employer s premises, on duty, or at a prescribed workplace. Source: https://www.dol.gov/whd/flsa/

What is the final rule? 3 The Final Rule focuses primarily on updating the salary and compensation levels needed for Executive, Administrative and Professional workers to be exempt. Specifically, the Final Rule: Sets the standard salary level at the 40th percentile of earnings of full-time salaried workers in the lowest-wage Census Region, currently the South ($913 per week; $47,476 annually for a full-year worker); Sets the total annual compensation requirement for highly compensated employees (HCE) subject to a minimal duties test to the annual equivalent of the 90th percentile of full-time salaried workers nationally ($134,004) Source: https://www.dol.gov/whd/overtime/final2016/

What is the final rule? 4 Establishes a mechanism for automatically updating the salary and compensation levels every three years to maintain the levels at the above percentiles and to ensure that they continue to provide useful and effective tests for exemption. Additionally, the Final Rule amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level. The effective date of the final rule is December 1, 2016. The initial increases to the standard salary level (from $455 to $913 per week) and HCE total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020. Source: https://www.dol.gov/whd/overtime/final2016/

What does this mean for me? 5 To see how this will effect you, lets first look at some key definitions Exempt Employee - An employee who is excluded from FLSA protection and thus does not receive overtime. Non Exempt Employee - An employee who is subject to FLSA regulations and must be compensated for any work over 40 hours. The effective compensation rate is 1.5 x hourly wage. Comp Time - Time taken that is gained for working over the standard work week. Standard work week at TTU is 37.5 hours (varies by position). Overtime/Comp time and a half would not begin until 40 hrs is surpassed. Flex Time - Comp time that is used to take leave

What does this mean for me? 6 In order to ensure compliance with the new federal regulations, TTU examined all positions on campus. A plan was submitted and approved to reclassify and reorganize positions to ensure compliance. The reclassification will have several impacts Reclassification from exempt to non exempt (Administrative/Professional - Clerical/Support) Record keeping and timesheet submittal Benefits will remain the same

RECLASSIFICATION: Exempt to Non- Exempt 7 Example: Tom currently has a title of Manager. Tom does not supervise staff, and he does not make policy decisions or those that have a direct impact on the unit. Tom will be reclassified from administrative professional to C&S. This reclassification may bring about a title change, but Tom will now be eligible for comp/overtime after working over 40hrs per week.

RECLASSIFICATION 8 All non-exempt employees must maintain 37.5 hours worked per week. Employees who are non-exempt must remain at 37.5 hours and should not exceed the set time. Supervisors are responsible for monitoring all time worked by employees.

Hours Worked Examples 9 Checking email outside of work- This is considered paid time. This time must be recorded on the monthly timesheet Traveling for university business Travel policies are currently being revised and will be posted prior to December 1.

Record Keeping And Timesheet Submittal 10 Employees who have been reclassified from Administrative/Professional to Clerical/Support, will now be required to submit monthly timesheets. Supervisors will be responsible for management of employees comp/overtime accrual. HR will be assisting supervisors with preparing for record keeping of time as the transition occurs.

Leave Reporting Refresher TRANSITIONING FROM ADMINISTRATIVE TO CLERICAL & SUPPORT (C&S) STAFF

Leave reporting differences 12 Administrative employees: C&S Employees: Report only leave taken Report hours worked and leave taken Different earning rows Different Earning Rows Do not earn comp time except on holidays Can earn comp time any day

Administrative Leave Reports 13 Earning Rows

C&S Leave Reports 14 Earning Rows

Earning Row Comparison 15 Administrative Clerical & Support Regular Hours Worked C&S Staff must record all regular, scheduled time worked in this row. Holiday Pay All university approved holidays are recorded on leave reports as Holiday Pay instead of Regular Hours Worked. Overtime 1.0/1.5 Time worked in addition to your normal schedule. Comp 1.0/1.5 Extra time off accrued while working in addition to your normal schedule.

What is Overtime & Comp Time? 16 *Reminder* You must get prior approval from a supervisor in order to work past your normal schedule and receive overtime or compensatory time. Overtime is received as additional pay on an employee s paycheck. Compensatory time is received as additional leave (or time) that should be taken within the same month it was earned. Both overtime and comp time are accrued by working in addition to one s normal schedule. Only C&S (non-exempt) employees are typically eligible to receive OT or Comp.

Comp/OT 1.0 vs 1.5 17 OT or Comp 1.0 is typically referred to as straight time, while OT or Comp 1.5 is referred to as time and a half. You receive 1.5 (time and a half) if you work in excess of 40 hours per week. The work week is defined as Monday through Sunday. Only actual time worked is included in the weekly calculation.

How to calculate: Example 1 18 Example 1: Mary is a C&S employee that has worked her normal 7.5 hour shifts on Monday, Tuesday, Wednesday, and Thursday. She worked an extra 2 hours on Friday and worked 4 hours on Saturday. How should she put this on her leave report? Mary would add 7.5 hours in the Regular Hours Worked row for each day, Monday through Friday. She would add 2 hours to Comp 1.0 on Friday and 0.5 hours of Comp 1.0 and 3.5 hours of Comp 1.5 for Saturday. Mary must work 40 hours before getting time and a half (1.5). Two hours on Friday added to a half hour on Saturday reached the 40 hour mark. Any time she worked after that was time and a half (1.5).

How to calculate: Example 2 19 Example 2: Joe normally works Tuesday through Saturday from 8 4:30 pm. He worked his normal shifts on Wednesday through Saturday, but took annual leave on Tuesday. He was called in on Sunday to work from 8 4:30pm. How does he report Sunday on his leave report? Since Joe was out of the office on Tuesday for leave, he only actually worked 37.5 hours for the week (Wednesday-Sunday). He would add 7.5 hours to Comp 1.0 for Sunday. He would get his normal pay for Tuesday Saturday and then have 7.5 hours of Comp time to use before month end. He did not get paid time and a half (1.5) for Sunday because he did not actually work the full week as he took leave.

How to calculate: Example 3 20 Example 3: Marcus normally works Monday Friday from 8 4:30pm. Monday was a holiday, he worked Tuesday through Friday, and also worked six hours on Saturday. How would he record this on his leave report? He would enter 7.5 hours in Holiday Pay for Monday, 7.5 hours in Regular Hours Worked for Tuesday-Friday, 2.5 hours in Comp 1.0 & 3.5 hours in Comp 1.5 for Saturday. *Reminder* University approved holidays are considered actual time worked (leave days are not). Comp 1.0/1.5 could be OT 1.0/1.5 instead if employee is being paid out and OT is previously approved by the department.

Quick Tips: Copy Feature 21 The copy feature can be used to copy the same time or leave amount into multiple days. In order to use it, simply click on the Enter Hours link to enter time for the appropriate day. After entering your hours worked, click the Copy button.

Quick Tips: Copy Feature 22 You can select each day you would like to enter that same time in, or you can check one box to enter it from Monday Friday for every week of that month.

Quick Tips: Buttons 23 Position Selection: toggle between different positions you have had at the university Comments: enter important comments to be viewed by your supervisor and/or payroll Preview: preview entire report before submitting Submit for Approval: leave report is complete and ready to approve Restart: clears entire report, no changes saved Next: navigational buttons, used to go forward to next week

In Summary 24 What Changes? Switch from Admin to C&S leave report New earning rows: Regular Hours Worked, Holiday Pay, Comp 1.0/1.5, and OT 1.0/1.5 Must report both time worked and leave taken Supervisor pre-approval required for Comp or OT When do the changes take effect? Leave report switch official as of December 1 st (effective for December leave reports).

Quick Info 25 Leave reminders emailed to all approvers monthly Support email leavehelp@tntech.edu https://www.tntech.edu/planning-and-finance/hr/leave Leave Deadline Calendar Leave FAQs Special instructions updated monthly