Important DOL Rule Changes: What Counties Need to Know

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Important DOL Rule Changes: What Counties Need to Know Mary Ann Saenz-Thompson, SPHR, SHRM-SCP Texas Association of Counties Human Resource Consultant

Disclaimer This training is designed to provide general information about the subject matter covered. Neither TAC nor the trainers are engaged in rendering legal advice. If you need legal advice, TAC recommends that you seek the services of a competent attorney who is familiar with your specific situation.

Objectives Define employee classifications Discuss how DOL changes will affect those classifications Discuss what employers should to comply with these changes Understand what a job description is, the value of a job description, how they are used, and how job descriptions can help comply with various laws and regulations.

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. Fair Labor Standards Act Source: http://www.dol.gov/whd/flsa/

What is the DOL doing? Issued new regulation for the salary level of exempt employees Regulation HAS PASSED New rules effective: DECEMBER 1, 2016

The Final Rule to Update Exempt Employee Regulations Released May 18, 2016 Key provisions effective 12/1/16: Required standard salary level of $47,476/year or $913/week. Highly compensated employees salary of $134,004. Establishes a mechanism for updating the new salary levels every 3 years beginning 1/1/20 No changes to the duties test.

What now? What Now? Get Prepared

Employee Classifications Non-Exempt Employees earn overtime Exempt Employees do not earn overtime Elected Officials are not defined as employees under the FLSA. (see FLSA 553.11)

Examples of Non-Exempt Deputy Clerk, Accounting Clerk Maintenance Dispatcher Deputy Sheriff Detention Officer Equipment Operator Court Reporter LVN

Non-Exempt Requirements Overtime must be paid for actual hours worked over 40 hours in a workweek. Workweek is 7 consecutive 24 hour days (168 consecutive hours) You must identify the workweek Paid leave is not counted as work time Each 7 day work week stands alone Overtime pay is 1 ½ x regular rate per overtime hour worked over 40.

207(k) Exemption For Law Enforcement Under the FLSA C.F.R. 553.211 Deputy Sheriffs, Deputy Constables, and Security Personnel in a Correctional Institute have a partial overtime exemption. Court must adopt - not self executing. Must set work period not greater than 28 days and 171 hours

Exempt Employees Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees who are employed in a bona fide capacity of: Executive Administrative Learned Professional Computer (hybrid) Highly Compensated - $100,000 (134,004 12/01/2016)

Three Tests for Exemption Salary Level If this is not met; automatically a non-exempt employee entitle to overtime pay. Salary Basis salary free and clear from deductions Job Duties usually administrative in nature apply the included test to be sure

Salary Level Test The minimum salary level must be:» Current 12/01/16 Annually: $23,660.00 $47,476.00 Monthly: $ 1,971.66 $ 3,956.33 Bi-Weekly: $ 910.00 $ 1,826.00 Weekly: $ 455.00 $ 913.00

Salary Basis Test Must be paid Free and Clear Employee must receive a predetermined amount of pay each pay period Pay cannot be reduced because of quantity or quality of work performed

Elected Officials and Personal Staff Exemption Confusion created by the Elected Officials and Personal Staff Exemption: Economic Realities/Control Test For Determining Employment Relationship (1) Control (most important prong) focus is on whether the alleged employer had the right to: hire and fire employee supervise the employee set the employee s schedule. (2) Economic Realities focuses on whether the alleged employer: paid the employee s salary withheld taxes provided benefits set terms & conditions of employment

Personal Staff Exemption 6 Factor Test: 1)Whether Elected Official has power to hire or fire 2)Whether the employee is personally accountable only to the elected official 3)Whether the employee represents the elected official in the eyes of the public 4)Whether the elected official has considerable amount of control over the employee 5)The location of the employee s position in the chain of command 6)The closeness or intimacy of the work between the Elected Official and the employee. Teneyuca v. Bexar County, 767 F.2d 148 (5th Cir. 1985) (Title VII case)

Effect of Improper Deductions An actual practice of making improper deductions from salary will result in the loss of the exemption: During time period in which improper deductions were made For all employees in the same job classification Isolated or inadvertent improper deductions will not result in loss of exempt status if the employer reimburses the employee, if employer has a safe harbor policy.

Safe Harbor Policy Exemption will not be lost if the employer: Has a clearly communicated policy prohibiting improper deductions including a complaint mechanism; and Reimburses employees for all improper deductions; and Makes a good faith commitment to comply in the future. Safe harbor is lost if the employer willfully violates the policy by continuing to make improper deductions after receiving employee complaints.

Practices That Do Not Violate Salary Test Taking deductions from exempt employees accrued leave accounts Requiring exempt employees to keep track of and record their hours worked Requiring exempt employees to work specified schedules Implementing bona fide, across the board schedule changes

Other Potential Problems Non Elected Supervisors now make more than Elected Officials who supervise them not against the rules Misclassifying a position as exempt when it is non-exempt - the liability is owing overtime for a minimum of 2 years when misclassification is identified Use the three factor test; be honest Involve subject matter experts; HR; County Attorney The new salary threshold will be tied to an index that will automatically change every 3 years First increase is 1/1/2020 (likely in the $51,000 range)

Highly Compensated Must be paid over $134,004 annually (12/1/16) Whose primary duty includes office or non-manual work and who customarily and regularly performs any one or more of the exempt duties of an executive, administrative or professional employee identified in the regulations

Information More information can be found at Information contained in this presentation can be found on the Department of Labor Website.

Value of Job Descriptions A job description is a written description of a job. Includes the information regarding the general nature of the work to be performed. Describes specific responsibilities, duties, tasks, and functions.

Value of Job Descriptions Outlines the details of who does what type of specific work. Outlines how the work is done. Outlines purpose and frequency of work as it relates to the department s mission and goals.

Why Have Job Descriptions Recruitment tool Determining salary levels Establishing titles and pay grades

Why Have Job Descriptions? Career planning and training uses Gives clear direction to the employee Supervisor s tool to measure performance

The Value of Job Descriptions Family Medical Leave Act WH-380E Fair Labor Standards Act exempt or nonexempt status Equal Employment Opportunity Workers Compensation (process) Unemployment Costs

Compliance issues The Americans with Disabilities Act does not require job descriptions; but Job Descriptions help define the essential job functions in writing and can help with reasonable accommodation issues, hiring, and future employment decisions.

What now? What Now? Get Prepared

Questions

Human Resources Consultants Michele Arseneau 512-461-1667 michelea@county.org Diana Cecil 512-924-6360 dianac@county.org Rollie Ford 512-680-1994 rollief@county.org Mary Ann Saenz-Thompson 512-921-9056 maryanns@county.org Member Service Elizabeth Sutherland elizabeths@county.org 1-800-456-5974