the new flsa change impacts flsa... · · 2016-10-31the new flsa change impacts presented by :...

The New FLSA Change Impacts

Presented By: Karen Baerlocher, Peak View Performance Solutions Breck Hansen and Jim Ritter, QTS Payroll

Legal Disclaimer The contents of this presentation and materials referenced are for informational purposes only and should not be construed as legal or tax advice. You are urged to consult an attorney or accountant concerning specific situations and questions.

ID Nonprofit Center Webinar - Presented by: PVPSolutions, LLC and QTS Payroll

Items to Cover New OT Rules Impacts to organizations Options for organizations Changes with your payroll practices and policies Implementation strategies Tips for communicating with employees Questions


New Rules Department of Labor released new rules for FLSA to take effect December 1, 2016

Exemption Salary Requirement – $47,476 (up from $23,660)

Highly Compensated Employee – $134,004 (up from $100,000)

Quarterly Bonuses and Commissions may count towards 10%

Increases again in 3 years

FLSA Terms Defined Workweek - A workweek is a period of 168 hours during 7

consecutive 24-hour periods. It may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of minimum wage and overtime payment, each workweek stands alone; there can be no averaging of 2 or more workweeks. Employee coverage, compliance with wage payment requirements, and the application of most exemptions are determined on a workweek basis.

Hours Worked - Covered employees must be paid for all hours worked in a workweek. In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal activity of the work day to the end of the last principal work activity of the workday. Also included is any additional time the employee is allowed (i.e., suffered or permitted) to work.


Exempt vs. Non-Exempt Status


Impacts of Reclassifications Budget Impacts New OT cost Salary Adjustments

Other “costs” Lower productivity Higher turnover Lower morale Employee unrest/dissatisfaction Management Time


Preparing workplace impacts Update all policies, procedures and job descriptions Benefits for exempt and non-exempt Flex time considerations Future recruitment and promotions Compensation impacts if making changes to salary


Document Process Pay attention to Accuracy Create your Audit trail Decision Support

If your organization is audited, you will want documentation

showing your analysis was done with a good faith effort.


Created by Peak View Performance Solutions, LLC

Payroll Changes

Begin tracking all non-exempt employee’s hours worked for recordkeeping compliance

Employees need training on new system and policies

Managers/Supervisors need to monitor time

Note - Create a check and balance system. Employee enters time worked and manager approves

Do you have the systems in place to

track time?


FLSA Record Keeping Requirements Record-keeping requirements for non-exempt worker Employers may use any timekeeping method they

choose The law requires this information to be accurate Employers must display an official poster outlining

the provisions of the Act Retention requirements See DOL Fact Sheet #21 for specific information


https://www.dol.gov/whd/regs/compliance/whdfs21.pdf


Implementation Audit all employee positions and begin implementing

changes Try out methods for recording employee hours Test out new procedures and systems now Allow for time to adjust


Communication Tips Consider the emotional impacts of the change Be clear and honest about the changes Open two-way communication Target the message Set expectations Tell employees what they need to do


Common Employee Questions How am I going to get all my work done in 40 hours? I don’t know how to track my hours, what do I do? How will this affect future promotions? How does this impact my paycheck? Can I still work from home? Am I being demoted?


Common Questions Q: For a non-exempt employee is a 30 min lunch included in the 40 hour work week? A: Although breaks promote the efficiency of workers, the Act does not require employers to grant rest periods. If an employer does grant rest periods or coffee breaks, those of a short duration of five to about 20 minutes must be counted as hours worked. Conversely, a 30-minute or longer break does not have to be compensated if the employee is completely relieved from duty for the duration of the break. Meal Periods - "Bona fide" lunch or meal periods are not work time. According to the regulations, for a meal period to be bona fide, it ordinarily must last at least 30 minutes and the employee must be completely relieved from duty, both active and inactive. If office or factory workers are required to eat at their desks or machines the time spent eating must be treated as hours worked. If meal periods are frequently interrupted by calls to duty, the entire period must be counted as hours worked.


Common Questions Q: For a non-exempt employee on a business trips what are the rules as far as paying for travel? Ex. An 9 hr hour conference followed by 4 hrs or travel in one day, what of that is paid? A: See DOL Fact Sheet #22 for more information Lectures, Meetings and Training Programs: Attendance at lectures, meetings, training programs and similar activities need not be counted as working time only if four criteria are met, namely: it is outside normal hours, it is voluntary, not job related, and no other work is concurrently performed. Travel Time: The principles which apply in determining whether time spent in travel is compensable time depends upon the kind of travel involved. Home to Work on a Special One Day Assignment in Another City: An employee who regularly works at a fixed location in one city is given a special one day assignment in another city and returns home the same day. The time spent in traveling to and returning from the other city is work time, except that the employer may deduct/not count that time the employee would normally spend commuting to the regular work site. Travel That is All in a Day's Work: Time spent by an employee in travel as part of their principal activity, such as travel from job site to job site during the workday, is work time and must be counted as hours worked. Travel Away from Home Community: Travel that keeps an employee away from home overnight is travel away from home. Travel away from home is clearly work time when it cuts across the employee's workday. The time is not only hours worked on regular working days during normal working hours but also during corresponding hours on nonworking days. As an enforcement policy the Division will not consider as work time that time spent in travel away from home outside of regular working hours as a passenger on an airplane, train, boat, bus, or automobile.



Common Questions Q: A non-exempt employee takes time off for a 1 hr medical appointment, do they have to make that time up to reach their 40 hrs or is there any type of coverage for those types of appointments? A: In general, “hours worked” includes all time an employee must be on duty, or on the employer’s premises or at any other prescribed place of work, from the beginning of the first principal activity of the work day to the end of the last principal work activity of the workday. The FLSA does not require payment for time not worked, such as vacations, sick leave or holidays. These benefits are matters of agreement between an employer and an employee. The time away from work.


Common Questions Q: If an exempt employee is converting to non-exempt, do they need to sign a new contract of employment? A: It is highly recommended that you have all employees sign acknowledgement forms for any changes that are made to policies and procedures. It is also recommended that you discuss expectations with employees and keep a record of that discussion. These acknowledgements and meeting documentation could be provided if needed in an audit, as discussed earlier in this presentation.


Common Questions Q: If an employee works less than 40 hours one week, can time be made up the next week? (Example: 36 hours worked first week, can 44 hour be worked the following week?) A: No. FLSA defines a workweek as, “a period of 168 hours during 7 consecutive 24-hour periods. It may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of minimum wage and overtime payment, each workweek stands alone; there can be no averaging of 2 or more workweeks. Employee coverage, compliance with wage payment requirements, and the application of most exemptions are determined on a workweek basis.”


Common Questions Q: How much overtime can be worked in a given week? Is there a cap? A: The FLSA does not limit the number of hours per day or per week that employees aged 16 years and older can be required to work. For covered, nonexempt employees, the FLSA requires overtime pay at a rate of not less than one and one-half times an employee's regular rate of pay after 40 hours of work in a workweek.


Common Questions Q: How do I know if my organization is covered under the FLSA guidelines? A: Neither the FLSA nor the Department’s regulations provide an exemption from overtime requirements for non-profit organizations. While some non-profits may not be covered under the FLSA, it is likely that many employees of non-profits are entitled to FLSA protections. For more information see: DOL Overtime Final Rule and the Non-Profit Sector


https://www.dol.gov/sites/default/files/overtime-nonprofit.pdf

Resource Links Department of Labor – Overtime Pay https://www.dol.gov/whd/overtime_pay.htm Overtime Final Rule and the Non-Profit Sector


Guidance for Non-Profit Organizations on Paying Overtime under the

Fair Labor Standards Act https://www.dol.gov/whd/overtime/final2016/nonprofit-guidance.pdf

Overtime Pay Fact Sheets https://www.dol.gov/whd/overtime/fact_sheets.htm

https://www.dol.gov/whd/overtime_pay.htm



https://www.dol.gov/whd/overtime/final2016/nonprofit-guidance.pdf

https://www.dol.gov/whd/overtime/final2016/nonprofit-guidance.pdf

https://www.dol.gov/whd/overtime/fact_sheets.htm

Questions?


Contact your local employment attorney Contact your local accountant Contact an HR Consultant Karen Baerlocher, SPHR, SHRM-SCP

208-608-6676 [email protected]

Idaho Nonprofit Center Business Index Payroll Assistance QTS Payroll Services, Inc.

208-921-1182 www.qtspayroll.com

Idaho Nonprofit Center Business Index

mailto:[email protected]

http://www.idahononprofits.org/business-index

http://www.qtspayroll.com/

http://www.idahononprofits.org/business-index

the new flsa change impacts flsa... · · 2016-10-31the new flsa change impacts presented by :...

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