FAIR LABOR STANDARDS ACT BASICS

Transcription

1 FAIR LABOR STANDARDS ACT BASICS

2 Objective Background Requirements Exempt v. Non-Exempt Compensable Time Violations Penalties

3 Background The Fair Labor Standards Act (FLSA) was enacted in Establishes standards affecting employees in private and public sector Minimum Wage Overtime Pay Recordkeeping Youth Employment

4 Why You Need to Know Wage and hour issues are critical to the operations of our organization FLSA affects employee compensation YOU play an important role in COMPLIANCE

5 FLSA Does Not Require Vacation, Holiday, Severance or Sick Pay Meals or Rest Periods Premium Pay for Weekend or Holiday Work Pay Raises Immediate Payment if Separated

6 Minimum Wage Requirement Covered, Non-Exempt Employees must be paid at least the minimum wage for all hours worked Effective July 24, 2009, the minimum wage was established at $7.25

7 What is a Work Week? A work week is 7 consecutive 24 hours periods. USC s work week begins at 12:01 am Sunday and ends at midnight the following Saturday. Each work week stands by itself in determining overtime compensation for Non- Exempt employees.

8 Exception to the Work Week USC s Law Enforcement employees may work a variable schedule 28-day work period (171 hours) that begins at 12:01 am Sunday and ends 28 day later at midnight.

9 Who is Covered? Most Employees in the United States are Covered by the FLSA Examples of Employees Not Covered Prisoners Elected Officials Political Appointees Bona Fide Volunteers

10 Under FLSA, Employees are considered Non-Exempt Exempt

11 Non- Exempt Minimum Wage Exempt Do not Earn Overtime Overtime (Compensatory Time) Paid to get the job done no matter how many hours worked in a work week Recordkeeping Paid for the hours worked

12 What Determines if a Position is Exempt or Non-Exempt? Salary Test Currently, employees paid less than $23,660 per year ($455 per week) are non-exempt New rule effective December 1, 2016 for $47,476 per year ($913 per week) Duties Test Permits positions to be considered Exempt by performing high level of work Falls into Executive, Professional or Administrative, Computer Professional or Highly Compensated Categories Job Titles do not determine Exempt Status

13 Who at USC determines the exemption status of positions? The Classification and Compensation Area of the Division of Human Resources determines exemption status of positions system wide for USC.

14 Executive Duties Test Regularly supervises two or more full-time employees, and Management is the primary duty of the position, and Genuine input into the hiring, firing, promotions, discipline or assignments of other employees.

15 Professional Duties Test May be learned or creative professional Learned professional: Requires advanced knowledge in a field of science or learning Predominantly intellectual Acquired by a prolonged course of specialized instruction

16 Professional Duties Test Creative Professional: Primary duty must be the performance of work requiring invention, imagination, originality, or talent Performs work in a recognized field of artistic or creative endeavor

17 Administrative Duties Test Primary duty must be office or non-manual work; and Directly related to management policies or general business operations; and Customarily and regularly requires the exercise of discretion and independent judgment

18 Computer Professional Test Employed as a computer systems analyst, programmer or software engineer or similar skilled worker Primary duties consist of: Applications of systems analysis techniques; Design, development, documentation, analysis, creation, testing, or modification of computer systems or programs; Design, documentation, testing, creation, or modification of computer programs related to machine operating systems; or Combination of the above, which requires same skill level.

19 Highly Compensated Employee Test Must perform non-manual work and Paid more than $100,000 per year and Perform at least one of the duties of an executive, administrative or professional employee Note: New salary threshold of $134,004 per year will be effective December 1, 2016.

20 Non-Exempt Employees Do not meet the Salary Test of $455/week or the Duties Test of Executive, Professional, Administrative, Computer Professional or Highly Compensated Employee Note: New rule has the salary test changing to $913/week or $47,476/year.

21 Non-Exempt Employees (cont.) Must receive 1 1/2 times their regular rate for all hours worked in excess of 40 in a work week (unless Law Enforcement) Hours worked included only those hours actually worked. Example: Sue records 45 hours worked in a work week but 8 of those hours are due to a holiday, so no overtime is paid.

22 Non-Exempt Employees (cont.) FLSA allows State Government to use compensatory time in lieu of overtime pay. Compensatory time gives the employee leave that can be used in the future. Compensatory time must be accumulated at 1-1/2 times overtime hours.

23 Non-Exempt Employees (cont.) USC has a policy where all unused compensatory time is paid out at the end of the fiscal year. Non-Exempt employees are paid out unused compensatory time at the time of separation from USC. Non-Exempt employees must use or be paid out their compensatory time if they move to an Exempt position.

24 What is Compensable Time for Non-Exempt Employees? All time employees are required to be on duty or at a prescribed workplace and permitted to work. Includes work performed on or away from premises if supervisor knows or has reason to believe work is being performed.

25 What is Compensable Time for Non-Exempt Employees? (Cont.) Unauthorized work Employees who arrive to work early and start working. Employees who work through lunch. Required to attend training, lectures, meetings, etc.

26 What is Compensable Time for Non-Exempt Employees? (Cont.) Travel time during regular working hours as well as during corresponding hours of nonworking days. Required to remain on premises or prescribed workplace, or must remain accessible to the point the employee may not use his/her time for own purposes.

27 Violations to FLSA U.S. Department of Labor enforces FLSA Burden of proof is on the employers Employees can sue their employers for the recovery of back wages & liquidated damages for up to 3 years if violation is found to be willful Employers cannot retaliate against employees for whistle blowing

28 Penalties from DOL Unpaid wages (2-3 years of back wages) Fines ($10,000) Imprisonment (6 months) Liquidated damages (2x) Attorney s fees and costs Individual liability

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30 Contacts Belinda Ogorek Rontreal Tyler