Frequently Asked Questions. Fair Labor Standards Act 2016 Ruling

Transcription

1 Frequently Asked Questions Fair Labor Standards Act 2016 Ruling What is the Fair Labor Standards Act? The Fair Labor Standards Act (FLSA) of 1938 (29 USC Ch et seq.) is the United States federal wage and hour law, administered by the US Department of Labor. Among other things, it establishes the minimum wage and overtime pay, affecting employees in the private and government sectors. Everyone is covered but some employees are exempt from FLSA regulations and some are nonexempt. The FLSA requires one-and-one-half times the regular rate of pay in Overtime or Compensatory time be paid for all hours worked over 40 in a workweek for nonexempt employees. Each seven-day workweek begins at 12:00 a.m., Sunday and ends at 11:59 p.m., Saturday. What does it mean to be exempt or nonexempt? Exempt employees are excluded from the overtime pay requirements under the Fair Labor Standards Act. Non-exempt employees are paid overtime for time worked in excess of 40 hours in any workweek. What is changing with the new Fair Labor Standards Act (FLSA) ruling? The Department of Labor (DOL) has raised the minimum salary for an employee to be designated as exempt from $23,660 ($455 per week) to $47,476 per year ($913 per week). This means anyone (other than those that meet specific exemptions) will be transitioned to hourly pay and paid through the bi-weekly hourly payroll. Why are the regulations changing? The existing thresholds were set by the federal government in In , the DOL re-evaluated the thresholds and determined they should be increased. When will these changes become effective? The new requirements will take effect for the hourly pay period beginning November 27, 2016.

2 Who will be impacted by the change? Impacted employees include all current exempt employees whose base pay is below $47,476 ($913 per week). Can an exempt employee opt out of this change? No, the exemption criteria are federal law. An employee and employer cannot agree to waive any of the law s requirements. Will switching from exempt to nonexempt impact a current employee s vacation accrual? No. This regulatory change will not change vacation accruals for any employee hired prior to November 27, Those hired on or after November 27, 2016 will accrue their vacation at the nonexempt accrual schedule. When will impacted employees be notified of how the impending regulations will affect their position? Human Resources is working with division and department leaders to review every impacted position. Impacted employees will be individually notified in October of how the impending regulations will affect their position. I have an exempt employee who will become non-exempt. Do I need to process a personal action form to change that person s FLSA status? No. Upon implementation all employees who are affected will be automatically converted. How will employees be notified of a change in their exemption status? Supervisors of affected employees will be provided guidance on how to communicate the change to each employee. Additionally, all affected employees will receive direct communication in the form of a letter. Employees who become non-exempt will receive a new letter of appointment that contains their hourly wage and an explanation of the transitioning payrolls.

3 Who is responsible for authorizing and scheduling overtime? Supervisors are responsible for ensuring non-exempt employees are informed they may not work overtime without prior approval. The approval of overtime mechanism or process (verbal or written) will be subject to management s discretion. Nonexempt employees are responsible for obtaining supervisor approval prior to scheduling and working overtime, and managers will need to work with their senior leadership to request funding for overtime, if necessary. Non-exempt employees may be requested to work overtime by their supervisors. If an employee works overtime without having obtained prior approval from his/her supervisor, do they still have to receive overtime pay? Yes. According to the FLSA, non-exempt employees must be compensated for all hours worked. However, as long as the supervisor has clearly communicated the preapproval requirement, failure to gain pre-approval may be addressed through the disciplinary process to prevent future occurrences. In that case, supervisors should work closely with Human Resources. If an employee, on their own, performs work beyond 40 hours per week (such as checking or responding to work or texts or listening to messages, etc.), does that count as time worked? Yes. All work-related activities must be reported as time worked. Employees may not volunteer their time and supervisors may not instruct or allow employees to do so. It will be important for supervisors to establish expectations of their employee so there are no misunderstandings. Do UNE Holidays count as hours worked when calculating overtime/ compensatory time? Yes, although this is not required by the FLSA, UNE holidays (excluding floating holidays) are included in the calculation of overtime. (Please refer to UNE s overtime policy in the Personnel Handbook on Pg. 18)

4 Is a nonexempt employee eligible for comp time? Compensatory time (Comp Time) is only available to government employees. Comp time is not allowed at the University of New England. However, employees are allowed and encouraged to adjust their schedules during a particular work week to compensate for extra hours worked. A supervisor may allow an employee to adjust time in lieu of overtime ONLY when this time is taken within the same work week in which the extra hours were worked. The UNE workweek is Sunday through Saturday For Example: A supervisor knows that their employee is working an evening that will extend their hours above 40 hours for that particular week. The supervisor can request or require that the employee reduce their hours on another particular day of that same week to reduce or eliminate the amount of overtime pay that would be paid. The supervisor also has the authority to deny an employee s request to reduce their hours that particular week due to the needs of the department and pay the overtime pay if hours exceeded 40 hours. Doesn t the term nonexempt mean non-professional? No, nonexempt simply means that the position is eligible to receive overtime pay. I have been told I will be changing from exempt to non-exempt. What does that mean for me? As a non-exempt employee, you must receive compensation for all hours worked. If you work extra hours above your normal work schedule, but do not exceed 40 hours per week, you will receive additional hourly pay at your regular hourly rate. However, if you work more than 40 hours in a workweek, you will receive overtime pay at 1.5 times your normal rate for the additional hours worked in excess of 40. You must receive approval from your supervisor before you work any extra hours. The UNE work week is Sunday through Saturday.

5 What are my responsibilities as a non-exempt employee? Report your exact work hours on your timesheet each day. Submit your time sheet to your supervisor for signature approval and ensure that payroll receives your time sheet according to the payroll schedule. Obtain prior approval from your supervisor before working extra hours above your normal work schedule. How do I report my hours? Non-exempt employees must report their worked hours for each day on a bi-weekly timesheet. Human Resources and Payroll will be providing guidance and training on the payroll process. Is my supervisor able to limit my work communication (e.g., checking or responding to work-related s or texts) outside of work hours? Yes. You must first receive approval from your supervisor to work any hours that are above your regular work schedule, especially if you will plan to work more than 40 hours in a week. Work includes checking or responding to work-related s, texts and checking phone messages. If your supervisor expects you to be available or to respond to s, phone calls, or other communications outside of your scheduled work hours, supervisor how you must account for that time on your timesheet. As a non-exempt employee, am I permitted to work extra hours not get paid? No. You must document all time you spend working, and you must be compensated for that time. What should I do if I am told or feel pressured to not report all the hours I work by a supervisor? Please contact Human Resources immediately.

6 What can I count as compensable work time under FLSA? In addition to your regularly scheduled hours, work time may include overtime, certain types of travel time, training time, and shift preparation/transition time. How does becoming non-exempt benefit me as an employee? As a non-exempt employee You are compensated for every hour you work. If you work more than 40 hours in a workweek, you are paid 1.5 times your base pay for overtime hours worked. What resources are available to help supervisors communicate the changes to the FLSA threshold? Supervisors will receive communication that explains their new roles and responsibilities as well as talking points to guide conversations with employees. This will be provided in a formal training session and other forms of communications with human resources. In addition, the Department of Labor has created a short video that supervisors can share with their employees. See dol.gov/featured/overtime/ What should we do if we are currently recruiting for a position that will no longer meet the criteria for exempt status? You will need to continue hiring practices as normal until further notice.