Changes To Overtime Rules

Transcription

1 Changes To Overtime Rules 2016 TriNet Group, Inc. All rights reserved. Reproduction or distribution in whole or part without express written permission is prohibited. This proprietary communication has been prepared for educational and information purposes only. The content does not provide legal advice or legal opinions on any specific matters. Transmission of this information is not intended to create, and receipt does not constitute, an attorney-client relationship between TriNet and you. TriNet is not an insurance company, but rather is the single-employer sponsor of all of its health benefit plans. Nothing contained herein constitutes an offer to sell, buy, or procure insurance TriNet Group, Inc. All rights reserved. Reproduction or distribution in whole or part without express written permission is prohibited.

2 Welcome! Jacqueline Breslin Director, Human Capital Services, TriNet Jackie Breslin TriNet Based in San Leandro, CA 20 years experience in Human Resources Leads a team dedicated to compliance, workplace investigations and challenging employee relations issues Experience implementing and managing HR programs to include policy development, performance management, compensation, recruitment and retention, learning and development, coaching and M&A activity 2 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

3 Meet Our Subject Matter Experts Kelly Pacatte Senior Employee Relations Consultant Kelly Pacatte TriNet Based in Dallas, TX Over 10 years of human resources experience Subject matter expert in areas of employee relations, human resource best practice concerning compliance issues, employment investigations and EEOC Charge Responses Received her MBA from the University of Texas at Dallas SPHR Certified 3 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

4 Meet Our Subject Matter Experts Annick Miller Senior Employee Relations Consultant Annick Miller TriNet Based in Sarasota, Florida Over 16 years in Human Resources SPHR Certified As a Senior Human Capital Consultant, Annick focuses on conducting workplace investigations, as well as providing compliance and employee relations support to her Human Capital Consultant colleagues. Annick also conducts HR101 training for TriNet clients. 4 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

6 Poll The Fair Labor Standards Act is responsible for all but the following except: A. Minimum Wage B. Overtime C. Independent Contractor Status D. Child Labor 6 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

7 FLSA Overview Fair Labor Standards Act ( FLSA ) of 1938 Establishes minimum wage and overtime regulations for most wage earners Amended Exempt vs Nonexempt > Exempt = Exempt from overtime > Nonexempt= Not an exempt from overtime Employee can t request exempt status 7 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

8 FLSA Current State Current Requirements Meet one of the exemption tests based on job duties > Executives, administrators, professionals, computer employees, outside sales > Based on job duty and not on job title > Further Classification Assistance Department of Labor FLSA Advisor Seek legal advice > These are federal requirements and states may have stricter standards Exempt employees must be paid a salary of at least $455 per week ($23,660 per year) > Executives, administrators, professionals, computer employees > Computer employees can either be paid a salary or $27.63 per hour > Outside Sales do not need to meet the $455 per week threshold 8 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

10 Final Changes Raise the minimum threshold from $455 per week ($23,660 per year) to the 40th percentile of earnings for full-time salaried workers or a projected $913 per week ($47,476 a year). Automatic increase to the 40 th percentile every three years. Will be based on 40 th percentile of the weekly earnings of full-time salaried workers in the lowest wage census region (South) Changes to Highly Compensated Employees (HCE s) include setting the HCE annual compensation level equal to $134,004 per year (90 th percentile). Currently, in order to qualify for this exemption an employee must be at a threshold of $100,000 in annual compensation. Effective December 1, 2016 Duties test is unchanged 10 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

11 What Salary is included Traditional rule Minimum salary did not include bonuses or commissions Salary must meet minimum threshold of $455 per week Final Rule Up to 10% of minimum salary level may be paid through nondiscretionary bonuses, incentive pay or commissions Payout must be paid quarterly and evaluated quarterly Allows one pay period after the quarter to make up any shortfall 11 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

13 Risks Of Not Complying Since 2009, $1.6 billion back wages have been recovered by the Wage and Hour Division ( WHD ) of the federal Department of Labor AND 1.7 million workers helped by the WHD by back wages and other penalties to companies In 2015, WHD found over $245 million in back wages for over 240,000 workers 13 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

15 Step 1: Identify Employees Identifiers to Look For Employees who earn less than $60,000 a year. Those who fall into their company s two or three lowest pay grades. Those who hold the same position occupied by many other employees in the company. Those who work in certain jobs which have successfully mounted collective actions in the past. 15 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

16 Step 2: Develop a New Comp Plan Compare Options The cost of giving raises to employees who are currently exempt but make less than $47,476 per year (keeping in mind that this amount will now be updated every three years). VS The cost of reclassifying those employees as nonexempt and paying them overtime, given the number of hours those employees are currently working. 16 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

17 Sample Calculation Option 1: Maintain the exemption by increasing salary by $7, Option 2: Reclassify to non-exempt but maintain current salary and pay $5, in overtime. Option 3: Reclassify to non-exempt hourly rate of $14.71 and pay expected overtime. 17 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

18 Step 3: Review Wage & Hour Policies Implement timekeeping processes. Adopt or update policies on unauthorized overtime work, meal and rest breaks, travel time and mobile device usage. Advantages Work life balance Uncovering unnecessary distractions, unrealistic deadlines and requirements Streamlining work responsibilities Reduce employee turnover 18 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

19 Poll True or False If an employee asks their supervisor why his status was changed, the supervisor should direct the employee to upper management. 19 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

20 Step 4: Communicate the Changes Who will deliver the news. When will the news be delivered. What will the format be in which the news will be delivered. 20 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

21 Step 5: Train Train the Reclassified Employees & Their Managers What constitutes compensable working time? What is the company s policy regarding overtime? What constitutes a complaint that could trigger a retaliation claim under the FLSA? 21 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

22 Step 6: Review Bonuses Consider Whether Bonuses Can Count Toward the Minimum Salary Level The DOL will allow employers to count nondiscretionary bonuses and commissions to satisfy up to 10% of the minimum salary level. Example: > Annual salary of $45,000 > $6,000 bonus Frequency of bonus pay out is important quarterly pay out required. 22 The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

24 Conclusion Preparing for the new overtime rules is likely to be time-consuming and expensive. But failing to prepare will leave your company vulnerable to lawsuits and DOL investigations that could be even more time-consuming and expensive. With the clock ticking down until December 1 st, now is the time to act. DOL Resources: The Executive's Roadmap to Best-in-Class HR Strategy 2016 TriNet Group, Inc. All rights reserved.

25 About TriNet TriNet delivers HR outsourcing services that allow small companies to do what they do best. Thousands of companies have turned to TriNet for human resources, benefits, payroll, workers compensation, and strategic HR services. As their trusted HR advisor, TriNet helps these organizations contain HR costs, minimize employer-related risks, and relieve the administrative burden of HR. Learn more about TriNet at TriNet.com or call TriNet Group, Inc. All rights reserved. Reproduction or distribution in whole or part without express written permission is prohibited. 25