Fair Labor Standards Act (FLSA) What does work look like?

Fall 2016

Presentation Outline  What You Need to Know about the Fair Labor Standards Act  What You Need to Know about Overtime  What Does Work Look Like?  Tracking Work Time  Managing Change  Q&A

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What You Need to Know about the Fair Labor Standards Act

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FLSA New Rule Effective date December 1, 2016 • New salary threshold: $913 per week, $47,476 annually • All positions below the new salary threshold will revert to nonexempt effective December 1, 2016 • Notification of change in exemption status will be sent to currently exempt employees transitioning to nonexempt status by October 31, 2016 • Automatic update of the salary threshold every three years - next update January 1, 2020

Fines and penalties may be assessed for noncompliance • Back pay for two years, or three years for willful noncompliance • Penalties – up to $1,100 per employee

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How is FLSA Status Determined? Two tests determine FLSA status 1. Salary Test – Must be paid on a salary basis and the actual pay must be $913 per week ($47,476 annually) for both full and part-time positions 2. Duties Test – Exempt duties need to be 50% of the overall assigned tasks 3. A position must pass both tests in order to be determined exempt from overtime. If a position fails either the Salary or Duties Test, it is nonexempt

FLSA status is tied to a position, not a person. When the FLSA determination is in question, it will be nonexempt

Job Info

Job Info Job Info

Job Info

Job Info

Job Info

Job Info

Job Info

Salary Test

Duties Test

Pass!

Exempt Status

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Employment Relationship According to the Department of Labor, FLSA applies when an employment relationship between the employer and the employee exists • Employees o State Classified, Administrative Professional, Research Professional and Postdoctoral Research positions are considered employees and FLSA applies

• Non-Employees o Graduate Teaching Assistants (GTAs) and Graduate Research Assistants (GRAs) are considered students, paid through a stipend, and are fulfilling the requirements of an advanced degree o Per the Department of Labor there is not an employer/employee relationship and FLSA does not apply

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Who Determines the FLSA Status? The HR Classification/Compensation and Employment Units receive the position descriptions and based on the duties and salary of the position determine the overtime exemption status

T M S

Admin Professional Research/Post-Doc State Classified

Law Position Duties Position FTE/Change in Pay Other relevant factors DoL Opinion Letters

Final FLSA decision (nonexempt/ exempt)

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What You Need to Know about Overtime

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Overtime Defined Hours Worked

Overtime

Workweek

Any time a nonexempt employee is suffered or permitted to work for the benefit of the employer

Any hours worked by a nonexempt employee beyond 40 hours in a workweek

Any regular recurring period of 168 hours – seven consecutive 24-hour periods – designated as a period of work for an employee

• Compensated at one and one-half times the hourly rate of pay

• CSU established workweek is Saturday 12:01 am through Friday • Deviations must be approved in writing by Human Resources

• Compensatory Time Off Policy

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Tools for Managing Overtime Flex Hours: Time worked beyond the 8-hour work day may be flexed and used within the same workweek

Cash: Paid at one and one-half time the hourly rate for all hours worked over 40 in a workweek

Compensatory Time: Accrued at one and one-half times for every hour worked over 40 in a workweek Nonexempt employees required to sign Compensatory Time Agreement Maximum amount of compensatory time a nonexempt employee may accrue is 240 hours

Departments may opt for lower maximum accruals and/or pay out options

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Variations to the Work Schedule May redefine a workday • May delay start time and work into evening hours o Work 12 pm to 8 pm

• May group schedules to accommodate the needs of the department o Work 9 am to noon, non-work break, return 3 pm to 8 pm o Varying weekly schedule • Saturday, Tuesday and Wednesday - 10 am to 7 pm with lunch • Thursday and Friday - 7 am to 4 pm with lunch

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What Does Work Look Like?

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Determining Hours Worked Can be Complicated Nonexempt employees • Must be compensated for all hours worked in a workweek o Assignments within two or more departments must be coordinated with the primary department to limit overtime hours

• Must be compensated for any additional hours the employee is suffered or permitted to work o Work performed above the regular 40 hours that is not pre-approved is work time and must be compensated o Employees consistently working overtime without supervisor approval may be subject to corrective/disciplinary actions • Contact your HR Solutions Partner or HR Liaison before action is taken

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Work Time Activities Work Time Activities • • • • • •

Crafting/responding to business emails/correspondence Making/receiving work phone calls Creating/revising presentations Reviewing applications Donning/removing safety equipment CSU sporting events/fundraising events

Not Work Time Activities • • •

Commuting to and from work Social dinner with colleagues Down time in hotel room

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Meal Periods Scheduled meal periods are discretionary • Don’t count as hours worked as long as the nonexempt employee is relieved of all duties for the purpose of eating a meal • Must be at least 20 minutes • Nonexempt employees who work through a meal period must be compensated • Nonexempt employees who routinely work through a meal period without Supervisor approval may be subject to corrective or disciplinary action

• Contact HR Solutions Partner or HR Liaison before action is taken.

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Rest Periods Rest periods are discretionary • If granted, rest periods of short durations (5 to 20 minutes) are included as part of the 8 hour workday and considered hours worked o Examples – coffee/snack, health breaks, etc.

• Rest periods cannot be used for o Overtime/compensatory time (already paid time)

o Extending the meal period, leaving work early or arriving late

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Waiting Time Waiting time is counted as hours worked when • A nonexempt employee is unable to use the time effectively for personal purposes • The time is controlled by a Supervisor o Example - An Academic Advisor is waiting 30 minutes for a student to arrive for an appointment. Waiting time = hours worked

Waiting time is not counted as hours worked when • A nonexempt employee is completely relieved from duty and required to return to work at a set time • The duration is long enough to allow the employee to use it effectively for personal purposes

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On-Call Time On-call time is hours worked when • A nonexempt employees has to stay at a designated worksite • A nonexempt employee has to stay close to the worksite and cannot use that time effectively for personal purposes • A nonexempt employee responds to a 15 minute phone call and does not have to report to campus

On-call time is not hours worked when • A nonexempt employee is given the freedom to pursue personal interests/activities while on-call • A nonexempt employee is provided with a radio, beeper or cell phone and no work activities occur o Example – Nonexempt employee must be available to receive calls and report to campus if needed, and no calls are received

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Call Back Time Call Back time occurs when a nonexempt employee is called back to work before their scheduled shift or after leaving the place of work upon completion of the shift • Call back time shall be for a minimum of two hours or actual time worked, whichever is greater • Compensation shall be at the hourly equivalent of standard rate of pay, subject to CSU’s overtime policies • The minimum of two hours of compensation shall be counted as two hours worked when computing the total number of hours in the workweek Example – A nonexempt employee is called back to campus resulting in one hour of actual work. Credit will be given for two hours of work. If overtime for the week results, the time will be compensated as overtime or compensatory time.

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Remote Access and Cell Phones A nonexempt employee cannot agree that (s)he will not be paid for the hours spent on work related tasks outside of a normal workday Remote Access/Emails • Time spent working through remote access or answering emails is time worked

Cell Phone Usage • No change to CSU’s Mobile Communications Policy • Time spent communicating on work related matters is time worked

Waiting Time • Time spent waiting for a call at the direction of the supervisor or in between work related email responses may also be included in the total work hours

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Training/Professional Development Time nonexempt employees spend in lectures, seminars, classes or training is considered hours worked and must be tracked and paid, unless all of the following criteria are met • Attendance is outside of normal working hours • Attendance is voluntary • The course, lecture or meeting is not job related • The nonexempt employee does not perform any productive work during attendance o Responding to emails would be work time

Supervisors need to establish expectations with nonexempt employees as to what is considered work hours

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Travel Time Time spent traveling as part of the principal activity must be counted as work time (i.e., Traveling from high school to high school during the work day)

FLSA does not apply when traveling to an exempt country if all work is done during the employee’s regular established workweek

Time spent commuting between home and work is not work time

Overnight travel away from home is considered time worked when it occurs during a nonexempt employee’s normal daily work schedule Time spent traveling during normal daily work schedule is counted for Saturday or Sunday Travel

All time spent traveling for a Special One Day Assignment to another city is work time

Overnight travel outside the normal daily work schedule is not considered work time, unless assigned specific work tasks

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Special One Day Assignment A nonexempt employee is given a one day special training assignment in Denver. The employee leaves at 6:30 a.m. and returns at 5:30 p.m. The employee’s daily commute to CSU is 30 mins one way and the employee has a one hour meal break. What are the hours worked for this special assignment?

This would result in a 7:00 a.m. to 5:00 p.m. workday with one hour lunch for total time worked equal to 9 hours.

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Overnight Travel A nonexempt employee works from 7:30 am to 4:30 pm, Monday-Friday. The employee must travel out of state to attend a business meeting. The employee leaves Fort Collins at 12:00 pm to catch a flight out of Denver at 3:00 pm on Sunday (3 hour flight). The employee arrives at 5:00 pm (6:00 pm Fort Collins). During the flight the employee prepares notes (2 hours) and then continues to review files in the hotel room until 9:00 pm (3 hours). On Monday, the employee takes a taxi to the meeting at 7:30 am and arrives at 8:00 am. The employee finishes the meeting at 1:30 pm and departs on a 3:00 pm flight arriving in Denver at 7:00 pm (3 hour flight). No work is conducted during the return travel. The employee arrives at home at 9:30 pm on Monday. How is this employee compensated?

Non-work related time spent as a passenger on the plane would not be compensable.

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Non-work time in hotel after normal work hours is not compensable.

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The 2 hour of preparation for the meeting is work time.

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Normal commute time is not work time.

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Three hours spent on preparation in the hotel is work time.

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Travel time outside of normal work hours is not work time.

Travel time during normal work hours is work time.

7 The taxi ride is work time since it occurred during normal work hours.

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Travel time to the airport and some flight time (through 4:30) is work time.

10 Travel time from 4:30 to 9:00 is not work time.

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Travel Time Review 1 Normal working hours 7:30 a.m. to 4:30 p.m., Monday-Friday. The employee leaves Fort Collins at 12:00 p.m. and catches a flight from Denver at 3:00 p.m. on Sunday (3 hour flight).

Q: What is the total compensated travel time? A: 4.5 hours – Hours traveling during the employee’s normal work hours (12:00 to 4:30)

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Travel Time Review 2 Normal working hours 7:30 a.m. to 4:30 p.m., Monday-Friday. The employee leaves Fort Collins at 12:00 p.m. and catches a flight from Denver at 3:00 p.m. on Sunday (3 hour flight). During the flight the employee prepares notes (2 hours) and continues to review files in the hotel until 9:00 p.m. (3 hours).

Q: How many hours spent in the airplane and hotel would be considered compensable time? A: 3.5 hours – Employee may already be compensated for work based on travel time during normal work hours.

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Travel Time Review 3 Normally working hours 7:30 a.m. to 4:30 p.m., Monday-Friday. Days Worked

Sat

Sun

Mon

Tues

Wed

Thurs

Fri

Total

7.5

9.5

8.0

8.0

8.0

FLEX

41.00

Q: Taking into consideration the days the employee is traveling, how could you reallocate hours/days to limit overtime?

A: Total hours worked 41.00; supervisor can flex 7.5 hours for Sunday and pay overtime/compensatory time for 1 hour

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Volunteering A nonexempt employee volunteering to work CSU events must be compensated for hours worked when tasks are similar to the normal duties of the employee Exception – A nonexempt employee is considered to be a volunteer when all of the following conditions are met • Services are not similar/related to the type of service the employee is employed to perform • Services rendered are done so freely and without coercion • Services are performed for civic, charitable or humanitarian reasons for which no compensation is received beyond expenses or a nominal fee o Example – A nonexempt employee from Human Resources volunteers to take tickets at a basketball game for CSU

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24 Hour Duty Assignments Overnight travel is considered time worked during an employee’s normal daily work schedule including Saturday and Sunday. Whereas time outside the normal daily work schedule is not considered work time, unless assigned specific work tasks. o Designated Night Duty Counselor

The employee and employer should have an agreement excluding bona fide meal and scheduled sleeping periods for employees required to be on duty for 24 hours or more. o Excluded time should not be more than 8 hours

Interrupted sleeping periods due to a call to duty are counted as hours worked. If the interruption prevents the employee from getting at least five hours of sleep, the entire period must be counted as time worked.

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Review – Scenario 1 A nonexempt employee is on his 30-minute lunch break, which he takes at his desk. The phone rings and no one answers the call, so he answers the phone. The situation took a total of 15 minutes. Did the employee engage in work? What happens to his lunch break?

Yes! Since the employee answered the phone, he performed a work function and needs to be compensated for his time worked. Also, he needs to be paid for his entire lunch break because he wasn’t able to use his lunch break for his own purposes.

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Review – Scenario 2 An Academic Advisor has an appointment with a student on Saturday, and the student calls the Academic Advisor at home before the meeting to notify them of a two-hour delay. Did the Academic Advisor engage in time worked?

Yes! The phone call from the student was time worked and should be tracked. The two-hour delay would not be time worked as the Academic Advisor was not on campus and was still permitted to tend to personal activities during that time.

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Review – Scenario 3 A nonexempt Postdoctoral Fellow is working after hours in the lab performing research and administrative duties, such as – catching up on emails, ordering laboratory supplies and preparing the lab for the next day’s activities. Upon returning home, she reads scientific periodicals not related to the research she is performing. Did the Postdoc engage in work time? Yes and No. Since the employee was reading periodicals not related to research or the work being performed, that is not considered hours worked, so the employee is not paid for that time. However, when the employee is performing administrative duties that are directly related to the work being performed, that is considered hours worked and that time must be tracked and compensated.

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Supplemental Pay Supplemental pay cannot be added to the nonexempt base salary to meet the new salary threshold. Supplemental pay for the additional duties should be calculated at one and one-half times the regular rate of pay for any hours worked over 40 per week o Even if the supplemental pay duties are exempt in nature (teaching)

All hours worked associated with supplemental pay must be tracked and verified to ensure the correct overtime rate of pay Employees must coordinate between each department to ensure proper tracking and compensation Refer to the University’s Supplemental Pay policies for information on acceptable duties and approval

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Tracking Work Time

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Myth Busters Myth – All Administrative Professional (AP) positions are exempt from overtime requirements o Fact – Some AP positions are nonexempt and eligible for overtime. This depends on the annual salary and position duties.

Myth – All positions below the new salary threshold will receive an increase to at least $47,476 o Fact – Not all positions will receive a salary increase. Departments will assess each position and develop strategies to manage overtime costs.

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Record Keeping FLSA requires employers to keep records of hours worked • Nonexempt employees must report total hours worked each day and submit a weekly timesheet for Supervisor approval o Punching in and punching out is not a FLSA requirement o Colleges/Units may have different processes in place for tracking time o Excess regular hours are used for part-time positions under 40 hours

Overtime must be pre-approved by the Supervisor • If not pre-approved, overtime worked must still be compensated o Supervisors may authorize a maximum number of overtime hours that can be worked without pre-approval • Overtime worked and not pre-approved may lead to corrective action/discipline Exempt employees do not track time worked

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Overtime Examples How many hours of overtime worked? Example 1 Days

Sat

Sun Mon

Worked

Wed

9.4

Sick Hldy/leave

Tues

8 8

Thurs

Fri

Total

8.25

9.75

27.40 8

Grand Total 43.40

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• 3.4 – Sick leave, annual leave and holidays are included in the computation of overtime

Example 2

• 0 - Compensatory time is not counted as hours worked in the computation of overtime as it is a form of compensation and not hours worked.

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Managing Change

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Transitioning to Nonexempt Changes • The position is now eligible to earn overtime/compensatory time • Increased communication with supervisor on work schedule

Stays the Same • • • • • • •

Annual salary Level of authority/status in department and across campus Autonomy and level of decision making Supervisor responsibilities Career development and path choices Benefits Available programs and services

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Leading the Team

1 Be knowledgeable of the FLSA rule changes how your department or program will manage overtime 2 Understand • Cash payment • Compensatory time accrual • Flex time within the same week

how to track hours worked and submit time for 3 Understand nonexempt employees use of the resources available to 4 Make you and your team • HR Solutions Partners • HR Liaisons

workload evenly amongst team 5 Spread • Don’t overburden exempt employees

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Resources HR website – 2016 Changes to the Fair Labor Standards Act (FLSA)

http://www.hrs.colostate.edu/compensation/flsa.html U.S. Department of Labor Wage and Hour Division Final Rule: Overtime https://www.dol.gov/WHD/overtime/final2016/ CSU – Compensatory Time Off Policy & Agreement http://policylibrary.colostate.edu/policy.aspx?id=716 HR Employee Manual http://www.hrs.colostate.edu/policies/hrs-manual.html

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Questions

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