Start The Day With The FLSA

1. Start The DayWith The FLSA

2. Today�s Menu New FLSA White Collar Regulations Washington Minimum Wage Act Regulations Regular Rate of Pay Highlights Hours of Work Highlights

3. White CollarExemption Overview Is employee paid on a salaried basis? Does employee have sufficient duties to qualify as an executive, administrative employee or professional?

4. Summary of FLSA New Regs Eliminates �short� and �long� tests Minimum salary increased to $455 per week Executive duties test focuses on authority to hire or fire or that suggestions on hiring, firing, advancement, promotion are given particular weight Final regs toughen exempt status for �first responders�

5. Summary of FLSA New Regs(continued) Professional exemption allows experience to substitute for degree in learned professions Streamlined test for those paid more than $100,000 per year Disciplinary suspensions allowed in full day increments not full week Relaxed window of correction

6. Definition of �Salaried Basis� Pre-determined wage, not subject to reduction based on quantity or quality of work Salary is all or part of compensation received

7. FLSA DevelopmentsRe Salary Basis Increased minimum salary to $455 per week ($23,660 per year) Computer Professionals either paid salary above or paid hourly at least $27.63 per hour Disciplinary suspensions in full day increments (however, WMWA still requires full week increments)

8. Disciplinary Suspensions Unpaid suspension for disciplinary reasons generally a problem OK to suspend if in workweek increments If suspend for workweek, ensure suspension does not include parts of two workweeks

9. Executive Duties Test �Primary duty� is management General Rule is 50% Exceptions available where management is less than 50% Regularly supervises 2 or more FTE�s Has authority to hire or fire or whose suggestions as to hiring, firing, advancement, promotion or other change of status given particular weight

10. When are Suggestions Given �Particular Weight� Is it part of employee�s job duties How frequently are suggestions made How often are suggestions followed

11. AdministrativeEmployee Duties Office or non-manual work Primary duty requires exercise of discretion and independent judgment with respect to matters of significance Categories of exemption executive assistants human resources staff purchasing agents employees performing special assignments

12. Professional Duties Test Categories Learned Professions Artists Teachers Learned Professions category requires primary duty work requiring knowledge of advanced type in field of science or learning customarily acquired by prolonged course of specialized intellectual instruction

13. Examples of Professional-Exempt Positions Lawyers Doctors RN�s CPA�s Physician Assistants

14. Computer Professional Exemption Paid a salary at least $455 per week, or hourly at least $27.63 (note quirky language of WAC) Higher level computer tasks, not routine installation of hardware or software

15. First Responder Regulation Reg expresses general reluctance to find exempt employees in ranks of first responders in police and fire Exemption still available for higher ranks in police and fire, but heightened emphasis on actual duties

16. Window of Correction Window of correction available if Improper deduction was isolated or inadvertent as compared to part of an actual practice; and Employee is promptly reimbursed

17. Washington Law ChangesRe Salary Basis Adopts FLSA basis definition Additional compensation above salary, even based on hours, OK Deductions from comp banks OK Deductions from leave banks OK for public employers, and OK for private employers in some situations Partial day absence pay deduction OK for public employers BUT NOT for private employers Limited window of correction

18. Only the Starting Point-Regular Rate of Pay Basic Rate Employees paid solely on the basis of a single hourly rate Employees with multiple forms of compensation

19. Regular Rate of Pay Problems Failure to include add-ons to base pay (e.g., longevity, education incentives) Only required if employees work more than FLSA threshold Deceptive contract language Improper conversion of salary to hourly rate Handling 2 or more rates of pay

20. Items to Includein Regular Hourly Rate of Pay Commissions Shift differential Payments for achieving certain levels of certification Education incentives Hazardous duty pay Special assignment or acting pay Clothing allowance (only if amount does not approximate actual cost of purchase and cleaning) On-call pay Non-discretionary bonuses Premiums for weekends or holidays worked Contest prizes Employee lunch or meal expenses paid by employer, unless incurred for the employer�s benefit Retroactive pay increases Travel expenses of employees going to and from work, if paid by employer, unless incurred for the employer�s benefit Tool allowances (only if doesn�t reasonably approximate actual cost of purchasing and maintaining tool)

21. Questions Surrounding Sick Leave Buy-Back Programs �Buy-back� vs. �Cash-out� Programs FLSA Treatment of Sick Leave Buy-Back Programs 29 CFR 778.218 �Payments which are made for occasional periods when the employee is not at work due to vacation, holiday, illness, failure of the employer to provide sufficient work, or other similar cause, where the payments are in amounts approximately equivalent to the employee�s normal earnings for a similar period of time, are not made as compensation for his hours of employment. Therefore, such payments may be excluded from the regular rate of pay under section 7(e)(2) of the Act and, for the same reason, no part of such payments may be credited toward overtime compensation due under the Act.�

22. Acton v. City of Columbia � Western District of Missouri. Held sick leave buy-back program was a non-discretionary bonus that should be included in regular rate of pay. Featsent v. City of Youngstown � 6th Circuit. Held that sick leave buy-back program was similar to payments made when no work is performed due to illness � thus, it should not be included in regular rate of pay. The Ninth Circuit has yet to address the issue.

23. WMWA Treatment of Sick Leave Buy-back Programs Has not addressed the issue Arguments for including it in the regular rate Teamsters, Local 117 v. Northwest Beverages, Inc. Arguments against including it in the regular rate Washington�s treatment of sick leave under salary basis test Statutory language

24. Items Excluded From Regular Hourly Rate of Pay Vacation pay Sick leave Bereavement leave Jury duty pay Discretionary bonuses Holiday pay, if it is equivalent to regular earnings Premium pay for work on holiday, weekends, etc. Idle time beyond the control of the employer Severance pay Qualified pension and profit sharing contributions Call-back premium pay Travel expenses, if business trips are taken by the employee Show up or reporting pay which exceeds hours actually worked Weekly overtime pay Health and welfare fund benefits received by the employee Death benefits Employer-paid benefits Reasonable uniform and clothing allowances Comp. time use payments

25. Converting Salaryto Hourly Rate Fixed 40 hour workweek Fixed workweek less than 40 hours Fixed workweek more than 40 hours Fluctuating workweek

26. Fluctuating Workweek Option for Non-exempt Salaried Personnel Spreads salary over all actual hours worked in week Available if nature of job causes fluctuating hours Requires agreement before work is performed

27. Option For Twoor More Rates Tracing method Which job caused overtime Best when lower-paid job causes overtime Weighted average method Blend both rates Best when higher-paid job causes overtime

28. Compensation Overtime Through Comp Bank Mortensen v. County of Sacramento � Ninth Circuit. Employer has the right to schedule the comp time within a reasonable period of the request, not the specific day requested.

29. �Hours Worked�General Rule Any time employee is permitted to spend performing the �principal activity or activities which such employee is employed to perform� is compensable

30. Off-the-Clock Work Definition: work voluntarily performed where agency knew, or should have known How to control Pre-approval requirement for overtime Enforcement of requirement

31. Categories of Time That May Be Designated as Compensable Work Off-the-clock work Waiting time Show up, stand-by, or reporting time Time spent changing clothes, sleep time Travel time for employees reporting straight to remote sites Time spent in training Time spent in court proceedings Union activities Time spent for caring for a canine Shuttle travel for split shift employees On-call Time

32. On-Call Time Is employee primarily free to engage in personal pursuits? Factors: geographic restrictions, response time, frequency of interruptions, use of cell phones and pagers vs. land-based phones, availability to trade assigned days, reasonableness of response time What is the nature of understanding with employee?

33. New WashingtonMeal & Break Law Effective 5-20-03, basic meal and break period rules apply to public employers Basic rule, 10 minutes per 4 hours (either fixed or intermittent) and 30 minutes for lunch Can opt out or change by union contract or employee agreement Law recognizes certain pre-existing exemptions before 4-1-03

34. Requirements to Exclude Training Time From Hours Worked Either: All of the following four requirements must be met: Attendance outside regular working hours Attendance voluntary Not directly related to employee�s job; and Employees do not perform productive work during attendance Or: Training required by government agencies as condition of profession (e.g., Paramedic re-certification training)

35. Travel Time Maze Commute time not hours of work Available for readjusted work station Travel during work hours Between job sites: compensable From remote job site to base: compensable Out of town travel: everything compensable except travel from home to airport, bus depot or train station Travel outside regular working hours If employee is driving: compensable If passenger in auto, bus, plane or train: noncompensable unless doing work Travel on non-work day: If during regular work hours: compensable If outside regular work hours: noncompensable unless employee is driving