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It’s About Time. Presented by City of Titusville, Florida John McKinney john.mckinney@titusville.com 321.383.5804. Today’s Objectives. To provide education about the Federal FLSA law and regulations. To provide an overview of the Exempt versus Non-Exempt status

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it s about time

It’s About Time

Presented by

City of Titusville, Florida

John McKinney

john.mckinney@titusville.com

321.383.5804

today s objectives
Today’s Objectives
  • To provide education about the Federal FLSA law and regulations.
  • To provide an overview of the Exempt versus Non-Exempt status
  • To provide you with your rights
  • To provide an overview of the reporting and record retention process for employees
flsa background
FLSA – Background
  • Fair Labor Standards Act (FLSA)
    • Established in 1938 by the Department of Labor (DOL)
    • Purpose
      • Establishes standards for:
        • Minimum Wage
        • Overtime Pay
        • Child Labor
    • DOL first issued exempt status regulations in 1940
      • Last modification in 1954
    • Recent regulation revisions effective August 23, 2004
      • Section 541 (29 CFR 541 et al) – White Collar Exemptions
fair labor standards act
Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $5.85 an hour (Florida $6.67). Florida’s minimum wage is $.82 more than the current $5.85 federal minimum wage.   Overtime pay at a rate of not less than one and one-half times their regular rates of pay is required after 40 hours of work in a workweek.

flsa background5
FLSA - Background
  • FLSA generally requires that employees be paid:
    • At least federal minimum wage of $5.85 per hour
    • Overtime premium pay of time-and-one-half of the employee’s regular rate of pay for all hours worked over 40 in a workweek for employees in hourly non-exempt status.
    • Overtime premium pay of one-half of the employee’s regular rate of pay for all hours worked over 40 in a workweek for employees in salaried non-exempt status.
fair labor standards act web
Fair Labor Standards Act - Web
  • http://www.dol.gov/esa/whd/flsa/ - Law
  • http://www.dol.gov/esa/regs/compliance/whd/hrg.htm - Reference
  • http://www.dol.gov/esa/regs/compliance/whd/fairpay/fact_exemption.htm - Exemptions
exempt or nonexempt
Exempt or Nonexempt
  • Employees whose jobs are governed by the FLSA are either "exempt" or "nonexempt." Nonexempt employees are entitled to overtime pay. Exempt employees are not. Most employees covered by the FLSA are nonexempt. Some are not
white collar exemptions
White-Collar Exemptions
  • White-collar exemptions allow for exemptions from these requirements.
  • Salary Test
    • Employee must be paid at least a certain compensation level;
    • Employee is paid on a salary ,rather than hourly, basis; and
  • Duty Test
    • Employee performs certain exempt duties.
white collar exemption requirement 1 salary test
White Collar Exemption Requirement #1 (Salary Test)
  • Salary level
    • Minimum paid must = $455 per week or more.
    • If paid less than $455 per week, cannot be exempt even if he/she meets the duties test.
    • If paid $455 per week or more, can be exempt only if he/she also satisfies the duties test.
    • Salary cannot be prorated based on FTE.
white collar exemption requirement 2 salary test
White Collar Exemption Requirement #2 (Salary Test)
  • Form of payment
    • Employee must be paid a flat salary, not by the hour
    • Employee must regularly receive a predetermined amount that cannot be reduced because of variations in the quantity or quality of work performed
white collar exemption requirement 3 duties test
White Collar Exemption Requirement #3 (Duties Test)
  • FLSA, Section 12(a)(1) provides exemption from minimum wage and overtime pay for bona fide employees in the following areas:
    • Executive
    • Administrative
    • Professional
    • Outside Sales
    • Highly Compensated
  • Section 13(a)(17) also exempts certain computer employees.
eligibility for overtime
Eligibility for Overtime
  • Compensation
    • Paid on predetermined salary on a biweekly basis
    • Eligible for overtime pay at one-half the hourly rate for all hours worked over 40 for each workweek
      • Monetary Compensation
      • Compensatory Time
compensation
Compensation
  • Monetary Compensation
    • Paid at one-half the regular hourly rate
    • Paid in the form of an adjustment on the job that the overtime was worked, following the end of the pay period in which the overtime was worked
    • Overtime paid in increments of 15 minutes for hours worked over 40 in a work week
      • 0-7 minutes = 0
      • 8-22 minutes = 15 (.25)
      • 23-37 minutes = 30 (.5)
      • 38-59 minutes = 45 (.75)
compensation14
Compensation
  • Compensatory Time
    • Employees discretion
    • Used at one-half time the number of hours worked over 40
    • At time of termination/separation, paid out all unused compensatory time at one-half the regular hourly rate at the time of termination/separation
    • Balances and usage maintained within the unit
    • Maximum compensatory time accumulation allowed = 240 hours
for more information
For More Information
  • Other resources on the Part 541 exemptions are available at www.dol.gov\fairpay
    • Regulations
    • Preamble
    • Fact Sheets
    • Field Operations Handbook
    • Frequently Asked Questions
  • To ask a specific question or register a comment:
    • Email: fairpay@dol.gov
    • Telephone, toll-free: 1-866-4US-WAGE
review
Review
  • Minimum Salary Level: $455 per week
  • Highly Compensated Level: $100,000 per year
  • Salary Basis:
    • A predetermined amount paid for every week in which

the employee performs any work, which is not subject

to reduction because of variations in the quality or

quantity of work performed

  • The salary level and salary basis tests do not apply to

outside sales employees, doctors, lawyers, teachers, and

certain computer-related occupations paid at least $27.63

per hour

rights of exempt employees
Rights of Exempt Employees
  • An exempt employee has virtually "no rights at all" under the FLSA overtime rules. About all an exempt employee is entitled to under the FLSA is to receive the full amount of the base salary in any work period during which s/he performs any work (less any permissible deductions). Nothing in the FLSA prohibits an employer from requiring exempt employees to "punch a clock," or work a particular schedule, or "make up" time lost due to absences. Nor does the FLSA limit the amount of work time an employer may require or expect from any employee, on anyschedule. ("Mandatory overtime" is not restricted by the FLSA.)
rights of nonexempt
Rights of nonexempt
  • Nonexempt employees are entitled under the FLSA to time and one-half their "regular rate" of pay for each hour they actually work over the applicable FLSA overtime threshold in the applicable FLSA work period.
flsa salaried non exempt timesheet
FLSA Salaried Non-Exempt Timesheet
  • Report total hours worked per day
  • Automatic Calculations
    • Hours worked over 40 in each workweek
    • Number of hours due to employee in the form of comp time or overtime payment for each monthly pay period
  • Employee and Supervisor signature required on all timesheets in which overtime hours were accrued
  • Units may choose to collect employee timesheets and signatures for all months for documentation and retention purposes
  • Spreadsheet/paper form retained in payroll
timesheet review
Timesheet Review
  • Decentralized
  • Dept Balance hours
  • HR reviews for contractual compliance
  • Payroll validates total time
  • HR / Payroll agree to final Register
record retention requirements
Record Retention Requirements
  • Highlights: The FLSA sets minimum wage, overtime pay, recordkeeping and child labor standards for employment subject to its provisions.
record retention requirements22
Record Retention Requirements
  • Posting: Employers must display an official poster outlining the provisions of the Act, available at no cost from local offices of the Wage and Hour Division and toll-free, by calling 1-866-4USWage (1-866-487-9243). This poster is also available electronically for downloading and printing at http://www.dol.gov/osbp/sbrefa/poster/main.htm
record retention requirements23
Record Retention Requirements
  • What Records Are Required: Every covered employer must keep certain records for each non-exempt worker. The Act requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the hours worked and the wages earned. The law requires this information to be accurate. The following is a listing of the basic records that an employer must maintain:
    • Employee's full name and social security number.
    • Address, including zip code.
    • Birth date, if younger than 19.
    • Sex and occupation.
    • Time and day of week when employee's workweek begins.
    • Hours worked each day.
    • Total hours worked each workweek.
    • Basis on which employee's wages are paid (e.g., "$6 an hour", "$220 a week", "piecework")
    • Regular hourly pay rate.
    • Total daily or weekly straight-time earnings.
    • Total overtime earnings for the workweek.
    • All additions to or deductions from the employee's wages.
    • Total wages paid each pay period.
    • Date of payment and the pay period covered by the payment
state library archives of florida
State Library & Archives of Florida
  • http://dlis.dos.state.fl.us/index_researchers.cfm
  • http://dlis.dos.state.fl.us/barm/genschedules/GS1-SL-2006.pdf
flsa direct deposit
FLSA & Direct Deposit
  • Fair Labor Standards Act (federal law)
    • Requires payment in “cash or negotiable instrument payable at par”
    • Paycards technically violate FLSA
    • DOL does not pursue complaints about payment by paycard
    • DOL’s own position approving direct deposit is inconsistent with letter of law
local dol contact
LOCAL DOL CONTACt

Orlando Field Office

Wage & Hour Division 407-648-6471

www.wagehour.dol.gov

summary
Summary
  • No employees will be changed from exempt to non-exempt
  • All Professional employees not meeting the minimum salary requirement ($455/wk) should be reviewed to be changed from exempt to salaried non-exempt status
  • Professionals not meeting salary requirement should begin tracking hours per FLSA Salaried Non-Exempt
  • Departments should be responsible for determining FLSA exemption status and verifying FLSA Indicators
  • Exempt employees report absences in 4 and 8 hour increments only (full- and half-day for part-time employees)