FLSA Presentation to Payroll Coordinators June 16 and 17, 2016 Randy West, Executive Director, HR Compensation

Changes Proposed by US DOL in 2015 June 30, 2015 – US DOL released Notice of Proposed Rulemaking with proposals to: Raise salary basis for OT to increase from current $455 per week, $23,660 per year) to $970 per week, $50,440 per year, “possibly by 2016” – not pro-rated for part-time positions Proposed level is targeted at 40th percentile of earnings for full-time salaried workers Raise highly compensated employee annual salary level to $122,148 Proposed level is targeted at 90th percentile of earnings. Automatically update the salary and compensation thresholds annually Either based on a fixed percentage of wages or Tied to the Consumer Price Index (like State of Washington minimum wage law, which is tied to CPI-U (consumer price index for urban wage earners). Asked questions about duties tests – “California Rule” (50% exempt duties required)

Finale Rule Announced May 18, 2016 May 18, 2016 – US DOL released Final Rule Raise salary basis for OT to increase from current $455 per week, $23,660 per year) to $913 per week, $47,476 per year Proposed level is targeted at 40th percentile of earnings for full-time salaried workers in lowest U.S. Census Region (currently the South) Raise highly compensated employee annual salary level to $122,148 Proposed level is targeted at 90th percentile of earnings (nationally). Automatically update the salary and compensation thresholds every 3 years January 1, 2020 No changes to duties tests

What We’re Doing to Get Ready Creating new pro staff and classified job codes that are OT eligible Approx. 320 new pro staff, OT eligible codes Approx. 50 new classified, OT eligible codes Considering adjusting min for all pro staff OT exempt jobs to $47,476 Considering bargaining min adjustments for OT exempt versions of classified jobs up to nearest step to $47,476 Waiting to see for the state does for classified non-union jobs Urging departments to Make sure job descriptions are up-to-date Consider the impact of jobs that might need to start tracking time Sent list of potentially impacted employees to Administrators on May 31, 2016

Questions? If you have questions that do not get answered at today’s meeting, you can send them to Randy West in HR Compensation, or to your assigned Compensation Consultant