2016 SPaRC Retreat Afternoon Concurrent Session #2 Ask HR!

Presenters Sandy Jones Associate Director, Academic Human Resources Deb Stone Director, Academic Human Resources Lori Willoughby Executive Director of Engineering HR, Engineering Administration Jayne Goby Associate Director, Grants and Contracts Post-Award SPaRC Retreat 2016-2017

Fair Labor Standards Act---Governs Pay and Overtime Eligibility Exempt (Not Eligible for Overtime Pay) Paid on a salaried basis Duties meet Professional level test Salary is at or above $23,360 or $455/week CURRENTLY SPaRC Retreat 2016-2017

Fair Labor Standards Act---Governs Pay and Overtime Eligibility Exempt (Not Eligible for Overtime Pay) Paid on a salaried basis Duties meet Professional level test Salary is at or above $47,476 or $913/week Effective Dec. 1, 2016 Automatic updates to Salary every three years SPaRC Retreat 2016-2017

Impacted Not Impacted Faculty (including Specialized Faculty) Academic Professionals Currently Exempt Civil Service Research Associates Postdoctoral Research Associates Not Impacted Faculty (including Specialized Faculty) Physicians Medical Residents and Veterinary Medical Residents Attorneys Postdoctoral Fellows SPaRC Retreat 2016-2017

Compliance Options Convert employee to hourly non-exempt status Raise salary to meet or exceed $47,476 Convert employee to hourly non-exempt status Convert employee to salaried non-exempt status SPaRC Retreat 2016-2017

Employees newly eligible for overtime Must track and report hours worked Will receive their current salary plus pay for overtime hours at 1 ½ their hourly rate equivalent Academic employees will receive regular monthly pay Time worked will be reported on a biweekly basis Overtime will be paid on a biweekly pay event SPaRC Retreat 2016-2017

Policies under development Requirements related to authorization to work overtime Travel Comp Time Overtime and Leave usage reporting increments SPaRC’Ed 2015-2016

Agency-Specific Guidance The National Institutes of Health (NIH) and National Science Foundation (NSF) have provided information about the expected impact to project funding as a result of the increase to the FLSA minimum threshold to $47,476 Anticipating that other larger federal agencies will have some form of information or guidance available by Dec 1, 2016 For the Urbana campus funding received from NIH and NSF accounts for approximately 51% of federal funding and approximately 37% of all sponsored project funding SPaRC’Ed 2015-2016

NIH 2017 *Projected Stipend Levels Kirschstein-NRSA awards NIH 2017 Stipend levels, notice available at: http://grants.nih.gov/grants/guide/notice-files/NOT-OD-16-134.html Effective Dec 01, 2016 (planned) *Projected stipend levels to be finalized, additional guidance in coming months (NIH provided notice for planning) Years of Experience Actual 2016 Stipend *Projected 2017 Stipend $43,692 $47,484 1 $45,444 $47,844 2 $47,268 $48,216 3 $49,152 $50,316 4 $51,120 $52,140 5 $53,160 $54,228 6 $55,296 $56,400 7 or more $57,504 $58,560 SPaRC’Ed 2015-2016

NSF FAQs on FLSA NSF FAQs on FLSA available at http://www.nsf.gov/bfa/dias/policy/faqs/flsa_faqs.pdf Standard NSF rebudgeting policies apply for any budgetary changes resulting from implementation of the new rule Can rebudget as soon as an institutional policy is implemented that addresses the FLSA final overtime rule If rebudgeting changes the objectives or scope of the award, or if supplemental funding is needed, grantee should contact NSF to discuss; any supplemental funding is at the discretion of NSF SPaRC’Ed 2015-2016

NSF FAQs on FLSA (continued) Overtime compensation may be included in a proposal or award budget for employees not exempted from overtime Payment of overtime must be consistent with documented institutional policy and consistently applied. Grantee must comply with requirements in Uniform Guidance §200.430 “Standards for Documentation of Personnel Expenses” (i) “Allowable Activities” SPaRC’Ed 2015-2016

Impact of FLSA change to Sponsored Projects More individuals may be affected by higher threshold No change to treatment of overtime compensation, same as now Overtime paid from sponsored project funding must be: Consistent with University policies and procedures Not prohibited by sponsor’s policies or the individual award’s terms and conditions An “Allowable Cost” meeting this general criteria from UG §200.403: Necessary and reasonable for the performance of the sponsored project Allocable to the sponsored project Consistently treated Conforms to limitations/exclusions in policy, regulations, or award terms and conditions Adequately documented In accordance with GAAP Determining if an allowable cost -- Uniform Guidance §200.403  ”Factors affecting allowability of costs” SPaRC’Ed 2015-2016

Postdoctoral Research Associates new minimum salary threshold For the Urbana campus – Policy and FAQs available at: http://go.illinois.edu/flsa Effective Nov 16, 2016 the minimum Postdoctoral Research Associate salary will be $47,476 regardless of the service basis (applies uniformly to 9 and 12 month positions) Minimum salary applies to all current Postdoctoral Research Associates and newly hired Postdoctoral Research Associates Appointments must be full-time (total FTE of all positions = 100%) 0% appointments with no salary are not subject to FLSA SPaRC’Ed 2015-2016

Postdoctoral Research Associate salary threshold (continued) Postdoctoral Fellows are not subject to the provisions of FLSA (not considered employees) Postdoctoral Research Associates may not be reclassified as Fellows in order to avoid FLSA requirements New sponsored project proposals should use the $47,476 salary threshold Proposals that extend to 2020 or further need to account for an automatic increase in the FLSA threshold in Jan 2020; anticipated level is $51,168 SPaRC’Ed 2015-2016

What must you do? Ensure overtime charged to a sponsored project is adequately documented when it is paid out Determining if overtime is an allowable cost on a sponsored project What specifically was the employee doing that created the overtime? Explain what activity was necessary for the performance of the sponsored project and why it had to be undertaken outside of “normal” work hours Are you complying with institutional and departmental policies and procedures? Determine who approved the overtime to be worked? How was the overtime time tracked and reported? SPaRC’Ed 2015-2016

What else can you do? Be Proactive Implement procedures to help employees manage workloads and minimize the need for overtime Provide periodic training to employees regarding the requirements of charging time to a sponsored project and in maintaining adequate records to support overtime When it is known in advance that overtime will likely result due to the special nature of work necessary for the sponsored project, include overtime in the proposal budget (if this is not prohibited; be familiar with your sponsor’s policies and guidelines) SPaRC’Ed 2015-2016