How will your nonprofit or business Welcome NEW Overtime Mandates How will your nonprofit or business get the job done now? Presenting Sponsor:

Michelle Griffin Young EVP, Government & External Affairs

Presenting Sponsor

Nonprofit Sponsor

Nonprofit Sponsor

Dorota Gasienica-Kozak, Esq Dorota Gasienica-Kozak, Esq. Partner, KingSpry Law Firm & Chair, Public Policy Committee

Congressman Charlie Dent United States Congress, 15th District

John E. Freund, III, Esq. Partner & Education Chair KingSpry Law Firm

Keely J. Collins, Esq. KingSpry Law Firm

New Overtime Regulations: How will your nonprofit or business get the job done? Presented By: Keely Jac Collins, Esq. King, Spry, Herman, Freund & Faul, LLC

Who Does the Final Rule Impact? FLSA - applicable entities or individuals “White Collar” employees

What does the Final Rule do? Raises salary level Regular updates

What is a “white collar” employee? “Salary” Amount Duties

Duties Test Executive Administrative Professional

A word on HCE’s Highly Compensated Employees (HCE) must satisfy a minimum duties test under federal law. HCE are impacted under federal law, but the PA Minimum Wage Law does not recognize the HCE exemption.

Threshold Amount Current December 1, 2016 until January 1, 2020 EAP $455 weekly/$23,660 for full-year worker $913 weekly/$47,476 for full-year worker Highly Compensated (fed law only) $100,000 annually $134,004 annually

What are the major changes? Salary of white collar workers raised to 40th percentile HCE salary raised to 90th percentile (federal law only) Automatically updated every three years Non-discretionary bonuses / incentive payments count

Paid at least quarterly How can bonuses be used? Nondiscretionary Up to 10% Paid at least quarterly

Why is this Game Changing? Loss of exempt status Overtime for 4.2 million workers $1.2 billion per year in extra salary

Is Your Non-profit required to comply? Covered Entity? Covered Individuals? When in Doubt, Call Your Attorney!

Now what do we do? Research Strategize Communicate

What should you be thinking about to make this happen by December 1? Research/ Strategize What should you be thinking about to make this happen by December 1?

Step One: Who Does this Impact? Which employees are paid less than $913 per week? Are bonuses offered? For employees who do not work a full year but are paid a full year, DOL guidance allows for the yearly salary to be prorated over the weeks actually worked.

Step Two: What do the Impacted Employees Actually Do? Remember, the consequence of reclassification is overtime payment. Are these employees on call? Do they regularly work outside of regular business hours? Do they have an iPhone, respond to emails, calls, texts, etc.?

Step Three: Consider Reorganization Can any of the on-call responsibilities or extra responsibilities be shifted to another worker? Would it be possible to give just a few employees raises to absorb the work shifted from other previously exempt workers?

Step Four: Decide an appropriate hourly Wage Avoid reductions in pay Salary may still be paid, as long as overtime is paid, according to federal and state law.

Step Five: Develop/Revise policy All policies for non-exempt employees should state that the employees may not work over 40 hours per week without the approval of a supervisors. Breaks of 30 minutes or more should be taken away from desk/work area Remember: The consequence for violation should be discipline, not docking pay. Even unauthorized overtime is still overtime and must be compensated.

Policies should address tech devices Which employees may telecommute? How is time tracked? What are the parameters for telecommuting?

Step Six: Communicate Decision to Impacted Employees Employees should understand the reason for the change and know they are valued.

Step Six: Remind managers about overtime issues Even the best policies, if violated without consequences, expose an organization to liability. Remind managers that non-exempt employees may not ever work off the clock and discipline any manager who allows a non-exempt employee to work without reporting the time Make sure it is clear to managers which employees are non-exempt (or will be non-exempt come December 1)

Step Seven: Implementation Any FLSA status change or salary increase necessary for compliance must be implemented by the pay period that includes December 1, 2016. Must be done for the full pay period

How can this be a good thing? Change “on the line” exempt statues without drawing the DOL or employee’s attention. Reorganize management for efficiency. Reclassification will become more common.

Q & A What issues are you anticipating in your organization? Do you know which employees will be impacted? Do you have a plan that was not already discussed?

Thank you for your Time! Any questions that I didn’t answer? Let me know! kcollins@kingspry.com

Bill Vogler Pinebrook Family Answers & Public Policy Committee Liaison

Paul Pierpoint VP Community Education

Matt Pye Just Born Quality Confections & Chair, Nonprofit & Business Partners Council

Thank you for attending!!