DOL FINAL RULE REGULATIONS FAIR LABOR STANDARDS ACT 11/15/2016 University of Arkansas at Pine Bluff Human Resources Department

EXEMPT OR NOT EXEMPT THREE (3) REQUIREMENTS Employee is paid salary rather than hourly wages; Actual job duties (not just formal job title) show the employee meets one of the three exemptions for certain “white collar” employees: Executive, Administrative, or Professional (job duties test); and The employee makes more than the minimum salary specified in the regulations (salary test).

KEY PROVISIONS OF THE FINAL RULE Salary threshold for exempt status significantly increased…goes from $23,660 per year to $47,476; from $455 per week to $913 per week. Effective Date: December 1, 2016 Automatic updates every 3 years, beginning in 2020. Tied to the 40th percentile of the salaried workers in the lowest-wage census region DOL will provide notice of the proper calculation at least 150 days prior to the deadline.

The New Regulations will not: Change the requirement that non-exempt employees must be paid on the actual time they work. Change the ability of public employers, such as UA System units pay overtime with compensatory time (accrued at the premium 1.5 rate) until the cap of 240 hours is met. Change any of the job duties tests used to determine whether an employee who makes above a certain salary is exempt.

Paying for Time Worked Employers can: Employers cannot… Require supervisor’s permission before working overtime. Employees who ignore may be counseled/reprimanded. Round time to the nearest 15-minute increment. Actively prohibit employees from performing work before regular start time and usher employees out at the end of the work day. Use time sheets, time clocks, or other means to record time accurately (signed by employee). Have wages of full-time employees reflect 40-hour work weeks in most cases, after banking any earned comp time at 1.5 time and applying any sick leave, annual leave, etc. Ignore paying employees for hours worked over 40 hours. Must pay. Round hours so that rounding always goes against the employee. (E.g. Employee arriving at 7:49, rounding to 8:00 instead of 7:45. Accept work that benefits the department without paying for it. Decree that a non-exempt employee has worked 40 hours when it’s not tied to actual time records. Exceptions would be in the case of Leave without Pay and paying cash for overtime rather than comp time. Both should be rare events.

Three tests to claim White Collar Exemption Must be paid on a salary basis not subject to reduction based on quality or quantity of work (salary basis test) rather than, for example, on an hourly basis. Salary must meet a minimum salary level, $47,476 (salary level test). Employee’s primary job duty involve the kind of work associated with exempt executive, administrative, or professional employees (the standard duties test).

Executive https://www.dol.gov/whd/overtime/fs17b_executive.pdf Paid not less than $47,476 per year “Primary duty” must be managing the enterprise, or managing a customarily recognized department or subdivision (and managing at least 2 full-time employees. Have authority to hire or fire other employees, or employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees. Additional requirements provided in 29 CFR 541.100

Administrative https://www. dol. gov/whd/overtime/fs17c_administrative Paid on a salary or fee basis Paid salary not less than $47,476 per year Primary duty is non-manual work directly related to the management or general business operations of the employer. Duty include the exercise of discretion and independent judgment with respect to matters of significance E.g., Admissions counselors or student financial aid officers, depending on the employees specific job duties (as job title alone is insufficient to ensure that an employees satisfies the duties test). Additional requirements provided in 29 CFR 541 Subpart C

Academic Administrative Employees (Special Provisions) https://www.dol.gov/sites/default/files/overtime-highereducation.pdf Must be paid on a salary or fee basis of not less than the salary level, or be paid on a salary basis at least equal to the entrance salary for teachers in the same university. To the extent that this entrance is below the salary established in the Final Rule, academic administrative employees will be exempt is their salary equals or exceeds the entrance salary for teachers.

Primary duty of performing administrative functions directly related to academic instruction or training, including department heads, academic counselors and advisors, intervention specialists who must be available to respond to student academic issues, and other employees with similar responsibilities. E.g., academic counselors who perform work such as administering school testing programs, assistant with academic problems, advising students concerning degree requirements would satisfy the duties test for this exemption.

Professionals https://www.dol.gov/whd/overtime/fs17d_professional.pdf Have advanced knowledge in a field of learning ( e.g., lawyers, doctors, CPAs, certified trainers, librarians, psychologists, post-doctorate fellows) Teachers (including graduate teaching assistants) are exempt, regardless of the salary test, if their primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge. Teachers include instructors, professors, adjunct, and teachers of skilled and semi-skilled trades and occupations.

Coaches and Assistant coaches may fall under the exemption if their primary duty is teaching, which include instructing athletes in how to perform their sport. Teaching may also include instructing student athletes about physical health, teamwork, and safety. Adjunct instructors whose primary duty is teaching, tutoring, or lecturing. Like full-time faculty members, adjunct instructors are not subject to the salary level.

Students As a general rule students are limited to 20 hours per week and are not affected by the Final Rule. Students receiving a salary as a graduate teaching or research assistant will also not be affected even if they work more than 40 hours and are paid less than the new salary level.

More Resources https://www.dol.gov/whd/overtime/final2016/highered-guidance.pdf https://www.dol.gov/sites/default/files/overtime-highereducation.pdf

Question & Answer ??? Special thank you to: David Curran Associate General Counsel University of Arkansas System