FLSA UPDATE 2016 SCASBO FALL CONFERENCE Thomas K. Barlow Childs & Halligan, P.A. November 2, 2016

Scope DOL Changes Exempt Salary Threshold Effective December 1, 2016 Review of White Collar Exemptions FLSA FAQ Coping Mechanisms

New DOL Regulations Salary threshold for white collar exemptions goes from $455/week to $913/week “Weekly” vs. annual Teachers vs. other exempt employees Escalator Provision Duties tests unchanged

Practical Application Weekly vs. annual Limiting overtime Compensatory time Properly calculating compensable time Properly paying overtime

Executive Exemption $913 week, salary basis Primary duty -management 2 or more full time subordinates or equivalent Hiring/firing input No “percentage” test

Executive Exemption Examples Transportation supervisor, food service supervisor, maintenance supervisor, CFO, department heads, building management (principal, assistant principal) Potentially – highly paid cafeteria managers, custodial supervisors

Administrative Exemption $913 week, salary basis Primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; Exercise of discretion and independent judgment with respect to matters of significance. No “percentage” test

Administrative Exemption Examples Directors who don’t supervise 2 or more, guidance counselors*, literacy/math coach* Often attempted, usually unsuccessful Board secretary Principal’s secretary Bookkeeper Non-MSW social workers Non-certified “peacekeepers” at school level Computer technicians who don’t supervise, write code, budget or purchase

Professional Exemption TEACHERS ARE EXEMPT Non-teachers At least $913/week Primary duty = work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the: Consistent exercise of discretion and judgment; Advanced knowledge in a field of science or learning; and Advanced knowledge normally acquired by a prolonged course of specialized intellectual instruction.

Professional Exemption Examples CATE teachers RN school nurses Staff accountants who don’t supervise or run the department Guidance counselors MSW/LMSW caseworkers BUT NOT: Teacher’s aides ISS/study hall aides Positions requiring a bachelor’s degree (case worker, parent liaison)

FLSA FAQ

FLSA FAQ How do we calculate and pay overtime for those employees who have been rendered nonexempt by the new salary threshold?

Options Time and a half or 1.5 hours of comp time over 40 hours Treat as fixed salary for fluctuating workweek and pay half-time premium

Fixed Salary for Fluctuating Workweek Requirements - Clear mutual understanding - Practice over time may be sufficient, policy, sign-off better - Hours vary from week to week, but salary designed to compensate for all hours worked - No deductions for weeks < normal work hours

Fluctuating Workweek - Methodology Weekly salary divided by weekly hours Half-time premium times overtime hours Effect is lower rate for more overtime worked

Example – Fluctuating Workweek Computer Claire is paid salary of $800 a week Week 1 – 45 hours Overtime due = $44.45 $800 / 45 hours = $11.78/hour $17.78 x .5 = $8.89 HTP $8.89 x 5 hours = $44.45 Week 2 – 50 hours Overtime due = $80.00 $800 / 50 hours = $16.00/hour $16 x .5 = $8 HTP $8 x 10 hours = $80.00

Traditional Method Week 1 – 45 hours Regular Rate $20/hour ($800/40 hours) Overtime due $150 $20/hour x 1.5 = $30/hour overtime rate $30 x 5 OT hours = $150 Week 2 – 50 hours Overtime due $300

Fluctuating Workweek Cons Requires weekly math exercise Employees don’t understand it/resent it More $ in neighboring district? Hard to transition if you’re using traditional method Comp time?

FAQ (Continued) We have some people in our District approaching retirement who have huge balances of unused compensatory time. Is there anything we can do to lessen the impact of a big payout when they retire and prevent the accumulation of large comp time balances in the future?

FAQ (Continued) We have a bus driver whose daughter is on the volleyball team. She wants to volunteer to drive the activity bus to away games. Is this a problem?

FAQ (Continued) I have an employee who rides to work with her spouse and starts work half an hour early every day. Does she have to be paid for that time if I tell her that she's not supposed to be working yet?

FAQ (Continued) We have teacher’s aides who work in after-school programs. Are we on the hook for overtime based on the hours they work in those programs too?

FAQ (Continued) Certified teacher wants to drive a bus. Do we have to keep up with hours and pay overtime based on bus driving duties?

FAQ (Continued) Our teacher’s aides do a lot of teaching and some of them have college degrees and are certified. Can we treat them as exempt professionals?

FAQ (Continued) Can we use the “occasional and sporadic” exception to pay a teacher’s aide a flat rate for taking tickets at football games? How about a custodian who cleans up after basketball games?

FAQ (Continued) We have social workers/case managers who have college degrees but we don’t require MSW or LMSW. Can we treat these employees as exempt professionals?

FAQ (Continued) Do school nurses qualify for the academic administrative support exception that allows entry-level teacher salary threshold?

FAQ (Continued) Can/should we add coaching stipends into salary for purposes of determining whether a non-teacher meets the salary threshold?

Coping Mechanisms Use comp time Limit overtime hours Promote/raise those on the edges Automate timekeeping Fixed salary, fluctuating workweek Audit yourselves