MINIMUM SALARY RULE US Dept of Labor – Final Rule NPUC Fall Educational Leadership Retreat September, 2016 MINIMUM SALARY RULE US Dept of Labor – Final Rule We are living in an interesting and significant time, both in the history of the world and in the history of the Seventh-day Adventist Church. Some believe that the 2015 General Conference will address issues that will end up dividing the church. And as I think about the headline issues of recent times . . . the Cape Town summit on homosexuality, the NAD Church Governance committee wrestling with recommendations for restructuring church operations including emotionally charged issues like tithe distribution and regional conferences, women’s ordination, even the new Bible curriculum standards and the Encounter curriculum . . . I can see why some are anxious. But this oft-quoted statement from Mrs. White’s writings come to mind: “We have nothing to fear for the future, except as we shall forget the way the Lord has led us, and His teaching in our past history.”{LS 196.2} So this morning, I am going to review with you some of these lessons from the past which were triggered by George Knight’s book, A Search for Identity: The Development of Seventh-day Adventist Beliefs. I’ve chosen 4 lessons, none of which are new, and which, I will review with you using an old-fashioned, now much-frowned upon technique in education, the pop quiz.

Fair Labor Standards Act (FLSA) Establishes for employees: Federal minimum wage (currently $7.25 per hour) Standardized work week (40 hours) Overtime compensation at time-and-a-half pay. Some employees are exempt from FLSA

Fair Labor Standards Act (FLSA) Who are exempt employees? Executive, Administrative, and Professional personnel Classified by duties, not titles What are they exempt from? Overtime compensation (standardized work week) NOT exempt from minimum wage

Fair Labor Standards Act (FLSA) Executive employee duties criteria: Manage an enterprise, department, or subdivision as a primary duty Direct the work of at least two full-time Have authority to hire and fire, or to make recommendations on hiring and firing

Fair Labor Standards Act (FLSA) Administrative employee duties criteria: Responsible for office work directly related to management or general operations or be responsible for work directly related to academic instruction or training at a school Regularly exercise discretion and individual judgment in matters of significance, and have authority to make important decisions Regularly assist an owner or executive or perform work that requires special training or experience under only general supervision

Fair Labor Standards Act (FLSA) Professional employee duties criteria: Individual has knowledge of an advanced type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study or has talent in a recognized field of artistic endeavor The work must require the consistent exercise of discretion and judgment in its performance The work must be predominantly intellectual and varied in character, not routine physical, mental, manual, or mechanical work

Fair Labor Standards Act (FLSA) Who are exempt employees?

Fair Labor Standards Act (FLSA) Who are exempt employees? Principal Teacher Maintenance Business Mgr Dormitory Deans Marketing/Development OTHERS??

Fair Labor Standards Act (FLSA) Who are non-exempt employees? Non-Executive, Non-Administrative and Non-Professional Hourly wage employees

USDOL Final Rule (Dec 1, 2016) What changed for exempt employees? Raises the minimum salary of an exempt employee to $913 per week or $47,476 annually (from $455 wk/$23,660 yr.) Creates automatic updating of the minimum salary every three years with the next increase Jan 1, 2020. Amends the salary basis test to allow employers to use nondiscretionary bonuses and incentive payments (including commissions) to satisfy up to 10 percent of the new standard salary level

USDOL Final Rule (Dec 1, 2016) Are there any exempt employees (FLSA) that are exempt from the Final Rule and the new minimum salary?

USDOL Final Rule (Dec 1, 2016) YES Are there any exempt employees (FLSA) that are exempt from the Final Rule and the new minimum salary? Educational Administrators Teachers Educators have always had “special classification” under the Professional exempt employee group. YES

USDOL Final Rule (Dec 1, 2016) Which exempt employees (FLSA) at school are NOT exempt from the Final Rule and the new minimum salary? Business Mgr Development Dir Dormitory Deans Others??

USDOL Final Rule (Dec 1, 2016) What did NOT change for exempt employees? The “duties” test for salary/exempt classification All Executive, Administrative and Professional employees remain as classified Educational Administrators and Teachers remain salaried/exempt, BUT the new final rule (minimum salary) does not apply.

USDOL Final Rule (Dec 1, 2016) What must we do to meet the Final Rule? Nothing for principals and teachers! For others - review and revise (increase) salary to meet the new minimum salary ($913/wk or $47,476/yr). Cost of Living (ERI) can be included Administrative Allowance can be included, but is limited to not more than 10% of total compensation

USDOL Final Rule (Dec 1, 2016) What else should we be doing? Check state employment laws Be part of the conversation with conference HR Provide input as we develop Educ Code policy and/or language for future practice

USDOL Final Rule (Dec 1, 2016) QUESTIONS?