1. ©May 2015 Business Training Services, Inc. All rights reserved. Presented by Pamela Shull, CPP, SPHR praudit@aol.com

2. ©2015 Business Training Services, Inc. All rights reserved.  Workweek ◦ A seven day period that you designate (Sunday – Saturday, or Tuesday – Monday, etc.) ◦ What happens to an employee during that seven day period determines their ultimate compensation  Work Schedule ◦ The time frame in which an employee performs their job duties (e.g. 9 – 5, Monday – Friday)  Pay Cycle ◦ The frequency with which you pay an employee (e.g. every week, every 2 weeks, twice a month, etc.) 2

3. ©2015 Business Training Services, Inc. All rights reserved.  All hours during which the employee is under the employer’s control, even if the time is unproductive, so long as the time spent is for the employer’s benefit  Federal law does not have a maximum hour limit  Individual state laws may be written to restrict total hours or days an employee may work (e.g. California’s 8-hour a day rule) 3

4. ©2015 Business Training Services, Inc. All rights reserved.  Must be kept at least 3 years  Must be as accurate as possible  Can be: ◦ Electronic ◦ Manual ◦ Time Cards ◦ Time Sheets ◦ Time Logs ◦ Absence of a Time Record 4

5. ©2015 Business Training Services, Inc. All rights reserved.  FLSA does not limit the number of hours an employee may work, either daily or weekly (with the exception of minors 14 – 16 years of age)  Overtime pay must be calculated on a weekly basis at time and one-half the regular rate of pay for all hours worked in excess of 40 hours 5

6. ©2015 Business Training Services, Inc. All rights reserved.  FLSA contains an alternative method of calculating overtime pay for nonexempt employees in specific industries ◦ Hospitals, residential care facilities ◦ Public sector agencies  Comp time in lieu of overtime pay is not allowed in the private sector ◦ Public sector agencies are allowed ◦ Unions may negotiate comp time 6

7. ©2015 Business Training Services, Inc. All rights reserved.  Employee can be paid salaried or hourly. ◦ Must be defined in job description with a FLSA status line  Nonexempt – hourly  Nonexempt – salaried fixed  Nonexempt – salaried fluctuating  Nonexempt –salaried BELO 7

8. ©2015 Business Training Services, Inc. All rights reserved.  Can be paid fixed or fluctuating or BELO ◦ Pay fixed when: employee’s schedule is a fixed schedule and rarely has overtime ◦ Pay fluctuating when: employee’s schedule will always fluctuate and almost always has overtime – but you never know how much ◦ Pay BELO when: employee’s schedule is based on a defined number of hours including overtime  Must keep a time record 8

9. ©2015 Business Training Services, Inc. All rights reserved.  Jim works 48 hours one workweek. His salary is $3000 per month $3000 x 12 = $36,000 $36,000 ÷ 52 = $692.31 $692.31 ÷ 40 = $17.31 $17.31 x 1.5 x 8 = $207.72 $692.31 + $207.72 = $900.03 9

10. ©2015 Business Training Services, Inc. All rights reserved.  Jim works 48 hours one workweek. His salary is $3000 per month $3000 x 12 = $36,000 $36,000 ÷ 52 = $692.31 $692.31 ÷ 48 = $14.42 $14.42 x.5 x 8 = $57.68 $692.31+ $57.68 = $749.99 10

11. ©2015 Business Training Services, Inc. All rights reserved.  Jim works 48 hours one workweek. His salary is $3000 per month to work 48 hour week. $3000 x 12 = $36,000 $36,000 ÷ 52 = $692.31 $692.31 ÷ 52 = $13.3136 $13.3136 x 40 = $532.55 $13.3136 x 1.5 x 8 = $159.76 $532.55 + 159.76 = 692.31 11

12. ©2015 Business Training Services, Inc. All rights reserved.  Rounding of an employee’s starting and stopping times is permitted  Time off for holidays or leave does not count toward overtime  FLSA does not supersede any state or local laws that are more favorable to the employee 12

13. ©2015 Business Training Services, Inc. All rights reserved.  Suffered or permitted rules – You let it happen – you have to pay it ◦ Employees who choose to work after their shift is over ◦ The reason for the work is immaterial ◦ Even if work is done at home  A violation of FLSA occurs when, as a result of unreported hours worked, an employee’s hourly wage for a pay period falls below the minimum wage  A violation occurs if, as a result of “off-the- clock” work, an employee is not paid for hours worked in excess of 40 hours in a workweek 13

14. ©2015 Business Training Services, Inc. All rights reserved.  If an employee is offered a lunch break they must have 30 minutes uninterrupted to not be paid for the lunch break. If they get interrupted during the 30 minutes – they must be paid.  If an employee is offered a rest break – all rest breaks 20 minutes or less must be paid 14 State laws will have to be taken into consideration also

15. ©2015 Business Training Services, Inc. All rights reserved.  7 minute rounding rule allowed – if applied consistently  Caution: Fleetwood Enterprises ($7.35 million) for long-punching violations 15

16. ©2015 Business Training Services, Inc. All rights reserved.  You can round to the nearest 7 minutes. ◦ Example: Employee is scheduled to work 8:00 am.  The employee times in at 7:53. You can round up to 8:00 am.  The employee times in at 7:52. You round backwards to 7:45 am or pay minute by minute ◦ Example: Employee is scheduled from 8:00 am to 4:30 pm.  Total hours for the day are 8 hours and 7 minutes. You can pay the 8 hours  Total hours for the day are 8 hours and 8 minutes. You pay by the minute or round to 8 hours and 15 minutes.  All rounding must be consistent. ◦ Company must have a stated policy regarding rounding practices.  Some states do not allow rounding. 16

17. ©2015 Business Training Services, Inc. All rights reserved.  Not counted as working time (must meet all four requirements) 1.Attendance is outside the employee’s regular working hours 2.Attendance is voluntary 3.The course, lecture or meeting is not directly related to the employee’s current job. 4.The employee does not perform any productive work during such attendance.

18. ©2015 Business Training Services, Inc. All rights reserved. Type of Work ExampleExplanationPaidUnpaid Preliminary and postliminary work Clothes changing Caring for tools Washing up or showering Medical attention Cleaning and laundering uniforms or other distinctive clothing If required by the nature of the work Part of principal activities If it is required due to nature of work During working hours at the employer’s direction Required by employer XXXXXXXXXX 18

19. ©2015 Business Training Services, Inc. All rights reserved. 19 Type of Work ExampleExplanationPaidUnpaid Waiting TimeOn duty Off Duty Of short duration and the employee cannot use the time for their own benefit Completely relived from duty and allowed to leave the job Relieved until a definite or specific time Relieved long enough for employee to use the time effectively for his/her own purpose X X

20. ©2015 Business Training Services, Inc. All rights reserved. 20 Type of Work ExampleExplanationPaidUnpaid Waiting TimeRequired to remain on call on the employer’s premises or so close that he/she cannot use the time effectively for their own purposes Predominantly for the employer’s benefit X On-Call Time Required to leave word at his home or with company officials where he may be reached Few geographic restrictions Did not specify a response time requirement where he may be Actual call-backs were infrequent X

21. ©2015 Business Training Services, Inc. All rights reserved. 21 Type of Work ExampleExplanationPaidUnpaid Show-up, Call-in, or Reporting time Required to wait 10 to 15 minutes before being advised no work is available Engaged to waitX Stand-by time Machinery breakdown Stand by ready for duty X Sleeping Time Less than 24-hour “tour of duty” 24 hours or longer “tour of duty Residing on employer’s premises Up to 8 hours can be excluded Reasonable agreement X XXXX

22. ©2015 Business Training Services, Inc. All rights reserved. 22 Type of Work ExampleExplanationPaidUnpaid Travel TimeCommute Travel during the workday Call back or emergency calls Out-of town travel for the day Home-to-work Part of the employer’s principal activity Travel a substantial distance Traveling for employee’s home to public transportation site Travel for employee’s home or from public transportation site XXXX XXXX

23. ©2015 Business Training Services, Inc. All rights reserved. 23 Type of Work ExampleExplanationPaidUnpaid Travel TimeOvernight travelOccurs during the employee’s regular working hours (even if travel is on a non- work day) X Time spent in court or other legal proceedings Related to the principal duties of the worker’s job Suffered or permitted benefit of the employer X

24. ©2015 Business Training Services, Inc. All rights reserved.  Private Entities ◦ Time off in lieu of pay is allowed if:  Time off is taken in the same week it is worked (hour for hour – usually referred to as “make-up time)  Example:  Workweek is Sunday thru Saturday. Employee works extra on Monday and leaves early on Tuesday. Does not go over 40 by the end of the week  Time off is taken within the same pay period at time- and-a-half  Example:  Workweek is Sunday thru Saturday. Employee works 45 hours 1 st week of 2 week pay cycle. Must take 7-1/2 hours off (with pay) in the second week. 24

25. ©2015 Business Training Services, Inc. All rights reserved.  Public Entities ◦ Earned at time-and-a-half ◦ Agreement or understanding is reached prior to performance of work. (includes collective bargaining units) ◦ Employer does not have to have the same agreement or understanding with employees in different departments ◦ Can be an express condition of employment ◦ There is no “use it or lose it” allowed ◦ Employer can demand employee take comp time off at the employer’s discretion 25

26. ©2015 Business Training Services, Inc. All rights reserved.  Public Entities ◦ Employees must be allowed to take comp time within a reasonable period of time, once they make the request. Employer can refuse a specific request if it would “unduly disrupt” the employer’s operations. ◦ Limits in bank:  240 hours for non-emergency personnel  480 hours for emergency personnel  Agency can designate lower limit  Requires accurate recordkeeping to show given and used according to law. 26

27. ©2015 Business Training Services, Inc. All rights reserved.  Jim earns $8.50 per hour and worked 40 hours in the workweek. Jim damaged a company tool valued at $85 and his employer wants to deduct the cost of the tool from his next paycheck. How does calculation work? ◦ $8.50 - $7.25 = $1.25 ◦ $1.25 x 40 = $50.00 ◦ The maximum deduction the employer can make to this workweek in $50.00. 27 Many states do not allow this deduction at all.

28. ©2015 Business Training Services, Inc. All rights reserved.  Department of Labor requires: ◦ Time records on all nonexempt employees ◦ Pay records showing exactly how the employee was paid for the time period ◦ Records must be kept at least 3 years ◦ If there are violations:  Dept. of Labor can go back 3 years and charge 3 times the amount of the violation  If it is a willful violation – they can go back indefinitely  We need to know when a nonexempt employee is “on the clock” so our records are as accurate as possible and the employee is paid correctly. 28