1. Changes to the Fair Labor Standards Act
4/23/2018
Changes to the Fair Labor Standards Act
Management Information
UCF Human Resources
November 2016

2. 4/23/2018
Why are we here?
Let’s start with this video from the Department of Labor that explains the new ruling on overtime pay.
1975 = 62%
Today = 8%
Intent
Planning/implementing
culture

3. Today’s Agenda Overview of the Fair Labor Standards Act (FLSA)
4/23/2018
Today’s Agenda
Overview of the Fair Labor Standards Act (FLSA)
What is Changing?
Specific Guidelines for Higher Education
Items to Note
Next Steps
Through this presentation, we will concentrate specifically on the new salary threshold provision of FLSA. – considering this is the biggest change in the law.
2. With the items to note, we will discuss topics that managers/supervisors need to be made aware of including training needs in regards to timekeeping, leave accrual changes and other items.

4. Overview of the Fair Labor Standards Act (FLSA)
4/23/2018
Overview of the Fair Labor Standards Act (FLSA)
First, a very brief overview of the Fair Labor Standards Act (or FLSA).

5. Overview of the Fair Labor Standards Act (FLSA)
4/23/2018
Overview of the Fair Labor Standards Act (FLSA)
First enacted in 1938, FLSA is a Federal Wage and Hour law that provides employees with wage and hour protections. FLSA establishes minimum wage, overtime pay, child labor standards, and recordkeeping requirements affecting both full and part-time workers.
(Cover the slide)
Although FLSA covers a variety of wage and hour issues, the new ruling specifically addresses changes in regard to overtime eligibility.

6. “Exempt” vs. “Non-Exempt”
4/23/2018
“Exempt” vs. “Non-Exempt”
An “exempt” position is not eligible for overtime pay.
A “non-exempt” position is eligible and must receive overtime pay for any hours worked above 40 hours in one work week.

7. Determining Exemption Status
4/23/2018
Determining Exemption Status
FLSA is comprised of three tests that determine if an employee is eligible (non-exempt) or exempt from overtime pay:
Duties Test
Salary Basis Test
Salary Level Test
If the position fails even one of these 3 tests, the position is non-exempt.

8. 4/23/2018
Duties Test
The employee’s job duties must primarily involve executive, administrative, professional, computer or outside sales duties (also known as “white collar” exemptions).

9. 4/23/2018
Salary Basis Test
The employee must receive a predetermined, fixed salary that is not subject to reduction due to variations in quality or quantity of work performed.
(Cover the slide)
In other words, the employee’s salary doesn’t fluctuate from week to week based on their productivity or hours worked.

10. 4/23/2018
Salary Level Test
The employee must be paid a minimum salary as determined by the FLSA.

11. 4/23/2018
What is changing?

12. Salary Level Increases
4/23/2018
Salary Level Increases
The current salary level for overtime eligibility was set in 2004 at $455 per week ($23,660 per year).
As of December 1, 2016 the new FLSA salary threshold has been set at $913 per week ($47,476 per year).
(Read bullets)
There is another category for highly compensated employees, however this provision doesn’t apply to any positions at UCF. The threshold for HCE is currently 100,000 and is changing to 134,004. The rule is the HCE must be paid the minimum threshold of $913 a week and perform at least one exempt duty.
26.1 Pay period = $47,659

13. 4/23/2018
Automatic Updates
The salary threshold will now be reviewed and adjusted every 3 years beginning January 1, 2020.
The salary standard is equal to the 40th percentile of weekly earnings of full time salaried worker in the lowest wage Census Region.
The Department of Labor will publish updated rates at least 150 days before the effective date.
The lowest wage Census Region is currently the South.
Up until now, the salary threshold requirement has not had any automatic adjustments. In fact, it hasn’t changed since 2004
UCF’s market review & salary ranges based on 25th percentile, average, median, and 75th percentile.
Because of the 3 year review cycle, employees could theoretically move from exempt to non-exempt, back to exempt, and so on as raises are earned and the threshold is updated.

14. 4/23/2018
What is not changing?

15. What is not changing? Base rate of pay Job Title
4/23/2018
What is not changing?
Base rate of pay
Job Title
Benefits including FRS and medical coverage.
(Read bullets)
Market reviews on request after January.

16. Specific Guidelines for Higher Education
4/23/2018
Specific Guidelines for Higher Education
The Department of Labor has added some unique provisions that apply to higher ed.

17. 4/23/2018
Teachers
Any teacher, not just higher ed teachers are considered exempt from overtime. The salary threshold does not apply.
Teachers are exempt if their primary duty is teaching, tutoring, instructing, or lecturing.
Teachers include professors, Adjunct instructors, and teachers of skilled and semi-skilled trades and occupations.

18. Graduate and Undergraduate Students
4/23/2018
Graduate and Undergraduate Students
Students engaged in research under a faculty member’s supervision in the course of obtaining a degree are not subject to overtime.
(Cover the slide)
These students are considered to be in an educational relationship, not an employment relationship and are not subject to overtime.
Differentiate between GRA, GTA and GA.

19. Student Resident Advisors
4/23/2018
Student Resident Advisors
Enrolled Student Resident Advisors (RAs) are not eligible for overtime.
Students enrolled in an educational program and receive reduced room and board charges or tuition credit for being an RA are also not eligible for overtime.

20. 4/23/2018
Academic Advisors
The duties of Academic Advisor positions fall under a special “Academic Administrative Personnel” exemption.
Academic Advisor I positions will non-exempt unless the salary is over the threshold.
All other levels of Academic Advising will become exempt.
Administrative employees that are in higher educational institutions and that interact with students outside the classroom may be subject to a special salary threshold. Academic Advisors fall in this category.
Acad Adv II; Asst/Assoc Acad Supp Svc; Dir Aca Supp Svs.
Fac $30K = 769
Fac $40K = 1,026
37,969 = 727
33,750 = 647
$42,715 = 818

21. 4/23/2018
Postdoctoral Fellows
UCF will be compliant with the new rule in regard to post-docs. Part time post-docs will become non-exempt.
We are working with Academic Affairs and the Office of Research on a plan and communication. We will either pay overtime or raise to the new threshold. More to come.
47,659

22. 4/23/2018
Items to Note
Management needs to be aware of other issues that could arise when former exempt employees become non-exempt.

23. 4/23/2018
Timekeeping
Exempt employees going to non-exempt will now be required to keep track of all hours worked. They need to be trained and fully understand the timekeeping procedures for non- exempt employees.

24. Compensatory Time Phase Out
4/23/2018
Compensatory Time Phase Out
Compensatory Overtime and Special Compensatory time will be phased out, with payouts of remaining balances being paid out June 30, During this phase-out time, supervisors should encourage employees to use their banked compensatory time before other types of leave.

25. USPS Exempt to non-exempt effective 11/18/2016
Leave and Overtime
USPS Exempt to non-exempt effective 11/18/2016
Grandfathered group
6.77 to 6.00 annual leave hours (new)
Maximum payout annual leave hours
Year End Rollover – in excess of 352 annual leave hours rolls into sick leave balance
Personal Holiday (new)
Bereavement Leave (new)
Eligible for overtime pay (new)
New hires (current structure)
4.00, 5.00 or 6.00 hours annual leave hours based on years of service
Maximum payout annual leave hours
Year End Rollover – in excess of 240 annual leave hours rolls into sick leave balance
Personal Holiday
Bereavement Leave
Eligible for overtime pay
With feedback from VPs and approvals from Millican Hall, the structure of leave accruals has changed. As you can see on the screen, current USPS Exempt employees moving to a non-exempt category will see a decrease in their annual leave accrual from 6.77 hours biweekly to 6.00 hours biweekly. You will now be eligible for one Personal Holiday a year, and bereavement leave. The reason for the reduction in leave accruals is due to the fact that you are now eligible for overtime pay. You will keep you annual leave maximum payout and rollover based on 352 hours.

26. Leave and Overtime Continued
A&P Exempt to non-exempt effective 11/18/2016
Grandfathered group
6.77 to 6.00 annual leave hours (new)
Maximum payout annual leave hours
Year End Rollover – in excess of 352 annual leave hours rolls into sick leave balance
Personal Holiday (new)
Bereavement Leave (new)
Eligible for overtime pay (new)
New hires (new structure)
6.00 hours annual leave hours
Maximum payout annual leave hours
Year End Rollover – in excess of 352 annual leave hours rolls into sick leave balance
Personal Holiday
Bereavement Leave
Eligible for overtime pay
This slide is for the A&P employees who are going from Exempt to Non-exempt. You will see a decrease in your annual leave accrual from 6.77 hours biweekly to 6.00 hours biweekly. You will now be eligible for one Personal Holiday a year, and bereavement leave. Again, the reason for the reduction in leave accruals is due to the fact that you are now eligible for overtime pay. You will also keep your annual leave maximum payout and rollover based on 352 hours.

27. 4/23/2018
Dual Compensation
Non-exempt employees performing a secondary job at UCF must report all hours worked on their timesheet. Hours worked from a secondary job could result in overtime.
There are about 24 exempt employees going to non-exempt that are also receiving dual comp.

28. After-Hours Electronic Access
4/23/2018
After-Hours Electronic Access
Checking work and responding to work related texts after-hours is considered working and non-exempt employees must be paid for all time accessing these electronic mediums.
Many employees are accustomed to checking their s and replying to calls and texts after hours. Supervisors are encouraged to review and adjust the work area practices and expectations of after-hour electronic use.
Re-think timing of s and texts to employees. If you are working late and must send s to non-exempt employees, consider using the “Delivery Delay” option in Outlook.

29. 4/23/2018
Lunch Breaks
Non-exempt employees should have an “interruption free” lunch.
Employees may spend their lunch time at their desk, however answering the phone or returning s are both considered work and must be approved and compensated. Try to encourage your non-exempt employees to leave the work area during their lunch time.

30. 4/23/2018
Work Distribution
Ensure there is not an unequal distribution requiring some employees to constantly work longer hours and possibly be subject to overtime when the non-exempt peers don’t receive any extra pay.
1. It is very likely you could have two employees working side by side performing the same duties, one being exempt and the other non-exempt.
2. Managers need to be cognizant of situations where the exempt employee may be working many extra hours to get the work done, while the non-exempt employee as a rule leaves on time.
3. On the other hand, if the non-exempt employee works longer hours, they could possibly earn more than the exempt employee due to overtime.

31. Travel and On-Call/Call-Back Procedures
4/23/2018
Travel and On-Call/Call-Back Procedures
These practices have not changed, but change in exempt status could result in unforeseen overtime. .
The travel and on-call/call-back procedures have not changed, but should be reviewed with the former exempt employee if their position requires travel or on-call/call back responsibilities. Schedule or work distribution adjustments may need to be implemented.

32. 4/23/2018
Next Steps

33. Training Supervisor Training Affected Employee Training
4/23/2018
Training
Supervisor Training
Affected Employee Training
HR Liaison Training
Managers need to ensure all affected employees enroll in the HR training through myUCF.
This training includes the changes in timekeeping requirements, OT approval requirements, leave accruals, electronic access and other items of note.
Employee training sessions begin Nov 1st and run through Nov 7th
There will also be changes in the ePAF system and the Recruitment process. HR Liaisons will be required to attend a special session that cover these changes. Enrollment for these sessions is also through myUCF and will be held on Nov 2nd, Nov 7th, and Nov17th.

34. Review Practices Electronic Access Workload Distribution
4/23/2018
Review Practices
Electronic Access
Workload Distribution
Travel and On-Call Requirements
Dual Comp
Managers need to review and when necessary, adjust practices on after-hours electronic access.
They also need to look at the distribution of work. Are any of the affected employees or their peers constantly working extra hours? If so, the workload needs to be redistributed, or you will be responsible for paying overtime.
If any of your affected employees are required to travel or be on call, review the UCF policies and adjust duties or scheduling if needed.
Non-exempt employees receiving dual comp may need to either have their schedule adjusted or forego the secondary job if overtime is not approved.

35. 4/23/2018
Additional Resources

36. http://hr.ucf.edu/ This Just In Human Resources Updates
4/23/2018
This Just In
Human Resources Updates
*New* 2016 FLSA Changes

37. US Department of Labor Final Rule: Overtime
4/23/2018
UCF FLSA Update
US Department of Labor Final Rule: Overtime
Link to Department of Labor Video
UCF Training and Travel Pay Guidelines
UCF On-Call and Call-Back Policy
UCF Overtime Policies

38. 4/23/2018
Questions?

39. After-Hour Electronic Access
4/23/2018
Timekeeping
Comp Time Phase Out
Leave Accrual Changes
After-Hour Electronic Access
Exempt employees going to non-exempt will now be required to keep track of all hours worked. They need to be trained and fully understand the timekeeping procedures for non-exempt employees.
Comp time will be phased out, with payouts of remaining balances being paid out at the end of FY 18. During this phase-out time, supervisors should encourage employees to utilize comp time before other types of leave.
Leave accruals and personal days are different for exempt and non-exempt employees. Newly non-exempt employees will earn 6 hours of personal leave each pay period and will also be eligible for a Personal Day and Bereavement Leave. Moving forward, non-exempt USPS new hires will accrue leave at the rate established rate based on years of service. A&P new hires under the threshold will accrue 6 hours per pay period.
Many employees are accustomed to checking their s and replying to calls and texts after hours. Supervisors are encouraged to review and adjust the work area practices and expectations of after-hour electronic use.
I would suggest supervisors include in their after-hour s a response is not needed until normal business hours. Because…. Once an employee responds, this is documented time worked.

40. Work Distribution Travel Policy On-Call Policy Dual Comp 4/23/2018
1. It is very likely you could have two employees working side by side performing the same duties, one being exempt and the other non-exempt.
2. Managers need to be cognizant of situations where the exempt employee may be working
many extra hours to get the work done, while the non-exempt employee as a rule leaves on time.
3. On the other hand, if the non-exempt employee works longer hours, they could possibly earn more than the exempt employee due to overtime.
4. The travel policy has not changed, but should be reviewed with the former exempt employee if their position requires travel.
Like the travel policy, the on call policy has not changed, but should also be reviewed with the employee if they are required to be on call.
With dual comp. employees moving from exempt to non-exempt must be paid for any hours worked over 40 hours. This includes dual comp. All hours are must be traced on the timesheet and could result in overtime pay.