1. Exempt Employees FLSA – Fair Labor Standards Act— basis for determining exempt status Some states have laws that further limit who can be an exempt employee State or federal?—whichever is best for the employee

2. Who Is Exempt? Exempt employees – paid to do a job, regardless of time, effort, quality or quantity of work Exemption does not depend on job title, rather on job duties and compensation Risk class action lawsuits and audit of all employees if misclassify as exempt

3. Non-Exempt Employees Must be paid for all hours worked Must be paid overtime if applicable THERE IS NO SUCH THING AS COMPENSATORY TIME OFF (CTO) Must take meal and rest breaks if required by law

4. California Employers Must track hours worked by non-exempt employee, including meal periods “Premium Wage” (penalty) if California employees do not receive required rest breaks and/or meal breaks

5. Non-Exempt Employees, continued OVERTIME AZ – over 40/week CA – State law – over 8/day, 40/week CO – State law—over 12/day, 40/week NV – State law – over 8/day, 40/week

6. Non-Exempt Employees, continued OVERTIME NM—over 40/week OR—over 40/week TX—over 40/week

7. Non-Exempts and Overtime Regardless of overtime law, may need a non-exempt employee to come in early, stay late, work on a weekend Either pay the overtime as required in your state, or Flex the workday/workweek

8. Non-Exempts and Travel Time Requirements vary by state Be sure to review your state law as well as your policy before you have a non- exempt employee travel on business

9. Independent Contractors It’s a great idea ………………….. But, don’t do it, unless YOU ARE POSITIVE the person is truly an independent contractor

10. Independent Contractors, continued Use independent contractor agreement Avoid control Independent contractor should use own tools Independent contractor is NOT an employee—don’t treat as one No reimbursement of expenses

11. Independent Contractors, continued Independent contractor should have other clients Ask for proof of independent contractor status Document insurance coverage Document payment for services When in doubt, call legal counsel

12. Independent Contractors, continued Independent contractors should not be performing job that is critical to the organization’s business or purpose for existence Be sure to check state rules – some states do have strict requirements IRS and other taxing agencies use different rules

13. Resources Exempt Employees U.S. Department of Labor’s website – information on the FLSA exemptions: http://www.dol.gov/index.htm California http://www.dir.ca.gov/dlse/dlse.html

14. IRS Independent Contractors IRS Independent Contractor info: http://www.tax.ca.gov/icore.bus.html#Fed eral www.irs.gov/pub/irs-pdf/p1779.pdf www.irs.gov/businesses/small/article/0,,id =99921,00.html www.irs.gov/taxtopics/tc762.html