Managing the Changes in the Fair Labor Standards Act

Transcription

Managing the Changes in the Fair
Labor Standards Act
2016 Summer Conference
June 29, 2016
Linda Bond Edwards
Linda Bond Edwards © 2016 Rumberger, Kirk & Caldwell, P.A.
Overview of Changes
• Become effective December 1, 2016;
• Increases minimum salaries for exempt employees;
the amount has not been changed since 2004;
• Sets a rule that updates the threshold every 3 years;
• Increases the highly compensated employee from
$100,000 to $134,000 annually and allows bonuses
to comprise 10% of the threshold.
© 2016 Rumberger, Kirk & Caldwell, P.A.
Public Employees:
What We Know
– Compensatory time – No Changes
• Must be established with employees through notice or
other means (e.g. collective bargaining agreements)
before the performance of work;
• Compensatory time must be accrued at time and one
half. When used, comp time is paid at the regular rate
of pay;
• Can accrue up to 240 hours of compensatory time;
• Use as requested unless “unduly disruptive”;
• Special rules apply to public safety employees.
What we know
• Hourly workers: no change
• Exempt salaried workers who work no more than 40
hours per week– no change
• Salaried workers who are not exempt and already
receiving overtime– no change
• Elected officials, their policy making appointees and
their personal staff and legal advisors not subject to
career or civil service are exempt --- no change
Primary Duty
• Means the principal, main, major
or most important duty that the
employee performs.
• Determination of an employee’s
primary duty must be based on
all the facts in a particular case,
with the major emphasis on the
character of the employee’s job
as a whole.
• Job titles do not matter!
Definition of Executive
•Primary duty must be
managing the enterprise, or
managing a customarily
recognized department or
subdivision of the enterprise.
Definition of Executive
• Must customarily and regularly direct
the work of at least two or more other
full-time employees or their
equivalent;
• Must have the authority to hire or fire
other employees, or the employee’s
suggestions and recommendations as
to the hiring, firing, advancement,
promotion or any other change of
status of other employees must be
given particular weight.
Managing the Enterprise
• Interviewing, selecting and training
employees;
• Setting employee pay and hours of
work;
• Handling employee complaints and
grievances;
• Imposing employee discipline;
• Providing for workplace safety and
security;
• Budget planning and control;
• Ensuring legal compliance.
Management of Enterprise or
Subdivision
• Must have a permanent status
and a continuing function;
• Includes person in charge of
each establishment if
enterprise has more than one
establishment;
• Employees may be located at
multiple locations
Two or More Other Employees
• Must be full time or full time
equivalent
• Supervision may be shared;
however each supervisor
must direct the work or two
or more employees
Particular Weight of Suggestions
and Recommendations
• Requirement to make suggestions
and recommendations;
• Frequency of suggestions;
• Frequency of reliance upon
suggestions;
• Must pertain to subordinate’s
work;
• Employee not required to have
ultimate decision making ability
Concurrent Duties
Exempt and Non Exempt
• Allowed to perform non- • Generally must perform
exempt work at the
exempt work more than 50%
exempt executive’s
of the time to meet primary
discretion;
duty test, however time is
• Executive retains the
not the sole factor
responsibility for business • Customarily and primarily
success and failure even
– Greater than occasional,
while performing nonless than constant
exempt work;
– Occurs every workweek
Example of Concurrent Duties
– An assistant manager may
operate the cash register
without losing the exemption.
– However, if assistant manager
is closely supervised and earns
little more than non-exempt
employees, may lose
exemption.
Directly and Closely
Related to Exempt Work
• Physical and menial tasks that arise out of exempt
duties;
• Recordkeeping, distribution of materials;
• Using the computer to create documents or
presentations;
• Opening mail for the purpose of reading and making
decisions;
• Examining work to ensure performance standards
are met; does not include “go/no go” inspection
work;
Directly and Closely
Related to Exempt Work
• Examples include:
– Observing and taking notes
necessary for analysis and
making recommendations;
– Teacher who drives the van
to take students on a field
trip
Use of Manuals
• Use of highly technical, scientific,
legal or financial or other highly
complex manuals, guidelines or
other established procedures
understood or interpreted by
those with advanced or specialized
knowledge does not destroy an
exemption.
• This does not include “How To”
manuals.
Administrative
• The primary duty must be the
performance of office or nonmanual work directly related to the
management or general business
operations of the employer or the
employer’s customers; and
• The employee’s primary duty
includes the exercise of discretion
and independent judgment with
respect to matters of significance.
Administrative, continued
•“Directly related to the business” includes functional
areas such as:
• Tax, finance, accounting, budgeting, auditing;
• Insurance;
• Quality control;
• Marketing, advertising;
• Human Resources, employee benefits, labor
relations;
• Legal and regulatory compliance;
• Advisers or consultants to clients and customers
Discretion and Independent Judgment
Includes:
– Comparison and evaluation
of possible courses of
conduct
– Acting or making a decision
after various possibilities
have been considered
Does the employee have the authority to:
– substantially and significantly commit the
employer?
– waive or deviate from established policies and
procedures?
– negotiate and bind the company on significant
matters?
– engage in long or short term planning?
– investigate and resolve matters of significance?
Does the employee have the authority to:
– formulate, affect, interpret, or implement
management policies and practices?
– carry out major assignments in conducting the
operations of the business?
– perform work that affects business operations to a
substantial degree?
– represent the company in handling disputes,
arbitrating disputes and resolving grievances?
Who Exercises Discretion
and Independent Judgment?
Examples:
– Insurance claims adjusters;
– Employees in financial services;
– Team leaders of major projects such
as purchasing or selling business;
– Executive or Administrative Assistant
to business owner or senior
executive;
– HR managers;
– Purchasing agents
The FLSA Regulations:
Professional
The primary duty must be the
performance of 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;
The FLSA Regulations:
Professional
• The advanced knowledge must
be in a field of science or
learning; and
• The advanced knowledge must
be customarily acquired by a
prolonged course of
specialized intellectual
instruction.
The FLSA Regulations
• What degree or
knowledge is required?
– Knowledge may be attained
by a specialized degree or
advanced knowledge and
intellectual instruction;
• Academic degree in any
field generally will not
qualify for the professional
exemption
Examples of Professional
• Lawyers, doctors,
engineers, actuaries,
theologians, accountants,
architects, teachers,
chemists, biologists,
pharmacists
• Athletic trainers
• Licensed funeral directors
• Registered nurses
• Registered or certified
medical technologists
• Four-year degreed dental
hygienists
• Four-year degreed
physician assistants
• Four-year degreed
executive and sous chefs
Salary Basis
– A predetermined amount received
each pay period that includes all or
part of an employee’s compensation
which is not subject to reduction
because of the quality or quantity of
work
– Must receive (with specified
exceptions) the full salary for any
week in which the employee performs
any work without regard to the
number of days or hours worked
Exceptions to Salary Basis
– Deductions may be made when an exempt employee is
absent for one or more full days for personal reasons other
than sickness or disability;
– Deductions may be made for absences for one or more full
days due to sickness or disability if the deduction is made in
accordance with a bona fide plan, policy or practice of
providing compensation for loss of salary for absences due to
sickness or disability.
Deductions May Be Made for
• Penalties imposed in good faith
for safety infractions of major
significance;
• Unpaid disciplinary suspensions
for one or more full days
imposed for violations of
workplace conduct rules.
• Disciplinary deductions must be
made pursuant to a written
policy applicable to all employees
Employer Does Not Pay If:
• Sick or disability benefits are
exhausted or not yet accrued;
• Employee does not perform any
work during the work week,
including the initial week of
employment; partial week payment
is permissible in the initial or
terminal week of employment;
• On unpaid leave pursuant to the
Family Medical Leave Act.
Penalties for Improper Deductions
– Lost exemption for time period of improper
deductions for all employees in the
classification working for the same manager
responsible for the improper deductions.
– The exemption will not be lost if the improper
deduction is isolated and inadvertent if the
employer reimburses the employees for the
improper deduction.
Special Provisions for Public Employers
May make deductions for partial day
absences for personal reasons or illness if
the employee accrues personal or sick
leave pursuant to a policy that requires a
reduced salary or no salary at all if:
 Employee failed to obtain proper
authorization for the leave;
 Leave has been exhausted;
 Employee requests leave without pay.
Good News for the Employer!!




A clearly communicated policy that:
prohibits improper pay deductions;
includes a complaint mechanism,
reimburses for improper
deductions; and
 states that the employer makes a
good faith commitment to comply
in the future protects the employer
from losing the exemption unless
the violation is willful.
Sample Policy Language
“Best Employer” is committed to paying employees
minimum wage and overtime consistent with the
provisions of the Fair Labor Standards Act (FLSA).
Employees who believe that their pay is not in
compliance with the Act should contact _________ or
submit a complaint in accordance with _________.
Self Auditing
• Allows employers the
opportunity to determine
when to review positions and
when to make policy changes;
• Reduces possibility of willful
violations penalties
Caution!
–Damages in FLSA cases
are wages owed, not
compensatory damages
and always includes
attorney fees.
Steps to Ensure Compliance
•
•
•
•
•
Review all existing positions to ensure that the
exemption has been properly applied.
Raise the salary of any exempt employee who
meets the duties test and is below the minimum.
Closely monitor employee time and attendance
records.
Implement and strictly enforce policies regarding
use of overtime.
Do not allow “incidental overtime” (e.g. working
lunches, working a few minutes extra)
Steps to Compliance
• Continue to pay exempt employee a salary and pay
overtime or compensatory time for hours worked over 40
in a work week, no need to convert employee to hourly.
– Employees who work a fix schedule and rarely work
overtime can be paid a salary.
– When extra time is required, plan and budget extra pay.
– Keep a record of the schedule and keep a record of the
hours actually worked only when the actual hours vary
from the schedule.
Steps to Compliance
– Use comp time for the period
when the hours increase.
– Consult an employment
lawyer if you have any
questions.
Disclaimer
The information provided during this presentation is not
intended for legal advice. The presentation, and any
handouts which may accompany it, provide general
information on this topic and answers to common
questions about this issue. Please consult an attorney to
assure that this information, and your interpretation of it,
is appropriate to your particular situation.
Thank you!
•
•
•
•
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•
Linda Bond Edwards, Esquire
Rumberger, Kirk & Caldwell, P.A.
P.O. Box 10507
Tallahassee, FL 32302-2507
(850) 222-6550
[email protected]

Managing the Changes in the Fair Labor Standards Act

Transcription

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