Upcoming FLSA Changes EXEMPT AND NONEXEMPT EMPLOYEE TIME

Upcoming FLSA Changes EXEMPT AND NON-EXEMPT EMPLOYEE TIME MANAGEMENT

Objectives • Overview of the new FLSA regulations coming into effect December 1, 2016. • How the changes may impact you. • The differences between non-exempt and exempt employees. • Helpful tips regarding hot topics: ◦ Travel time ◦ Telecommuting ◦ On-call practices ◦ Return to work ◦ Breaks

What is FLSA? • FLSA stands for Fair Labor Standards Act of 1938. • Federal law addressing employment topics, such as minimum wage and overtime eligibility. • FLSA establishes standards for full-time and part-time workers in the private sector and with federal, state and local governments.

What is a Non-Exempt Employee? • Non-exempt employees are hourly employees who are entitled to overtime, if they work over 40 hours in a week. Overtime is accrued at 1. 5 times of the employee’s regular hourly pay rate. UTRGV application: ◦ Non-exempt employees must receive overtime pay or time off at the overtime rate, if they work more than 40 hours per week, calculated in accordance with the UTRGV work week, Monday through Sunday. ◦ Supervisors must pre-approve all overtime requests in advance of accrual. ◦ Employees are expected to exhaust overtime hours earned as compensatory time (accrued at the overtime rate).

Non-Exempt Employees • When overtime is paid out rather then exhausted as compensatory time off, approval of the VP, or his/her designee, is required. • All overtime should be exhausted within a 12 month period from the date of accrual. Please remember that employees should take overtime hours earned as compensatory time off. After 12 months, accrued overtime will be paid out automatically. ◦ For example, if an employee earns $10/hr and works 41 hours one week, the employee is entitled to 1 hour and 30 minutes of time off or $15 in pay. *Please note: All overtime worked will be banked at a rate of 1. 5 the regular pay rate when employees work over 40 hours any given week.

What is an Exempt Employee? • Exempt employees are salaried employees who are not entitled to overtime pay, nor time off, when they work over 40 hours per week. • Supervisors may require an exempt employee to work over 40 hours any given week when business needs necessitate additional time to complete a project. • Exempt employees generally have more schedule flexibility to accomplish work goals and projects.

FLSA – December 1, 2016 • On May 17, 2016 the Department of Labor (DOL) issued its final regulations, which is expected to go into effect on December 1, 2016. • On December 1, 2016 many positions with a salary set below $47, 476 per year will be entitled to overtime pay. ◦ Exception: Certain job titles qualify for specialized occupational exemptions, such as, teachers and academic administrative personnel. Positions falling within the exception will remain exempt and paid at least as much as the entrance salary for teachers at UTRGV.

FLSA – December 1, 2016 – Cont’d • What are Academic Administrative Personnel? ◦ They are “administrative personnel that help run higher education institutions and interact with students outside the classroom, such as department heads, academic counselors and advisors, intervention specialists and others with similar responsibilities. . . subject to a special salary threshold that does not apply to white-collar employees outside of higher education. These employees are not entitled to overtime compensation if they are paid at least as much as the entrance salary for teachers at their institution. ” -Department of Labor

FLSA Changes Further Explained… • The minimum salary for exempt employees was calculated based on the standard salary level at the 40 th percentile of full-time employee earnings, in the current lowest wage region (the South). • Effective December 1, 2016: Most exempt employees must earn a salary of $913 per week or $47, 476 annually, if a full-time employee. • Under the new FLSA regulations, automatic updates of most exempt employee salaries and compensation levels will occur every 3 years.

What Happens On December 1, 2016? • If a position changes from exempt to non-exempt, the title will stay the same and the salary, in most cases, will stay the same. Salaries will not be reduced. • Newly non-exempt employees will be entitled to overtime pay or compensatory time for all time worked over 40 hours per week. • If it’s necessary for non-exempt employees to work over 40 hours during any week, the employee must first seek prior approval from his/her supervisor. Neglecting to seek permission prior to working overtime could result in disciplinary action or additional coaching.

Can Employees Donate Work Time? • Non-exempt employees cannot donate or volunteer time. The UTRGV volunteer process is formal and does not apply in these situations. • Non-exempt employees must be paid or provided compensatory time for all time worked. • All non-exempt employees must report actual time worked each day on their timecards. ◦ For example: Employees must not report working 8 hours consecutively if the employee worked 6 hours one day and 10 hours the next day, the employee must report “ 6” and “ 10” on the timecard.

Travel- Non-Exempt Employees Video

Video Summary • A non-exempt employee will be compensated for travel if it occurs during normal working hours (8 am to 5 pm or the assigned commonly worked schedule). • An employee who travels outside normal working hours will be compensated for travel, if the employee is engaged in work activities while traveling (i. e. review of notes, emails, reports, etc. ). ◦ Drivers are also compensated for driving independent if they are driving during normal working hours. • When is travel time not compensable? ◦ When an employee is not performing work related activities such as when sleeping, eating or reading a leisure book outside normal working hours. ◦ Passengers are not compensated for time spent traveling when it occurs outside normal working hours.

Non-Exempt Employees Overseeing Students During Travel Periods • If someone has an oversight role over others, such as students, (outside normal working hours), here a few recommendations: ◦ Assign an exempt employee, rather than a non-exempt employee, to perform this function. ◦ If an exempt employee is not available, after a certain amount of time switch the responsibility to another non-exempt employee so that each employee works as close to a 40 hour week as possible. *Please Note: Non-exempt employees are entitled to compensation when viewing, considering, and responding to work related texts or calls during non-normal work hours (before 8 am, after 5 pm and on the weekends). They will also be compensated for the time spent waiting for a return call or text. It is important for supervisor to be clear when a response is needed and when a conversation is over.

Training Outside Work Hours • Employees attending most meetings & trainings are entitled to compensation, unless all of the following are true: ◦ ◦ The training or meeting is outside normal working hours, Attendance is voluntary and not required for the job, The meeting or training is not work related, and No work is performed during the training or meeting.

General Overtime Rules • Any overtime anticipated or required must be pre-approved by the supervisor. • An official UTRGV overtime request form is available on our website at: http: //www. utrgv. edu/hr/_files/images/features/non-exempt-form. pdf. Departments may use another method to approve and track non-exempt employee overtime requests, when alternative methods are approved by departmental management. • Unauthorized accrual of overtime is a violation of UTRGV HOP Section: ADM 04 -406, Overtime for Non-Exempt Staff Employees, and may subject an employee to discipline or coaching. Please remember that even unauthorized accrual of overtime must be compensated. • Overtime is expected to be accrued at the assigned employee’s place of employment. Working from a personal residence, or telecommuting from another non-work site, is unauthorized. Written authorization by the UTRGV President, or his designee, to telecommute is required if this need arises.

Non-Exempt Employees On-Call • These are non-exempt employees who are required to visit a campus location, or work-site, to address an urgent business-related need. • Supervisors make these requests for non-exempt employees to return to work outside the employee’s typical working hours only when a matter cannot be resolved during the employee’s typical work schedule (i. e. , urgent need). • The supervisor must establish that calling the employee was necessary to further University business needs.

Calling Employees To Return To Work • If a supervisor requires a non-exempt employee to return to work outside normal working hours, UTRGV will compensate the employee for a minimum of 2 hours or the actual time worked, that is in excess of 2 hours. • The employee is compensated for two (2) hours regardless if the work assignment is completed in less time. ◦ For example, if an employee is required to be onsite to address a matter that takes 10 minutes of travel and 10 minutes to complete, the employee is still compensated for 2 hours. • Please see UTRGV HOP Section: ADM 04 -406, Overtime for Non-Exempt Staff Employees. http: //www. utrgv. edu/hop/policies/adm-04 -406. pdf

Lunch Breaks • The typical UTRGV work schedule is 8 am to 5 pm, Monday through Friday, with a one (1) hour lunch break. Supervisors may require non-exempt employees to take shorter lunch breaks for operational needs. Employees working eight hours must take a minimum of a 30 minute lunch. ◦ Keep in mind employees will need to be compensated for the time they work. ◦ For example: If Hector works 8 am to 5 pm and takes a 30 minute lunch break, he may take off the additional 30 minutes that he worked that same week. If he does not take the 30 minutes off that week, he would accrue an overtime balance. The 30 minutes converts to 45 minutes worth of overtime pay or equivalent time off. • Lunch breaks cannot be used to reduce the daily work schedule. ◦ For example, an employee taking a 30 minute lunch break regularly to arrive at work at 8: 30 am or leave at 4: 30 pm is not permissible.

Rest Breaks • Full-time employees are permitted two paid 15 minute breaks. ◦ These two breaks cannot be combined. ◦ Supervisors can set when these breaks are taken so long as one is in the morning and the other in the afternoon. ◦ Supervisors may allow part-time employees, who work a minimum of 3 hours, one paid 15 minute break. • Rest breaks cannot be combined to extend lunch breaks or be used to start the day late or end the day early. • If a break is not taken, employees are not entitled to additional compensation.

Resources • FLSA Questions ◦ Contact HR Compensation at (956) 665 -2451 • Time Tracking & Reporting Questions ◦ Contact HR Business Partners at (956) 665 -2451 or email hrpartners@utrgv. edu • Applicable Policies ◦ ◦ ADM 04 -105 Staff Work Hours and Rest Periods ADM 04 -406 Overtime for Non-Exempt Staff Employees ADM 04 -408 Time Records, Paycheck, Payday ADM 10 -602 Travel Policy • Online Resources ◦ Department of Labor website www. dol. gov ◦ UTRGV Human Resources website http: //www. utrgv. edu/hr/index. htm

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