Fair Labor Standards Act (FLSA) Foreign Exemption Provision

• Define FLSA

• Define FLSA Foreign Exemption Provision

• Impact of Incorrect FLSA Coding

• Personnel/Payroll Workaround 09-0006

• Actions for TDY Deployment• Temporary Reassignment (NOAC 921/922)

• Change in Data Element (NOAC 800)

OBJECTIVES

• Effective Date and Remarks for Change in Data Element action

• Off-line Actions

• Intervening Actions

• Payroll Review

• Common Problems

OBJECTIVES

• Positions must be identified as Exempt or Nonexempt. The FLSA provides for minimum standards for both wages and overtime entitlements and specifies administrative procedures by which covered work-time must be compensated.

• NONEXEMPT – Covered by the minimum wage and overtime provisions of the Act. Entitled to overtime pay at 1.5 times their regular pay for all hours of work over 8 hours in a day or 40 hours in a workweek.

• EXEMPT – Not covered by the minimum wage and overtime provisions of the Act. Overtime pay is capped at 1.5 times the GS-10 step 1 pay rate of the geographical location or regular hourly rate if it is higher than the GS10 step 1.

FLSA DEFINITIONS

• The foreign exemption applies to employees who spend all hours of work in a week in one or more exempt areas whether permanently stationed in the foreign area or not.

• Some employees permanently assigned to foreign area positions will still be exempt from the FLSA even if temporarily in the US (5 CFR 551 lists exemption).

• The foreign exemption applies to all employees including FWS.

FLSA FOREIGN EXEMPTION PROVISION

Debt Repercussions of Incorrect FLSA Coding

-15000

-10000

-5000

0

5000

10000

Dollar Value

Pay Period

Exempt Vs. Non Exempt FLSA

Hours of OT Worked 80 90 25 110 50 112

FLSA Exempt Wages 3268.80 3677.40 1021.50 4494.60 2043.00 4576.32

FLSA Non Exempt Wages 5082.55 5618.43 1582.87 6850.20 3143.47 6973.62

Compounding Debt Value -1813.75 -3754.78 -4316.15 -6671.75 -7772.22 -10169.52

PP 1 PP 2 PP 3 PP 4 PP 5 PP 6

Example is based on a GS 12 step 5 employee in the Washington DC area. Overtime for exempt employees is capped at the GS10 step1 rate of the geographical location or regular hourly rate

if it is higher than the GS10 step 1. Overtime for non-exempt employees, hours worked on holiday, Sunday, and night will be used to calculate the

overtime rate.

• The procedure developed to ensure correct overtime payments for employees in positions which are nonexempt but become temporarily subject to the FLSA foreign exemption, or vice versa.

• The Foreign exemption limits overtime payments when “the employee is not permanently stationed in an exempt area, but spends all hours of work in a given workweek in one or more exempt areas.”

• This could be for nonexempt “N” employees going from the United States to the foreign area “E”, or some exempt “E” employees going from the foreign area to the United States “N”.

Personnel/Payroll Workaround 09-0006

Personnel/Payroll Workaround 09-0006

• This workaround also applies to Deployed Civilians.

• For these employees, ensure you process the NOAC 921 (or NOAC 922) action first followed by the NOAC 800 using the rules in the workaround.

• The two NOACs may have different effective dates (since the NOAC 800 coincides with the start of a workweek).

NOAC 921/922 (TDY) Action

• Effective date for the NOAC 921 Action should be the date the employee enters the foreign area.

• Effective date for the NOAC 922 Action should be the date the employee leaves the foreign area.

• For TDY employees, NOAC 921/922 Action is not always flowed to DCPS.

NOAC 800 Action

• The effective date for the NOAC 800 action should be:

• CONUS to OCONUS TDY – For employees moving between non-exempt and exempt areas, the effective date would be the beginning of the week (Sunday) FOLLOWING the date the employee actually traveled to or from the location.

Example: NOAC 921 effective 17 Dec 10 when employee entered foreign area. NOAC 800 effective 19 Dec 10.

• OCONUS to CONUS TDY – For employees moving between exempt and non-exempt areas, the effective date would be the beginning of the week (Sunday) that the employee actually traveled to or from the location.

Example: NOAC 922 effective 17 Dec 10 when employee leaves foreign area. NOAC 800 effective 12 Dec 10.

NOAC 800 Action

• The remarks for the NOAC 800 action should be:

• M74 – “Changes data element(s) in block(s) 35.” and

• CONUS to OCONUS TDY – ZZZ “This action documents a temporary FLSA status change for employees in FLSA nonexempt positions who are subject to the FLSA Foreign Exemption in 5 CFR 551.212 while performing temporary duty in a foreign area.”

• OCONUS to CONUS TDY – ZZZ “This action documents a temporary FLSA status change for employees in FLSA exempt positions who are subject to the FLSA Foreign Exemption in 5 CFR 551.212 while performing temporary duty in a non-foreign area.”

NOAC 800 Action

• Additional manually entered information:

• CCPO Suspense Code 5 – “FE”

• CCPO Suspense Date 5 enter the “TDY end date”

• This information is used for tracking and reporting purposes.

• If the Temp Reassignment is extended with NOAC 923, the TDY end date will need to be updated to reflect the new date.

NOAC 800 Action

Go into the Person record. Click on Extra Information

NOAC 800 Action

Go to Personnel Contingency Area DDF.

NOAC 800 Action

Under CCPO Suspense Code 5 enter “FE”Under CCPO Suspense Date 5 enter the “TDY end date”

Offline Actions

• If actions are processed retroactively, and they are “off-line” in payroll, a remedy ticket must be submitted so the overtime pay can be manually calculated for the “off-line” timeframe.

Off-line is defined as actions effective beyond 26 pay periods.

Example:

- NOAC 800 effective 03/10/2010 processed on 02/27/11. Action is still “on-line”—no remedy ticket required. DCPS will automatically re-calculate the overtime pay based on the FLSA change.

- NOAC 800 effective 02/10/2010 processed on 02/27/11. Action is “off-line”—remedy ticket must be submitted for the off-line portion of the FLSA change.

Intervening Actions

• If these actions are processed retroactively, and there are intervening actions, they must be corrected to reflect the correct FLSA code.

Example:

- 921 (TDY) action and 800 action effective 12/26/10 processed 01/10/11

- 893 action effective 01/02/11 already in the system becomes an intervening action and needs to be

corrected.

• If the intervening action is not corrected and flowed to DCPS, the FLSA code will be incorrect and employee will not be paid correctly.

Payroll Review

• Actions MUST be checked in DCPS to ensure they flowed correctly and updated the FLSA.

• There may be actions in DCPS that are not flowed from Personnel and the FLSA is incorrect. A Payroll Regeneration can be processed as NOAC 800 effective the date of the action in DCPS changing the FLSA to the correct code.

Example:

– NOAC 800 processed by DFAS to update the bi-weekly waiver code. (This is an action that is not flowed from Personnel.)

Common Problems

• If FLSA is changed on the NOAC 921/922 (TDY) action that is not flowed to DCPS, it will not update the FLSA in DCPS.

• If the NOAC 921/922 (TDY) action that is not flowed to DCPS is corrected to change the FLSA, it will not flow to DCPS nor update the FLSA in DCPS.

• Payroll will be incorrect and the overtime pay will not be calculated correctly.

• These will cause a valid mismatch on the Payroll Recon.

• The FLSA code must be updated by NOAC 800 action for the NOAC 921/922 (TDY) actions in order to flow and update in DCPS.

QC Ticket (Pay) FLSA Invalid

• QC ticket (Pay) FLSA Invalid will generate when the employee record is coded with the danger pay entitlement in DCPDS, and the FLSA code is “N” non-exempt.

• These tickets should be closely monitored to ensure the FLSA is coded correctly since it has direct impact on the calculation of the overtime pay.

• Record should be reviewed to determine which is incorrect – the danger pay entitlement or the FLSA code.

• If employee is no longer deployed, contact management/ employee to submit documents to terminate foreign entitlements.

• If employee is currently deployed, verify NOAC 921 and NOAC 800 actions are processed with the correct FLSA code.

Questions