nonprofithr.com | [email protected] | (202) 785-2060 Q If all of my exempt staff earn more than $47,476, do I need to do anything differently? A You are in luck in this situation, as you don’t have any immediate action steps for this cohort. However, as you hire staff around this threshold in the future, be sure to keep in mind that the salary level minimum will change every three years beginning January 1, 2020. Q Is there any accommodation in the law that would allow employees working 30 hours a week to be exempt if their pay is proportionate to the $47,476? A There is no accommodation in the FLSA for part-time employees. An employee is either exempt or non-exempt by virtue of the three tests (salary basis, salary level and duties) without respect to number of scheduled hours per workweek. The FLSA looks at actual salary for all employees so if your part-time employee working 30 hours earns less than $47,476 (on an actual versus annualized salary basis), he/she would be considered non-exempt. NONPROFIT OVERTIME QUESTION AND ANSWER SHEET: WHAT YOUR ORGANIZATION NEEDS TO KNOW ABOUT THE NEW FLSA CHANGES
A Youareinluckinthissituation,asyoudon’thaveanyimmediateactionstepsforthiscohort.However,asyouhirestaffaroundthisthresholdinthefuture,besuretokeepinmindthatthesalarylevelminimumwillchangeeverythreeyearsbeginningJanuary1,2020.
A ThereisnoaccommodationintheFLSAforpart-timeemployees.Anemployeeiseitherexemptornon-exemptbyvirtueofthethreetests(salarybasis,salarylevelandduties)withoutrespecttonumberofscheduledhoursperworkweek.TheFLSAlooksatactualsalaryforallemployeessoifyourpart-timeemployeeworking30hoursearnslessthan$47,476(onanactualversusannualizedsalarybasis),he/shewouldbeconsiderednon-exempt.
NONPROFIT OVERTIME QUESTION AND ANSWER SHEET: WHAT YOUR ORGANIZATION NEEDS TO KNOW ABOUT THE NEW FLSA CHANGES
A TheFLSArequiresovertimetobepaidtonon-exemptemployeeswhoworkmorethan40hoursinaworkweek.Iftheywork22hourstheyarepaidtheirregularrateforthose22hours(multiply22hoursbytheirregularrateofpay).
A Itislikelybesttopaythoseemployeesonanhourlybasis.Iftheypasstheteststobeclassifiedasexemptemployees,youcanpaythemonasalariedbasis.Iftheirworkloadvariesthroughouttheyear,theywouldbepaidthesameregardlessofthenumberofhoursworked,whichiswhypayingthemonanhourlybasisisprobablymoreappropriateiftheirpositionsdemandanon-exemptclassification.
Q Pleasespeakinmoredepthaboutthedutiestest.
A TheFLSAprovidesanexemptionfrombothminimumwageandovertimepayforemployeesemployedasbonafideexecutive,administrative,professionalandoutsidesalesemployees.Italsoexemptscertaincomputeremployees.Toqualifyforexemption,employeesgenerallymustmeetcertaintestsregardingtheirjobdutiesandbepaidonasalarybasisatnotlessthan$455perweek(thisincreasesto$913onDecember1,2016).Jobtitlesdonotdetermineexemptstatus.Inorderforanexemptiontoapply,anemployee’sspecificjobdutiesandsalarymust
A ThenewregulationsgointoeffectDecember1,2016.NothingistobesubmittedtotheDOLorothergovernmentagencies,however,youmustbeincompliancewiththenewrulesbythatdateoryouriskbeingauditedandfoundinviolation.ByDecember1,2016youshouldplantohaveproperclassificationsforyouremployeesbasedonthenewrules.
A Youcancertainlydecidetoincreasesalariesandrequirecontributionstowardhealthinsurance,butdoingsotocomplywiththeregulationscouldhaveunintendedconsequences.Considerwhetherraisingsalariesalignswithyourcompensationphilosophyandhowitimpactsinternalandmarketequity.
A Make-uptimeallowsnon-exemptemployeestotaketimeoffandworkthattimeearlierorlaterinthesameworkweekinordertoavoidbeingshort-paidoraccruingovertime.Thekeytomake-uptimeistoensurethatitisworkedinthesameworkweekthatthetimeoffistaken.Forexample,assumeanemployeeworksaregularMondaythroughFridayscheduleofeighthoursperday.TheemployeecantakeoffthreehoursonTuesday,andthenwork3extrahoursonWednesdayandThursdaytomakeupthetime.Likewise,anemployeewhoknowsaheadoftimethatheorshewillneedtotakeofffourhourson,say,aFriday,canscheduleinadvancetoworklongerdaysearlierintheweeksothatthere’snolossofpayforthetimetakenonFriday.Thesimilarworksinreverse.Anemployeewhoworks9hoursonaMondaycanbescheduledfor7hoursonadayduringthesameworkweektoavoidaccruingovertime.Somestates,mostnotablyCalifornia,havespecialprovisionsaroundmake-uptime,socheckyourstateguidelinesbeforeimplementingsuchapolicyatyournonprofit.
A Therearenolegalrequirementsregardingthesigningofjobdescriptions,however,itisbestpracticethattheemployeeandsupervisorsignthepositiondescription.Thisindicatesthateachareawareoftheexpectationsandarealignedintermsofthedutiesandqualificationsforthejob,aswellastheFLSAclassification.HumanResourcesshouldbeinvolvedindevelopingorreviewingpositiondescriptionstoensureorganizationalconsistencyandcompliance.
A SupervisionoftwoormorestaffisonlypartofthedutiestestfortheExecutiveexemption.TheseindividualsmaymoreappropriatelybeclassifiedasexemptundertheProfessionalorAdministrativeexemptiontests,whichfocusonotherareasofresponsibility.DOLFactSheetsA-E(startwithFactSheetAthenlinktotheothers)detaileachofexemptions–Executive,Administrative,ProfessionalandComputer.
A IftheExecutiveDirectordoesnotmeetthesalaryleveltest,meaninghe/shedoesnotearn$47,476onanannualbasis(actualsalary),thenhe/shewillnotbeconsideredexemptevenifhe/shemeetsthedutiestestsforexemption.
A Non-exemptemployeesmustbepaidovertimenolaterthanonepayperiodinarrears.Employerswhopaysemi-monthlyarecautionedtopayattentiontohowworkweeksintersectwithpayperiods.Youmaybebetteroffhavingmultipletimekeepingperiods–oneforexemptemployeesandonefornon-exempt–inordertoavoidmiscalculatinghours.Also,checkstatewagepaymentlaws;somestatesmayrequirenon-exemptemployeestobepaidmorefrequentlythansemi-monthly.
A TeachersarenotrequiredtomeetthesalarybasisorsalaryleveltestundertheFLSA.Mostteacherpositionsareconsideredexemptbasedontheirdutiesalone.Theyareexemptiftheirprimarydutyisteaching,tutoring,instructingorlecturingintheactivityofimpartingknowledge,andiftheyareemployedandengagedinthisactivityasateacherinaneducationalestablishment.
A Section13(a)(3)oftheFLSAaddressestheexemptionforseasonalamusementsorrecreationalestablishmentsundertheFLSA;manycampsfallunderthisexemption.Organizationsareexemptiftheydonotoperateformorethansevenmonthsinacalendaryearorduringtheprecedingcalendaryear,theiraveragereceiptsforanysixmonthsofthatyearwerenotmorethanone-thirdoftheiraveragereceiptsfortheothersixmonthsofthatyear.SeeDOLFactSheet18formorespecifics.Ifyourcampfallsunderthisexemption,thenyouarenotsubjecttotheminimumwageorovertimeprovisionsoftheFLSA,includingtheforthcomingrevisions.Youmaypayyourcounselorsaweeklysalarytocovertheirtimeworkedthatweek.IfyourcampisnotexemptfromtheFLSAunderthissection,thenyourpositionswillneedtobeclassifiedasexemptornon-exempt.Mostmanagementoroperationspositionsmayfallunderthe“whitecollar”exemptiontestswhichwasdiscussedonthewebinar,andtheemployeesofthecampmustmeetthesalarybasis,salarylevel,anddutiesteststobeexempt.Also,somestatewagelawsmaynotrecognizeorpermittheapplicationofthisexemption,andsinceanemployermustcomplywiththemoststringentoftheStateorFederalprovisions,itisstronglyrecommendedthatstatelawsbereviewedpriortoapplyingthisexemption.Finally,beawarethatthechildlaborprovisionsoftheFLSAstipulatetheageatwhichachildmaywork,howmanyhourstheymaywork,andwhattypesoftaskstheymaynotperform.
A AccordingtotheDOL,Section13(b)(1)oftheFLSAprovidesanovertimeexemptionforemployeeswhoarewithintheauthorityoftheSecretaryofTransportationtoestablishqualificationsandmaximumhoursofservicepursuanttoSection204oftheMotorCarrierActof1935,withlimitedexceptions.TheActexemptsdrivers,drivers’helpers,loaderswhoareresponsibleforproperloading,andmechanicsworkingdirectlyonmotorvehiclesthataretobeusedintransportationofpassengersorpropertyininterstatecommercefromovertimeregulations.Theexemptiondoesnotapplytoemployeesnotengagedin“safetyaffectingactivities,”suchasdispatchers,officepersonnel,thosewhounloadvehicles,orthosewholoadbutarenotresponsiblefortheproperloadingofthevehicle,nordoesitapplytoemployeesofnon-carrierssuchascommercialgarages,firmsengagedinthebusinessofmaintainingandrepairingmotorvehiclesownedandoperatedbycarriers,orfirmsengagedintheleasingandrentingofmotorvehiclestocarriers.DOLFactSheet19hasadditionalguidanceregardingtheseexceptions.
A Afundamentalprincipleisthis:therearenoautomaticexemptionsintheFLSA–eachcase,job,andemployeearetobeevaluatedontheirownmerits.Thedutiestestforthelearnedprofessionaldictatesthattheemployee’sprimarydutymustbetheperformanceofworkrequiringadvancedknowledge,definedasworkwhichispredominantlyintellectualincharacterandwhichincludesworkrequiringtheconsistentexerciseofdiscretionandjudgment;theadvancedknowledgemustbeinafieldofscienceorlearning;andtheadvancedknowledgemustbecustomarilyacquiredbyaprolongedcourseofspecializedintellectualinstruction,all
A It’spossiblethattheseProgramDirectorsmayqualifyundertheexecutiveoradministrativeexemption,howeverthatcannotbedeterminedwithoutacarefulreviewofeachpositiondescription.DOLFactSheetBandFactSheetCdetailthesetwowhite-collarexemptions.
A Wehavenotcomeacrossaspecificdefinitionfor“intellectualordevelopmentaldisabilities”forpurposesofqualifyingforthelimitednon-enforcementprovisionsofthefinalrules.Forthis,youmaywishtoconsultwiththeDepartmentofLabororDepartmentofHealth&HumanServices,whocollaboratedtodevelopthisexceptiontotherule.
