Strategies for Responding to the Changes in FLSA Overtime Eligibility
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Transcript of Strategies for Responding to the Changes in FLSA Overtime Eligibility
![Page 1: Strategies for Responding to the Changes in FLSA Overtime Eligibility](https://reader031.fdocuments.us/reader031/viewer/2022030318/5a6631d77f8b9a214f8b6281/html5/thumbnails/1.jpg)
Webinar Details
Start Time: 2:00pm EST
Live Webinar:
Webinar Audio:
You can dial the telephone numbers located on your webinar panel.
Or listen in using your microphone or computer speakers.
Welcome!
Employer Solutions
![Page 2: Strategies for Responding to the Changes in FLSA Overtime Eligibility](https://reader031.fdocuments.us/reader031/viewer/2022030318/5a6631d77f8b9a214f8b6281/html5/thumbnails/2.jpg)
Webinar DetailsWebinar DetailsWebinar Details
• Presentation is roughly 1 hour
• All phone lines are muted
• Slide deck and access to video recording will be made available
• If anyone has any questions during this webinar – please type them in your Questions Box located at the bottom of your webinar panel
| Employer Solutions
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Webinar DetailsToday’s Presenter
Mark Boutilier | Net@WorkSenior Solutions Engineer
• Over 30 years developing and implementing HR and Payroll solutions• HR Practitioner for over 10 years• Sage HRMS Certified trainer and consultant• American Payroll Association Member
| Employer Solutions
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Webinar DetailsWebinar DetailsToday’s Agenda
| Employer Solutions
Review of Changes
Tools for Analysis
Implementation Options
Tools for Monitoring
Net@Work Survival Kit
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Webinar DetailsFair Labor Standards Act
| Employer Solutions
US Employers are
required to pay their
employees 1 and ½
times their regular
hourly rate for hours
worked over 40 in a
week
“Duties” Test
Salary Test
“White Collar”
Exemption From
Overtime Provisions
of Fair Labor
Standards Act
Minimum Salary Threshold
Highly Compensated
Employee Salary
AND
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Webinar DetailsFinal Rule signed May 18, 2016
| Employer Solutions
Last increase
to FLSA wage
was in 2004.
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Webinar DetailsFinal Rule Takes Effect December 1st 2016
| Employer Solutions
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Webinar DetailsKey Changes to Salary Test
| Employer Solutions
• Minimum Salary Threshold increase from $23,660 to $47,476 annually
• Highly Compensated Employees minimum salary increases from
$100,000 to $134,004
• Threshold will be automatically updated every three years
• Nondiscretionary bonuses, commissions or incentive pay may be used to
meet up to 10% of the required salary threshold
• Employers can make ‘catch up’ payments quarterly to meet the threshold
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Webinar DetailsAnnual Increase
| Employer Solutions
$47,476 per year
$913 per week
$22.825 per hour
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Webinar DetailsThree Tests for Salary Exemption under FLSA
| Employer Solutions
• Salary Basis Test (unchanged except for 10% bonus)
• Salary Level Test (increased 100% effective 12.1.16)
• Job Duties Test (unchanged)
Critical: All 3 tests must be met to qualify.
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Webinar DetailsDuties Test
| Employer Solutions
Section 13(a)(1) of the FLSA provides an exemption from both minimum wage and overtime pay for employees who are employed in a bona fide:• Executive;• Administrative;• Professional; or• Outside Sales capacity.
Certain computer employees may be exempt professionals under Section 13(a)(1) or exempt under Section 13(a)(17) of the FLSA.
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Webinar DetailsFor a deeper dive . . . . .
| Employer Solutions
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Webinar DetailsFor a deeper dive . . . . .
| Employer Solutions
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Webinar DetailsAnalyse Workforce
| Employer Solutions
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Webinar DetailsAnalysis Tools
| Employer Solutions
• Benefit Eligibility Rules
• Job Code Configuration
• Employee Census
• Employee FLSA Group Status
• Employee Position in Grade
What is the current status of your workforce?
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Webinar DetailsAnalysis Tools
| Employer Solutions
• Benefit Eligibility Rules
• Job Code Configuration
• Employee Census
• Employee FLSA Group Status
• Employee Position in Grade
What is the current status of your workforce?
![Page 17: Strategies for Responding to the Changes in FLSA Overtime Eligibility](https://reader031.fdocuments.us/reader031/viewer/2022030318/5a6631d77f8b9a214f8b6281/html5/thumbnails/17.jpg)
Webinar DetailsAnalysis Tools
| Employer Solutions
Are your benefit eligibility rules different for Exempt\Non-exempt?
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Webinar DetailsAnalysis Tools
| Employer Solutions
Job Codes by Exempt Status and Salary Grade
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Webinar DetailsAnalysis Tools
| Employer Solutions
What is the current status of your workforce?
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Webinar DetailsAnalysis Tools
| Employer Solutions
What is the current status of your workforce?
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Webinar DetailsAnalysis Tools
| Employer Solutions
Employees by FLSA Grouping
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Webinar DetailsAnalysis Tools
| Employer Solutions
Employees by Position in Grade
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Webinar DetailsTracking Effected Employees
| Employer Solutions
• Actual hours worked
• Responsibilities
• Potential for Overtime
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Webinar DetailsAnalysis Tools
| Employer Solutions
Overtime Calculator
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Webinar DetailsWhat changes do we implement?
| Employer Solutions
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Webinar DetailsPossible Responses
| Employer Solutions
• Do nothing – salaried employees already meet test or could
with incentives
• Increase salaried employees wages to meet the new test
• Reclassify the employees as hourly\nonexempt and pay
overtime
• Restructure workforce or particular jobs – reassign duties to
keep job duties to 40 hours
What are some possible responses?
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Webinar DetailsIncrease weekly wages to $914
| Employer Solutions
• May need to increase again in three years
• Increased wage expense (wages and fringe)
• Pay grade compression
• Resentment on part of co-workers.
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Webinar DetailsReclassify Job as Non-Exempt
| Employer Solutions
• Possible overtime expense
• ‘Loss’ of Exempt status
• Retraining and enforcement of timekeeping and overtime
policies
• Possible change in benefit or PTO policies
• Job Sharing or other responsibility reductions to reduce OT.
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Webinar DetailsReclassify Job as Salaried \ Non-Exempt
| Employer Solutions
• Possible overtime expense
• Retraining and enforcement of timekeeping and overtime
policies
• Job Sharing or other responsibility reductions to reduce OT
• Greater administrative oversight required.
• Reduced overtime cost.
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Webinar DetailsFluctuating Work Week
| Employer Solutions
• Salaried Non-exempt must be paid a regular salary at least the
minimum wage.
• Hours over 40 in a week are paid at the employees ‘regular’
rate times 1/2
• Overtime hours are calculated weekly, regardless of pay
frequency.
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Webinar DetailsFluctuating Work Week - Examples
| Employer Solutions
Example 1 – Employee works 45 hours this week
• Weekly Salary $800
• Regular Rate 800/45 = $17.78
• Overtime Premium 17.78/2 = $8.89
• Pay for this week: 800 + (5*$8.89) = $844.45
• Pay under traditional OT: (40*$20)+(5*$30)= $950.00
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Webinar DetailsFluctuating Work Week - Examples
| Employer Solutions
Example 2 – Employee works 42 hours this week
• Weekly Salary $800
• Regular Rate 800/42 = $19.05
• Overtime Premium 19.05/2 = $9.52
• Pay for this week: $800 + (2*$9.52) = $819.05
• Pay under traditional OT: (40*$20)+(2*$30)= $860.00
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Webinar DetailsFluctuating Work Week - Examples
| Employer Solutions
Example 3 – Employee works 35 hours this week
• Weekly Salary $800
• Pay for this week: $800.00
• Pay under non-exempt: (35*$20)= $700.00
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Webinar DetailsFluctuating Work Week Setup
| Employer Solutions
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Webinar DetailsWebinar Details
35
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Webinar DetailsFluctuating Work Week - Catches
| Employer Solutions
• Administration - What is the employee’s ‘regular rate’ this week?
• Fixed Salary – Fixed means fixed, no deductions of pay for unpaid
time.
• Actual work schedules hours must fluctuate.
• Unpopular with DOL – Don’t look for any breaks if audited
• State Laws – Some states do not recognize FWW as a legitimate
alternative.
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Webinar DetailsMonitor Workforce
| Employer Solutions
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Webinar DetailsMonitor Tools
| Employer Solutions
• Crystal Reports
• Pay Information Export
• Payroll Year to Date Information
• Alerts
• Employees Hired Below Minimum
• Overtime Paid
• Overtime Paid Dashboard
How are we doing?
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Webinar DetailsMonitor Tools
| Employer Solutions
How are we doing?
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Webinar DetailsMonitor Tools
| Employer Solutions
New Hires or Promotions below minimum
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Webinar DetailsMonitor Tools
| Employer Solutions
Automated Monitoring of Overtime Use
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Webinar DetailsNet@Work FLSA Survival Kit
| Employer Solutions
$1100
$500
Free Resources
• Free Resources
• Crystal Reports
• Sage Alerts – Overtime Alerts
• 3 hours of consulting to install and configure Alerts* and Crystal Reports
• Free Resources
• Six Crystal Reports
• One hour consulting to install and configure the reports.
• Links
• Sample Policies
• FLSA Overtime Decision Grid
• Final Overtime Rule Calculator.xls
How can Net@work Employer Solutions help?
*Sage Alerts and Workflow must be implemented
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Webinar DetailsUpcoming Seminars
| Employer Solutions
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Webinar DetailsThank You For Attending!
Mark Boutilier | Net@Work
Senior Solutions Engineer
(P) 800-719-3307 Ext 4805
| Employer Solutions
800-719-3307
www.netatwork.com
netatwork.com/blog
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