nonprofit overtime question and answer sheet: what … · 2019-11-08 · a the flsa provides an...
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Q Ifallofmyexemptstaffearnmorethan$47,476,doIneedtodoanythingdifferently?
A Youareinluckinthissituation,asyoudon’thaveanyimmediateactionstepsforthiscohort.However,asyouhirestaffaroundthisthresholdinthefuture,besuretokeepinmindthatthesalarylevelminimumwillchangeeverythreeyearsbeginningJanuary1,2020.
Q Isthereanyaccommodationinthelawthatwouldallowemployeesworking30hoursaweektobeexemptiftheirpayisproportionatetothe$47,476?
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
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Q Whataboutstaffwhoaresupposedtoonlywork20hours/week?Iftheywork22hours,dotheyonlygetovertimeiftheyhit40hours?
A TheFLSArequiresovertimetobepaidtonon-exemptemployeeswhoworkmorethan40hoursinaworkweek.Iftheywork22hourstheyarepaidtheirregularrateforthose22hours(multiply22hoursbytheirregularrateofpay).
Q WhatdoIdoaboutpart-timeemployeeswhoseworkloadvariesduringtheyeardependingonvariationsinprogramactivity?
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
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meetalltherequirementsoftheDepartment’sregulations.DOLFactSheetsA-E(startwithFactSheetAthenlinktotheothers)detaileachofexemptions–Executive,Administrative,ProfessionalandComputer.
Q WhatexactlyisdueonDec1,anddowehavetosubmitittosomeone?DOL?
A ThenewregulationsgointoeffectDecember1,2016.NothingistobesubmittedtotheDOLorothergovernmentagencies,however,youmustbeincompliancewiththenewrulesbythatdateoryouriskbeingauditedandfoundinviolation.ByDecember1,2016youshouldplantohaveproperclassificationsforyouremployeesbasedonthenewrules.
Q Wecurrentlydonotrequireouremployeestocontributetotheirhealthinsurancecosts.CouldweraisesalariesandthenrequirecontributionstowardhealthinsuranceandbeOK?
A Youcancertainlydecidetoincreasesalariesandrequirecontributionstowardhealthinsurance,butdoingsotocomplywiththeregulationscouldhaveunintendedconsequences.Considerwhetherraisingsalariesalignswithyourcompensationphilosophyandhowitimpactsinternalandmarketequity.
Q Is"flextime"aviableoptiontobettercontrolweeklyhours?
A FlexiblepayforvariablehoursisaverynarrowandcomplicatedaspectoftheFLSA.Withoutadditionalinformation,itwouldbehardtoprovidearecommendation.
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Q Whataretheprovisionsaroundmake-uptime?
A Make-uptimeallowsnon-exemptemployeestotaketimeoffandworkthattimeearlierorlaterinthesameworkweekinordertoavoidbeingshort-paidoraccruingovertime.Thekeytomake-uptimeistoensurethatitisworkedinthesameworkweekthatthetimeoffistaken.Forexample,assumeanemployeeworksaregularMondaythroughFridayscheduleofeighthoursperday.TheemployeecantakeoffthreehoursonTuesday,andthenwork3extrahoursonWednesdayandThursdaytomakeupthetime.Likewise,anemployeewhoknowsaheadoftimethatheorshewillneedtotakeofffourhourson,say,aFriday,canscheduleinadvancetoworklongerdaysearlierintheweeksothatthere’snolossofpayforthetimetakenonFriday.Thesimilarworksinreverse.Anemployeewhoworks9hoursonaMondaycanbescheduledfor7hoursonadayduringthesameworkweektoavoidaccruingovertime.Somestates,mostnotablyCalifornia,havespecialprovisionsaroundmake-uptime,socheckyourstateguidelinesbeforeimplementingsuchapolicyatyournonprofit.
Q Isitpossibletocategorizeanemployeeasanon-exemptsalariedemployee?
A Yes,non-exemptemployeesmaybepaidonanhourlybasisorsalarybasis.
Q Canyouexplainthe10%rulealittlemore?IfIhaveanemployeemaking$45,000insalary,and$3,000inmedicalbenefits,dotheymeetthesalaryleveltest?
A Employerswillbeabletousenondiscretionarybonusesandincentivepayments(includingcommissions)tosatisfyupto10%ofthestandard
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salarylevel.Suchpaymentsmayinclude,forexample,nondiscretionaryincentivebonusestiedtoproductivityandprofitability.Employersmaynotincludethevalueofmedicalbenefitstowardsthestandardsalarylevel;thisprovisionislimitedtonondiscretionarybonusesandincentivepayments.Foremployerstocreditnondiscretionarybonusesandincentivepaymentstowardaportionofthestandardsalaryleveltest,theDOLpermitstheemployertomakea“catch-up”paymentwhichmustbepaidnolessfrequentlythanquarterly.
Q Withtheupdatedjobdescriptions,whoshouldsignthose?Theemployee?Themanager?HR?All?
A Therearenolegalrequirementsregardingthesigningofjobdescriptions,however,itisbestpracticethattheemployeeandsupervisorsignthepositiondescription.Thisindicatesthateachareawareoftheexpectationsandarealignedintermsofthedutiesandqualificationsforthejob,aswellastheFLSAclassification.HumanResourcesshouldbeinvolvedindevelopingorreviewingpositiondescriptionstoensureorganizationalconsistencyandcompliance.
Q Weareasmallgroupofsix.Fourofusareintheexemptrangeofsalariesbutasfarasdutiestest,wedonotallsupervise2ormore,butwouldiftherewasmorestaff.Isthereaproblemwithqualifying?
A SupervisionoftwoormorestaffisonlypartofthedutiestestfortheExecutiveexemption.TheseindividualsmaymoreappropriatelybeclassifiedasexemptundertheProfessionalorAdministrativeexemptiontests,whichfocusonotherareasofresponsibility.DOLFactSheetsA-E(startwithFactSheetAthenlinktotheothers)detaileachofexemptions–Executive,Administrative,ProfessionalandComputer.
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Q Isapart-timeExecutiveDirectorwhomanagestheorganizationwithasalarybelowthethresholdnownon-exempt?
A IftheExecutiveDirectordoesnotmeetthesalaryleveltest,meaninghe/shedoesnotearn$47,476onanannualbasis(actualsalary),thenhe/shewillnotbeconsideredexemptevenifhe/shemeetsthedutiestestsforexemption.
Q Allofourstaffaresalariedandwearepaidsemi-monthly(15thandlastdayofmonth).Doovertimehoursneedtobepaidweekly/bi-weekly?
A Non-exemptemployeesmustbepaidovertimenolaterthanonepayperiodinarrears.Employerswhopaysemi-monthlyarecautionedtopayattentiontohowworkweeksintersectwithpayperiods.Youmaybebetteroffhavingmultipletimekeepingperiods–oneforexemptemployeesandonefornon-exempt–inordertoavoidmiscalculatinghours.Also,checkstatewagepaymentlaws;somestatesmayrequirenon-exemptemployeestobepaidmorefrequentlythansemi-monthly.
Q Ifteachersareexemptundertheprofessionalexemption,dotheystillneedtomeetthesalarythreshold?
A TeachersarenotrequiredtomeetthesalarybasisorsalaryleveltestundertheFLSA.Mostteacherpositionsareconsideredexemptbasedontheirdutiesalone.Theyareexemptiftheirprimarydutyisteaching,tutoring,instructingorlecturingintheactivityofimpartingknowledge,andiftheyareemployedandengagedinthisactivityasateacherinaneducationalestablishment.
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Q Whataretherulesforbeingoncall?Whatifwehavecounselorstakingkidsovernightcamping?Iftheyareasleepbutpresentincaseofanemergency,isthattimeforwhichtheyneedtobecompensated?Andwhataboutsummercampstaffwhomayworkmorethan40hours,butarecontractedforastipendrateforveryshortengagements–sayonly1or2weeks?
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.
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Q Doesitimpacttruckdrivers?
A AccordingtotheDOL,Section13(b)(1)oftheFLSAprovidesanovertimeexemptionforemployeeswhoarewithintheauthorityoftheSecretaryofTransportationtoestablishqualificationsandmaximumhoursofservicepursuanttoSection204oftheMotorCarrierActof1935,withlimitedexceptions.TheActexemptsdrivers,drivers’helpers,loaderswhoareresponsibleforproperloading,andmechanicsworkingdirectlyonmotorvehiclesthataretobeusedintransportationofpassengersorpropertyininterstatecommercefromovertimeregulations.Theexemptiondoesnotapplytoemployeesnotengagedin“safetyaffectingactivities,”suchasdispatchers,officepersonnel,thosewhounloadvehicles,orthosewholoadbutarenotresponsiblefortheproperloadingofthevehicle,nordoesitapplytoemployeesofnon-carrierssuchascommercialgarages,firmsengagedinthebusinessofmaintainingandrepairingmotorvehiclesownedandoperatedbycarriers,orfirmsengagedintheleasingandrentingofmotorvehiclestocarriers.DOLFactSheet19hasadditionalguidanceregardingtheseexceptions.
Q Areprofessionsthatrequirelicensingautomaticallyexempt-i.e.socialworkers,etc.?
A Afundamentalprincipleisthis:therearenoautomaticexemptionsintheFLSA–eachcase,job,andemployeearetobeevaluatedontheirownmerits.Thedutiestestforthelearnedprofessionaldictatesthattheemployee’sprimarydutymustbetheperformanceofworkrequiringadvancedknowledge,definedasworkwhichispredominantlyintellectualincharacterandwhichincludesworkrequiringtheconsistentexerciseofdiscretionandjudgment;theadvancedknowledgemustbeinafieldofscienceorlearning;andtheadvancedknowledgemustbecustomarilyacquiredbyaprolongedcourseofspecializedintellectualinstruction,all
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accordingtoDOLregulations.Asexamples,funeraldirectors,cosmetologists,realestatesalespeople,insurancebrokersandprivateinvestigatorsallrequirelicenses;buttheyarenotbyvirtueofthatfactautomaticallyexemptfromtheminimumwageorovertimeprovisionsoftheFLSA.
Q Mightdirectorsofprogramsforsocialjusticeorganizations,campaigndirectors,professionalcommunityorganizers,andpaidactivistsmeetthedutiestestforclassificationasexemptprofessionalemployees?
A It’spossiblethattheseProgramDirectorsmayqualifyundertheexecutiveoradministrativeexemption,howeverthatcannotbedeterminedwithoutacarefulreviewofeachpositiondescription.DOLFactSheetBandFactSheetCdetailthesetwowhite-collarexemptions.
Q Regardingthenon-enforcementforprovidersofMedicaidfundedservicesforindividualswithintellectualordevelopmentaldisabilitiesinresidentialhomesandfacilitieswith15orfewerbeds,werungrouphomesforthesevereandpersistentlymentallyillandIamwonderingifyouhavemoreinsightonthedefinitionof“intellectualordevelopmentaldisabilities,”soweknowwhetherornotthatappliestoourgrouphomes.
A Wehavenotcomeacrossaspecificdefinitionfor“intellectualordevelopmentaldisabilities”forpurposesofqualifyingforthelimitednon-enforcementprovisionsofthefinalrules.Forthis,youmaywishtoconsultwiththeDepartmentofLabororDepartmentofHealth&HumanServices,whocollaboratedtodevelopthisexceptiontotherule.