the wage & hour trifecta -...

The Wage & Hour TrifectaDOL Proposals on Overtime Exemptions, the Overtime Calculations and Joint EmploymentMay 1, 2019

Lori BrownCEO, ComplianceHR

brown@compliancehr.com @labrown1419

• Former Littler Shareholder• Former General Counsel / HR

Chief of Global Security Organization

Follow Us on Twitter: @Compliance_HR

2Free 7-Day Trial: freetrial@compliancehr.com Code: Overtime

1. Q & A Box on your screen (questions are confidential – visible to presenters only)

2. E-mail me at brown@compliancehr.com –monitored throughout today’s presentation (attendees will not be mentioned by name or company)

3. E-mail Tammy at tammy@compliancehr.com

Answering Your Questions

Free 7-Day Trial: freetrial@compliancehr.com Code: Overtime

1. Full slide presentation (pdf format)2. Link to recorded audio presentation3. ComplianceHR Free Trial Code:

Email: freetrial@compliancehr.comCode: Overtime

What You’ll Receive

OBJECTIVES FOR TODAY’S SESSION:

1. Joint Employment2. Exemptions from Overtime3. Calculating Overtime – the Regular Rate 4. Technology Can Help!5. ComplianceHR Free Trial Code

Email: freetrial@compliancehr.comCode: Overtime

We Need You!

1. Follow CHR and Tammy on Twitter

@Compliance_HR

@tdmccutchen

2. Subscribe to our YouTube channel

3. Subscribe to our mailing list

Free 7-Day Trial: freetrial@compliancehr.com Code: Overtime

Tammy McCutchenVP Strategy, ComplianceHR

tammy@compliancehr.com @tdmccutchen

• Littler Principal• Former Administrator, US-DOL

Wage & Hour Division and author of 2004 revisions to the overtime regulations

• Leading authority on federal and state wage and hour laws

Joint Employment

Free 7-Day Trial: freetrial@compliancehr.com Code: Overtime 8

Under the FLSA, an employee may have one or more joint employers

29 C.F.R. Part 791, which defines when two companies are considered joint employers, was last revised in 1961, 58 years ago

A joint employer is jointly and severally liable for any FLSA violations

Joint Employment Basics

Published in Federal Register on April 9

60-day public comment period Comments due on June 10

www.regulations.gov

Search for RIN # 1235-AA24

The Notice of Proposed Rulemaking

Does the potential joint employer actually exercise the power to:

1. Hire or fire the employee

2. Supervise and control the employee’s work schedules or conditions of employment

3. Determine the employee’s rate and method of payment

4. Maintain the employee’s employment records

New Four-Part Balancing Test

The FLSA definition of “employ” as “to suffer or permit work”

“Economic dependence” on the potential joint employer

Whether the employee: Is in a specialty job or a job otherwise requiring special

skill, initiative, judgment, or foresight Has the opportunity for profit or loss based on managerial

skill Invests in equipment or materials required for work Employs helpers or assistants

Not Relevant to the JE Analysis

Operating as a franchisor Requiring a business partner to institute workplace

safety measures, wage floors, or sexual harassment policies

Providing a sample employee handbook Allowing a business partner to operate on your

premises Jointly participating in an apprenticeship program,

association health plan, or retirement plan

Business Practices that Do Not Impact JE Status

Review your contracts with business partners in light of the DOL’s proposed four-part balancing test

Preparing for Change –Joint Employment

Overtime

Minimum salary of $455 per week ($23,660 annual)

Salary must be guaranteed and paid in full for each week the employee performs any work No salary required for lawyers, doctors,

teachers and outside sales

Computer employees also may be paid $27.63 per hour

Meet the duties tests for exemption:

Executive

Administrative

Professional

Computer

Outside sales

“White Collar” Exemption Basics

Published in Federal Register on March 22

60-day public comment period Comments due on May 21 www.regulations.gov Search for RIN # 1235-AA20

Minimum Salary Level

POLL: Is the Minimum Salary Level:

Too highToo lowJust right

Up to 10% of the minimum salary level may be satisfied with non-discretionary bonuses, commissions and other incentive pay that are paid annually or more frequently

Let’s do the math:$679 – 10% = $611.10 weekly salary

$35,308 x 10% = $3,530.90 bonuses/commission paid during the year

Bonuses, Incentive Payments, Commissions

POLL: How Likely Is Your Company To Use The 10% Rule?

Unlikely Likely Very likely

DOL will review every four years 20th percentile of salaries in

South/Retail for minimum salary

Through notice-and-comment rulemaking

No automatic increases

Future Increases

Review salary levels Review job duties

Preparing for Change –Overtime Exemptions

Increase Salary or Reclassify? Pull salary and incentive pay data

for all employees earning below $35,309

Calculate the cost of increasing salary to the minimum $35,309

Compare with the cost of paying overtime: (weekly salary / 40) * 1.5 * expected OT hours

Review Salary Levels

• Review HRIS data• Review documents• Conduct interviews• Research and apply the law

Review Job Duties:The Manual Process

• Complete a questionnaire

• Get an answer

Review Job Duties: An Easier Way

Let’s Check it Out!

Traditional OT Audit690 Minutes

Navigator OT20 Minutes

97% Less Time Per Evaluation

Regular Rate

Under the FLSA, non-exempt employees must be paid after 40 hours worked in a week overtime at 1.5 times an employees “regular rate” of pay

The “regular rate” of pay includes “all remuneration for employment” earned in a work week divided by all hours worked in a work week

Some types of compensation are excluded from the regular rate by statute

All Remuneration ÷

All HoursFree 7-Day Trial: freetrial@compliancehr.com Code: Overtime 30

Regular Rate Basics

INCLUDED

Hourly wages or salary Commissions Non-discretionary bonuses Prizes and awards related to work Shift or job differentials On-call pay

EXCLUDED

Employee benefits Payments for time not worked Business expense

reimbursements Certain premium pay Gifts for Christmas or special

occasions Discretionary bonuses

Compensation Included and Excluded

Published in Federal Register on March 29

60-day public comment period

Comments due on May 28 www.regulations.gov Search for RIN # 1235-AA24

Tuition reimbursement and repayment of student loans

Payments for bona fide meal periods and certain types of “call-back” pay

Business expense reimbursements, even if not “solely” for the benefit of the employer

Proposed Exclusions from the Regular Rate

Wellness benefits, including gym memberships, fitness classes and on-site specialist treatment

Discounts on retail goods and services

Payouts to employees of unused vacation and sick leave

Accident, unemployment and legal services benefits

No proposed changes to the definition New examples of excludable

discretionary bonuses Bonuses paid to employees who

make unique or extraordinary efforts that are not awarded according to pre-established criteria

Bonuses for overcoming challenging or stressful situations

Employee-of-the-month bonuses Severance bonuses

Discretionary Bonuses

Conduct an audit of your pay codes Identify codes used for non-exempt

employees that are not being included in the regular rate

For each code, identify specific exclusion from the regular rate, if any 29 USC 207(e) 29 CFR Part 778 (current and

proposed)

Preparing for Change –Regular Rate

EarningsCode Description

1 REG HRLY2 OT HRLY6 SAFETY7 INCENTIVE10 VACATION11 SICK PAY12 HOLIDAY20 BONUS25 SHIFT PREMIUM30 S/T DISABILITY40 HEALTH INS PRE TAX50 401(k)61 AUTO ALLOW63 OPERATOR INCENTIVE68 PER DIEM

“Navigator OT is so beneficial for our organization as it allows

for quick and precise analysis of a complex legal issue. I like

that it provides a thorough analysis and explanation,

which helps when discussing the results with the business

clients.”

- Senior Employment CounselFortune 100 Company

Compliance Made Easy….Why Wait?

Questions?

Free 7 Day Trial:Email: freetrial@compliancehr.com Code: Overtime

Thank you!Don’t forget about your free trial…

Email us at: freetrial@compliancehr.com Code: Overtime brown@compliancehr.com tammy@compliancehr.com

the wage & hour trifecta -...

Documents

fisk flsa final presentation

multi-state trifecta

flsa: cutting-edge issues in wage and hour law · 1,800...

sonny's flsa settlement

flsa compliance

flsa guide

deloitte flsa lawsuit

flsa information session

trifecta on amaroo

the flsa & overtime rules

the tehachapi trifecta tehachapi trifecta.pdf · the...

flsa salary basis test

the stem trifecta

pwc change trifecta

avoiding flsa overtime pay claims for after-hours...

update: flsa “overtime” regulations -...

flsa compliance update

a parsing trifecta

september flsa compliance jll

making a flsa exemption status determination: a work · pdf...