FLSA – What Managers Need to Know

October 2016

Presentation Overview

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Outcomes and implicationsManager’s responsibilitiesFinancial ImplicationsFLSA recapQ & A at end

General FLSA Options for Impacted Employers

Pay time-and-a-half for overtime work over 40 hours

Raise workers’ salaries above new threshold

Limit workers’ hours to 40 per week

Some combination of the above

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SHRM Estimated Automatic Increases

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FLSA Results for MSUAll exempt positions reviewed (415 total)

- 225 positions remained exempt

- 190 positions reclassified to non-exempt

Financial impact reviewed and no salary increases given

Impacted employees and department heads notified

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Session focus: Manager’s Responsibility

Compensable Time

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FLSA Overtime and Compensable Time

Overtime – must pay if employee works over 40 hours

If “suffered or allowed” to work, must be compensated

Flexible scheduling – In lieu of overtime

- Schedule is adjusted to prevent overtime

- Must be within the same workweek

MSU does not have “comp time” to bank OT hours worked

Paid leave counts as time worked for overtime (MSU policy)

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“Off-Duty “ Overtime Concerns

Taking work home and not reporting time

Making/receiving job-related phone calls at home

Working through lunch

Working before or after shifts

Job-related “volunteer” work

Non job-related volunteer work

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“Off-the-Clock” WorkEmployees accustomed to working to get job done now

must be aware of hours worked

Never encourage employee not to report all hours

Employer must have realistic expectations

Work-load vs. performance

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Employee Working on Holiday

Holiday pay– enhanced holiday pay or time off above regular pay is a type of benefit

Regular pay plus 1.5 holiday pay

Must take time within 90 days from holiday

If employee works overtime on holiday, must be paid overtime that week

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Meal Time and Breaks

KRS requires a “reasonable period for lunch” close to middle of shift (no sooner than three hours or more than five hours)

Neither federal or Kentucky law requires paid meal break

Employees should be required to take meal break

Must compensate employees who work through meal period

Kentucky regulations: rest periods and breaks

- 10 minutes every four hours

- Can’t dock pay for rest periods

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Travel11

Ordinary home to work travel not work time

Travel between job sites during normal work day is work time

Travel that keeps non-exempt employee away from home overnight is work time when employee actually performs work

- Time spent as passenger on any mode of transportation not work time unless during normal work hours or actual work performed

- Employee required to drive is compensated for all travel hours

HR will provide resources, including website examples

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Training

Time spent in lectures, seminars, classes or training is considered hours worked and must be paid unless all four conditions are met:

1. Attendance is voluntary

2. Event is not directly job-related

3. Attendance is outside of employee’s regular work hours

4. Employee performs no productive work during this period

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On-Call13

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Waiting Time14

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Mobile Device Overtime Concerns15

Laptops

Tablets

Smartphones

Remote Access

Manager role:• Set expectations• Behavioral changes • Email curfew?

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Manager’s Responsibilities

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Manager’s Responsibilities

Prestige & status

EquityLoss of

autonomyDecreased

opportunityLoss of

flexibility

Exempt workload increase

Employee Morale

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Manager’s Responsibilities

Be aware of FLSA provisions

Manage overtime based on need and budget limitations

Ensure employees work only when needed

Avoid encouraging work after hours

Approve overtime prior to work if possible

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Financial Implications for Managers

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Financial Overview

Transition planning

Overtime

Employee workload review

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Impact on Transitioning Employees

Transition from monthly to bi-weekly pay cycle

FLSA transition advance

FLSA individual meetings

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Time Reporting Responsibilities

Submit and approve by deadline

Tools provided to raise awareness of deadlines

- Payroll calendar

- Google calendar

- Email reminders

Best practices

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Overtime Management Reports

Reports provided to VP, Dean, Director, Chair and Financial Manager

Reports provided by 20th of month

Reimbursements posted by 20th of month

Self supporting orgs and auxiliaries fund their own overtime

MSU Institutional overtime budget

Best practices

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FLSA Recap

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FLSA Lawsuits Top 10

10. Failure to compensate employees for training time

9. Failure to compensate employees who volunteer their time

8. Failure to include extra compensation in overtime pay

7. Failure to pay employees for short breaks

6. Failure to pay employees who work through lunch

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FLSA Lawsuits Top 10

5. Docking time for employees working on the clock

4. Failure to pay employees working “off the clock”

3. Misclassification of employees as independent contractors

2. Misclassification of employees as exempt

1. Failure to understand that FLSA generally favors employee; burden of proof is on employer

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FLSA Recap

Law intended as benefit for employees not previously eligible for overtime

Departments responsible for managing overtime

Changes how organizations do business

Federally mandated by December 1

MSU implementation date is November 12

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