remain compliant with flsa updates

Remaining Compliant with FLSA Updates

Presented by Tamara BrownfieldPresident, Atlas Compensation Partners

Moderated by Lyla Rozelle Customer Success Manager, Jazz

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Compensation Brief:FLSA Overtime Final Rule

Tamara BrownfieldAtlas Compensation Partners, LLC

June 23, 2016

Presenter Biography

6/20/16 AtlasCompensationPartners,LLCConfidential

TamaraBrownfield§ PresidentandPrincipalConsultantofAtlasCompensation Partners,LLC

§ Nearly20yearsofexperience,fromanalysttoboardroom

§ Experienceinallareasofcompensation (globalbroad-based, salescompensation,andexecutive)

§ Industryexperience:financial,manufacturing, chemical,technology,education,andsoftware

§ Expertise:designandimplementationofcompensationphilosophy, globalbanding andsalarystructures,global incentiveplans,executivecompensationstructuresandprograms,andglobal rewardandrecognitionprograms

§ Compensationcertifications:WorldatWorkdesignationsofCertifiedCompensationProfessional (CCP),GlobalRemunerationProfessional (GRP),andCertifiedExecutiveCompensationProfessional (CECP)

§ Education:Bachelor’sofSciencedegreeinIndustrialManagementfromCarnegieMellonUniversity3

Agenda


§ Background

§ SummaryofFinalOvertimeRule

§ EmployerCompliance&Considerations

§ Appendix

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Background


§ InMarch2014,PresidentObamadirectedtheDepartmentofLabor(DOL)toupdateandmodernizetheFairLaborStandardsActof1938(FLSA)minimumwageandovertimepayprotections

§ TheDOLpublishedtheproposedruleinJune2015

§ ThefinalrulewasreleasedinMay2016withcompliancerequiredbyDecember1,2016

§ Thefinalruleupdatesthesalarylevelrequiredforexemption(the“standardsalarythreshold”)toensuretheintendedovertimeprotectionsarefullyimplementedandtosimplifytheidentificationofthoseeligibleforovertime

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Summary of Final Overtime Rule


§ Thestandardsalarylevelthresholdissetatthe40th percentileofweeklyearningsforfull-timesalariedworkersinthelowest-wageCensusregion(currentlytheSouth)

⎕ $47,476peryear($913perweek)*§ TheHighlyCompensatedEmployees(HCE)salarythresholdissetatthe90th

percentileoffull-timesalariedworkersnationally⎕ $134,004annually

§ Employersmayapplynon-discretionarybonusesandincentivepayments(commissions)upto10%ofthestandardthresholdlevel;paymentsmustbemadeonatleastaquarterlybasis

§ Nochangesweremadetothedutiestests

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*Exceptions:§ AmericanSamoa ~salarylevelthresholdupdatedto$767perweek(previously$380)§ MotionPictureIndustry~salary levelthresholdupdatedto$1397perweek(previously $695)§ ComputerProfessionals ~ifpaidhourly,thresholdis$27.63/hour



§ BeginningJanuary1,2020,boththestandardsalarylevelthresholdandtheHCEsalarythresholdwillautomaticallyupdateeverythreeyears

§ Thestandardsalarythresholdistiedtothe40thpercentileoffull- timesalariedworkersinthelowest-wageregion

§ TheHCEsalarythresholdistiedtothe90thpercentileoffull-timesalariedworkersnationally

§ TheDepartmentofLaborwillpostnewsalarylevels150daysinadvanceoftheireffectivedate (e.g.August1,2019forthefirstupdate)

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6/20/16 AtlasCompensationPartners,LLCConfidential 8

Component CurrentRule(2004-November 30,2016)

FinalRule(EffectiveDecember1,2016)

SalaryThresholdLevel $455/week $913/week40th percentileofweeklyearningsforfull-timesalariedworkersinthelowest-wageCensusregion(currentlythe

South)

HCEAnnualSalaryThresholdLevel

$100,000 $134,00490thpercentileoffull-timesalariedworkersnationally

AutomaticUpdate None Every3years

Bonuses Noprovisiontoincludenon-discretionarybonuses/incentives towardthestandardsalary

threshold level

Upto10%ofthestandardsalarythresholdcanbemade-upofnon-discretionary

bonuses/incentives paidatleastquarterly

DutiesTest VisittheWageandHourDivisionoftheDOL:

https://www.dol.gov/whd/

Nochanges

Employer Compliance & Considerations


§ EmployershaveuntilDecember1,2016tocomeintocompliance§ Stepstotake:

⎕ Identifyexemptemployeesbelow$47,476andHCEsbelow$134,004§ Includesalaryandnon-discretionarybonus/incentives(paidatleastquarterly)§ SeesampleworksheetinAppendix

⎕ Determineaction§ SeetableinAppendix

⎕ ReviewbudgetandHR/Payrollsystemsimplications⎕ Training,ifneeded

§ Recordingtimeworked§ Rulesaroundovertime,timeworked,timenotallowedtowork

⎕ Communication!§ Managercommunications§ Employeecommunications

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Employer Compliance & Considerations


§ Considerations§ Ifnewlynon-exemptrolehasexemptduties

⎕ Movedutiestoanotherroleorremainincurrentrole?

§ Paycompression

§ Salaryranges(minimumsbelowstandardthreshold?)

§ Addressthepotentialofhavingexemptandnon-exemptemployeesinthesamerole

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Appendix


Sample Worksheet


Includeallcurrentexemptemployeesbelow$47,476 threshold

Title Grade/Band AnnualSalary

HourlyRate(Salarydividedby2080

hours)

Actual/EstimatedTypicalHoursWorked

inWorkweek

ExpectedCurrentBonus/Incentive(if

applicable)

ExpectedBonus/IncentiveafterRe-classorChangeinSalary(maynotbeabletodetermineyet)

$AmountBelowNewThreshold

#ofHoursWorkedover40inaWorkweek(0ifwork

lessthan40)

Withthisinformation, youcanthencalculate:§ Currentweeklysalaryrate,includingnon-discretionary quarterlybonus, anddeterminetheamountbelow

thenewthreshold§ Weeklysalaryrate,includingnon-discretionary quarterlybonus, afterre-classificationorsalarychange§ Potentialimpactofovertimepaidifmoving fromexempttonon-exempt

Some Alternatives


AlternativeResultinginIncreasedLaborCosts AlternativesResulting inNoChangetoLaborCosts

Adjust salariesup tothenewstandardthreshold level Reclassifytonon-exemptwithoutpayreductionbutlimithoursper weekto40;noadditional staff

Reclassifyto non-exemptwithoutpayreductionordecreaseinhours

Reclassifytonon-exempt, reducepaytooffsetovertime

Reclassifytonon-exemptwithoutpayreduction butlimithoursperweekto40;addtostaff

Adjust salariesup tonew standardthreshold tomaintainexemption;cutstafftooffsetcosts

Reduceoreliminatebonus/incentive eligibility tooffsetcosts

Remember:Inaddition tomeetingthestandardsalarythreshold, forajobtobeclassified asexempt,itmustalsomeettherequirementsoftheexemptdutiestest

Contact


Needhelpwithyourcompensationphilosophy,programdesign,competitivemarketanalysis,compensationcompliance,orjustwanttolearnmore?

TamaraBrownfield,CCP,GRP,CECPPresidentandPrincipalConsultantAtlasCompensationPartners,LLCwww.atlascompensation.comtamara@atlascompensation.com412-735-5492

Thankyou!

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AtlasCompensationPartners,LLC(“Atlas”)isaglobalandexecutivecompensationconsulting firmfocusingonpartnering withitsclientstodesignandbuildeffectivecompensationprograms.Ledbyitsfounder,TamaraBrownfield,Atlasworksasanextensionofyour teamthroughout thefullprocessofdeveloping aphilosophy, designing programs,andprogramimplementation. Atlaswillpartnerwithyou todesigneffectiveexecutiveandemployeecompensationprogramstoretain,engage,attract,andrewardyourteams.

TamaraBrownfield,CCP,GRP,CECP,PresidentandPrincipalConsultant,hasexperience,knowledge, andexpertiseinareasofglobalcompensation, salescompensation,andexecutivecompensation inavarietyofindustries including financial,manufacturing, chemical,technology,education,andsoftware.Hernearly20yearsofexperience,fromanalysttoBoardroom, includedesignandimplementation of:compensationphilosophy, globalbandingandsalarystructures,global incentiveplans,executivecompensationstructuresandprograms,andglobal rewardandrecognition programs.

TamarahasearnedWorldatWorkdesignations ofCertifiedCompensationProfessional (CCP),GlobalRemunerationProfessional (GRP),andCertifiedExecutiveCompensationProfessional (CECP).TamaraholdsaBachelor’sofSciencedegreeinIndustrialManagementfromCarnegieMellonUniversity.

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remain compliant with flsa updates

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