FSLA
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Overtime &
Fair Labor Standards Act
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What is FLSA?
- Federal law passed in 1938
- Enforced by Department of Labor
- Public employers became covered in 1986
- Revised April 20, 2004
- Covers
- Overtime
- Minimum Wage
- Child Labor
- Equal Pay
- Recordkeeping
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Purpose of FLSA
- Establishes minimum wage & overtime standards
- Distinguishes between covered (non-exempt) and excluded (exempt) employees
- Establishes overtime threshold (40 hr.)
- Specifies record-keeping requirements
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Critical Terms
- Hours worked
- Work week
- Regular rate
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“Hours Worked”
- Principal job activity
- “Suffer” or permit to work
- Rest periods less than 20 minutes in duration (except lunch)
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- Preliminary & postliminary activities
- Meal?
- On-call? Waiting to be engaged (with beeper; within 30 minutes; not drinking; cell phone; prepared to respond) = not compensable; Engaged to be waiting = compensable
- Training time – depends on whether the benefit is for the employee or the employer
- Commuting time – not covered
- Call backs – not covered
- Driving personal vehicle for overnight travel – not covered
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“Work Week”
- 168 consecutive hours during a 7-day period
- GMU standard work week:
- 12:00 am Sun thru 11:59 pm Sat
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“Regular Rate”
- Includes all forms of remuneration (e.g. shift differential, on-call pay, lump sum payments, 2nd job salary)
- Converted to an HOURLY rate
- Is particular to each work
week
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Types of Positions
- Exempt – not covered by FLSA
- Non-Exempt – covered under FLSA for time-and-one-half overtime
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- Meet Salary Basis, Highly Compensated, Executive, Administrative, Professional, or Computer Professional test for exemption
- Applies to each position individually based on duties and responsibilities, not to a class, Role, working title or category of position
Exempt Positions
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- Classified in pay bands 4 and above if exemption tests are met (as well as Faculty)
- No overtime payments required.
- In extremely rare situations, may provide:
- Compensatory time or straight-time pay for hours worked > 40 hours in a work week
- Should be for short duration of time under special circumstances (vacancy, special project, etc.)
Exempt Positions
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- Exempt employees paid for job, not hours worked
- Must meet salary basis test
- Salary must be more than $455 per week
Exempt Positions
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Exemption Test
Determination Factors
- HR performs tests to determine “white collar” exemption by category
- Executive
- Administrative
- Professional
- Computer Professional
- Highly Compensated
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Exemption Test
Determination Factors
- Based on primary duties, not title
- most important duties that account for 50% of time spent working
- Regularly exercises discretion and independent judgment
- Paid on a salaried basis for the job, not the number of hours worked
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Executive Test Criteria
- Must be compensated on a salary basis of not less than $455 per week
- Primarily manages a department or subdivision; and
- Directs the work of two or more full-time employees
- Has the ability to hire, fire & discipline or recommendation changes in status
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Changes in Status: promotions, etc
interviewing, selecting, and training of employees;
setting and adjusting their rates of pay and hours of work;
directing the work of employees;
appraising employees’ productivity and efficiency for the purpose of recommending promotions or other changes in status;
handling employee complaints and grievances;
disciplining employees;
planning the work; determining the techniques to be used; apportioning the work among the employees; determining the type of materials, supplies, machinery, equipment or tools to be used or merchandise to be bought, stocked and sold;
providing for the safety and security of the employees or the property;
planning and controlling the budget;
and monitoring or implementing legal compliance measures.
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- Payroll Manager
- HR Manager
- Accounting Manager
- Building & Grounds Director
- Business Operations Manager
Examples of
Executive Exempt Jobs
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Administrative Test Criteria
- Must be compensated at least $455 per week
- Primary duty must be office or non-manual work; and
- Directly related to management policies or general business operations; and
- Customarily and regularly requires the exercise of discretion and independent judgment
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Usually in functional areas such as:
- HR Generalist
- Internal Auditor
- Budget Analyst
- Grants Specialist
Examples of
Administrative Exempt Jobs
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Professional Test Criteria
- May be learned or creative professional
- Learned professional:
requires advanced knowledge in a field of science or learning
- Predominantly intellectual
- Acquired by a prolonged course of specialized instruction
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Professional Test Criteria
- Creative Professional:
Primary duty must be the performance of work requiring invention, imagination, originality, or talent
- Performs work in a recognized field of artistic or creative endeavor
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Examples of
Professional Exempt Jobs
Learned Exemptions:
- Physician (M.D., D.D.S.)
- Certified Nurse Practitioner
- Architect
- Lawyer
- Teachers & Professors
- Clinical Social Worker
Creative Exemptions:
- Musicians and composers
- Actors and painters
- Writers
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Computer Professional
Test Criteria
- Employed as a computer systems analyst, programmer or software engineer or similar skilled worker
- Primary duties consist of:
- Applications of systems analysis techniques or
- Design, development, documentation, analysis, creation, testing, or modification of computer systems or programs
- Design, documentation, testing, creation,
or modification of computer programs
related to machine operating systems
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Highly Compensated Employees
- Must perform non-manual work and
- Paid more than $100,000 per year and
- Perform at least one of the duties of an executive, administrative or professional employee
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- Job duties do not meet the Executive, Administrative, Professional or Computer Professional or Highly Compensated test criteria
Non-Exempt Employees
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- Classified in Pay Bands 1 - 3 and includes all hourly positions
- Must receive 1 1/2 times their regular rate for all hours worked in excess of 40 in a work week
- If leave was taken during week, non-exempt employee receives regular rate (straight time, 1 hour = 1 hour’s pay) for hours worked in excess of scheduled hours up to 40 during a work week
Non-Exempt Positions
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- Office Services Assistant/Office Services Specialist/Executive Secretary
- Carpenter/Electrician/HVAC Tech
- Police Dispatcher/Police Officer
- Enrollment Services Asst/Specialist
- Fiscal Technician
Examples of
Non-Exempt Jobs
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3 potential types of overtime compensation
Straight Time Overtime
- Time-and-one-half Overtime
- Overtime Leave
Non-Exempt Employees
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Straight Time Overtime
- Employee has physically worked less than 40 hr in the work week
- Paid at 1 times the employee’s hourly rate of pay
Non-Exempt Employees
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Time-and-one-half Overtime
- Based on WORKED time (not leave time)
- Employee has WORKED over 40 hours in a work week
- Paid at 1-1/2 times the employee’s regular rate of pay for each hour worked beyond 40
Non-Exempt Employees
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Overtime Leave
- Based on WORKED time (not leave time)
- Employee has WORKED over 40 hours in a work week
- Granted at 1-1/2 times Leave for each one hour worked beyond 40.
Non-Exempt Employees
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- Performing principal duties
- Performing principal duties or closely
related duties outside of work hours
- Travel time between job sites (PW, Arlington and Fairfax Campuses)
- Employer required training
- Breaks (<20 minutes)
- Pre- and postliminary activities (checking job locations, fueling cars, picking up mail at P.O., putting away tools at the end of the day)
Examples of
Compensable Time
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- Preparatory work related to principal duties
- “Waiting” or “standing by” for work
- “Unauthorized” work performed (with or without Supervisor’s knowledge)
- Employee arrives early to work & begins working
- Meal time if an employee is not “free” from work duties
Examples of
Compensable Time
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UNAUTHORIZED WORK
- Work not requested but “suffered or permitted” is counted as time worked
- Standard is whether the employer knows or has reason to believe the work is being performed
Examples of
Compensable Time
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Second Jobs
If all jobs are hourly (not classified) all hours over 40 per week = overtime
If 1st job is part-time classified, Departments must consult with HR Generalist
FIRST JOB
(FT CLASSIFIED)
SECOND JOB
(HOURLY)
OVERTIME PAYMENT?
EXEMPT
EXEMPT
NO
EXEMPT
NON-EXEMPT
NO
NON-EXEMPT
EXEMPT
YES
NON-EXEMPT
NON-EXEMPT
YES
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- U.S. Department of Labor enforces FLSA
- Burden of proof is on the employer
- Employees can sue their employers for the recovery of back wages & liquidated damages for up to 3 years if violation is found to be willful
- Employer cannot retaliate
against employee for “whistle
blowing”
FLSA Violations
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Potential DOL Penalties
- Unpaid wages (2 - 3 years of back wages)
- Fines ($10,000)
- Imprisonment (6 months)
- Liquidated damages (2x)
- Attorney’s fees and costs
- Individual liability
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2 years back wages
3 years if willful violation
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FLSA and DOL
- Fastest growing area of class litigation is wage and hour claims
- FLSA violations resulted in back wages of $212 mil in 2003 and $170 mil in 2002
- A 21% increase in one year
- DOL assessed $10 mil in civil penalties!