Tackling wage and hour issues is one of the most challenging (and potentially costly!) legal issues faced by businesses today. As if the usual compliance issues are not enough to keep businesses on their toes, the Department of Labor’s upcoming overhaul of the overtime regulations will impact almost every business in Southwest Florida. In this presentation, we will discuss some of the nuts and bolts of wage and hour compliance, such as exempt/non-exempt classification, off-the-clock work, overtime, and record-keeping; then we will review the DOL’s now-final overtime regulations. Attendees will learn how the proposed regulations can impact their pay practices, along with key actions to implement now to prepare their businesses for the upcoming changes.

1. WAGE AND HOUR COMPLIANCE:
Is Your Business Ready for the
New Regulations?
Gravity Benefits Symposium
June 10, 2016
Suzanne M. Boy, Esq.
@suzanneboy

2. Wage and hour: Why do we
care so much?

3. Agenda
Wage and hour basics
Exemptions
Common Problems
Record Keeping
Critical Policies
DOL Final Rule
@suzanneboy

4. The Basics: Exempt vs. Non‐Exempt
Non‐Exempt
Must be paid at least minimum wage
Must be paid time‐and‐one‐half for all hours
worked over 40 in a work week
Exempt
If an employee is exempt, he/she is exempt from
overtime and minimum wage requirements
@suzanneboy

5. The Basics: Common Exemptions
To be exempt, must meet two tests:
Duties Test
 Different for each exemption
Salary Basis Test
 Currently $455/week or $23,660/year
 Salary basis does not apply to lawyers, doctors, teachers,
or outside sales
 Computer employees can be paid hourly, at least $27.63
@suzanneboy

6. The Basics: Common Exemptions
Common Exemptions:
Executive
Administrative
Professional
Outside Sales
Computer Professional
Section 7i
@suzanneboy

7. Common Problems
Misclassification
Exempt vs. non‐exempt
Employee vs. contractor
Improper Deductions
Off‐the‐clock work
Pre‐shift/post‐shift
Travel time
Electronic devices
Breaks
Timekeeping

8. @suzanneboy

9. Record Keeping
Poster: Employee Rights Under FLSA
Must keep records for non‐exempt employees
Basic info:
 Name, SS#, Address, Sex, Occupation, DOB (under 19)
Payroll info:
 Workweek, hours worked each day/week, pay rate,
total earnings, OT, deductions, date of payment, pay
period
Keep for at least three years
@suzanneboy

10. Critical Handbook Policies
Payroll/pay period
Make sure you have a clearly defined seven day
period
Overtime
It is okay to require approval, but pay no matter
what!
Discipline if necessary
Salary Basis Policy
Work Schedules/Timekeeping
10@suzanneboy

11. Critical Handbook Policies:
Salary Basis Policy – Part I
It is the Company’s desire to comply with applicable
wage and hour laws and regulations. The improper
pay deductions specified in the Code of Federal
Regulations (§541.602(a)) may not be made from
the pay of employees who are subject to the salary
basis test under the Fair Labor Standards Act. If you
believe that any deduction has been made from your
pay that is inconsistent with your salaried status,
you should immediately contact your supervisor or
human resources.

12. Critical Handbook Policies:
Salary Basis Policy – Part II
Any complaint will be resolved within a reasonable
time given all the facts and circumstances. If an
investigation reveals that you were subjected to
an improper deduction from pay, you will be
reimbursed and the company will take whatever
action it deems necessary to ensure compliance
with the salary basis test in the future.
@suzanneboy

13. Critical Handbook Policies:
Work Schedules/Timekeeping–Part I
Company exercises care in complying with wage and
hour regulations. Cooperation of all employees is
essential. Each non‐exempt employee is responsible
for accurately tracking his/her time. An employee's
time clock reports should correspond with the
employee's prescribed work schedule. If a non‐
exempt employee arrives to work prior to his/her
scheduled start time, or stays after his/her
scheduled end time, the employee shall not perform
any work.

14. Critical Handbook Policies:
Work Schedules/Timekeeping‐Part II
If the employee does perform work during this
time, the employee must clock in. Likewise, if a
non‐exempt employee is required to attend a
meeting or perform any work whatsoever
outside his/her scheduled time, the employee
must clock in so he/she can be properly paid.
Violations of this policy can lead to discipline, up
to and including termination.
@suzanneboy

15. Additional Wage/Hour Policies
Timecard Disclaimer
I certify that this time card accurately reflects my
work time and use of leave, and that I have not
worked any hours during this time period that
are not reported on this time card. I understand
that the accurate recording of working hours is a
serious matter and that those who falsify
information are subject to discipline, up to and
including termination of employment.
@suzanneboy

16. @suzanneboy

18. DOL Final Rule
 Major modification to salary level:
 From $23,660 ($455/week) to $47,476 ($913/week)
 Highly Compensated Employee: from $100,000/year to
$134,004/year
 Salary basis to “automatically” change based on
percentile of earnings for full‐time salaried workers
every three years
 Employers may use non‐discretionary bonuses,
incentive payments, commissions to satisfy up to 10%
of the salary basis
 Effective: December 1, 2016
18@suzanneboy

19. DOL Final Rule
 Non‐discretionary bonuses, incentive
payments, and commissions: how will it work?
 Employer must pay the employee at least 90%
of the minimum salary level each week
($821.70)
 At the end of a quarter, if the total pay including
bonuses, etc. does not equal at least $47,476, the
employer must make up the difference in the
first pay period of the next quarter
19@suzanneboy

20. DOL Final Rule
 Updated salary levels every three years: how
will it work?
 DOL to provide notice at least 150 days before
January 1 effective date
 New levels will be based on 40th percentile of
weekly earnings of full‐time non‐hourly workers
 HCE will be set at 90th percentile
20@suzanneboy

21. DOL Final Rule
 Is the rule really final?
 Protecting Workplace Advancement and
Opportunity Act
 Even if this passes House/Senate, President Obama
will veto
 Litigation
 New Notice of Proposed Rulemaking
21@suzanneboy

22. DOL Final Rule:
Salary Increase or Overtime
 Salary Increase:
 If an employee is close to $47,476, consider
bumping up
 Can reduce incentive pay/bonuses to offset
salary increase
22@suzanneboy

23. DOL Final Rule:
Salary Increase or Overtime
 Overtime:
 (Weekly salary % 40) x 1.5 = OT rate
 OT rate x expected hours = pay increase
 Cost‐Neutral Option:
 Weekly salary % [40 + (OT hours x 1.5)]
 Start tracking hours now, so you are ready by
December 1
23@suzanneboy

24. Fluctuating Work Week: Another Option?
 FWW permits employers to pay non‐exempt
employees fixed salary, even if employee’s
hours fluctuate from week‐to‐week
 OT is paid at an additional one‐half the
regular rate of pay
 Works best for part‐time employees – can be
complicated for a full‐time employees

25. @suzanneboy

26. DOL Final Rule: What About Part Time?
 Definitely an option, if hiring additional part
timers keeps the formerly exempt
employee(s) under 40 hours/week
 Be mindful of employee counts
26@suzanneboy

27. Special Consideration
for Non‐Profits
 FLSA Coverage
 Volunteers
27@suzanneboy

28. What Should You Do NOW?
 Start planning now for impact on bottom line
 Carefully review all classification decisions
 Now is a great time to reclassify based on duties test
OR salary basis test
 Analyze potential changes to employee status/pay
 Communicate the changes
 Train reclassified employees and supervisors
 Consider wage/hour audit
 Remember December 1 deadline!
28@suzanneboy

29. @suzanneboy

30. Thank you!
Suzanne M. Boy, Esq.
Henderson, Franklin, Starnes & Holt, P.A.
suzanne.boy@henlaw.com
239.344.1403
www.swflemploymentlawblog.com
@suzanneboy