Thank you for your interest in the, “DOL Doubles Overtime Pay Requirements” Webinar presented by Andy Volin and Erica Herrera. Below are links to the webinar recording and presentation materials.
Answers to Your Questions
Below are answers to all of the questions we received during the webinar. If you have any additional questions please feel free to contact the speakers directly.
Tracking Hours
If an employee is self-reporting daily/weekly hours including signing off as “accurate” – is the employer liable if the employee is not reporting time worked (such as checking email at home)?
It depends. Under the statute, the term “employ” includes “to suffer or permit to work.” 29 U.S.C. § 203(g). This means that if an employer requires or allows an employee to perform work, the time spent must be accounted for. Employers must provide training on accurately recording compensable time, including time spent responding to emails, phone calls, etc. outside of normal business hours and off premises.
How are hours tracked if a non-exempt employee travels to a company conference within the work week?
Required attendance at a job-related conference is compensable time that must be tracked. Travel time to and from the conference during normal working hours is also compensable time that must be tracked. See 29 C.F.R. §§ 785.33-41.
PTO and Salary Deductions
Can you reduce PTO for exempt employees if they miss less than a day and not jeopardize their exempt status? As long as I pay them for the full day?
Yes. PTO is a benefit and is not required under the FLSA. PTO may be reduced for partial or full day absences without jeopardizing exempt status if the employee’s weekly salary is still paid.
If an employer has a PTO/Vacation policy and it states if a salaried employee misses less than a full day, can the employer have them use their PTO/vacation for time missed? What’s the minimum an employer is safe to require them to use?
See answer above. Note that PTO deductions are distinct from salary deductions. Separate rules apply to salary deductions for exempt employees. See 29 C.F.R. § 541.602.
Regarding the salary deductions for PTO, is a salary reduction for a full day off allowed if the employee does not have any PTO balance to take off?
It depends. Pay deductions are allowed when an exempt employee is absent from work for one or more full days for personal reasons, other than sickness or disability. If the absence is due to sickness or disability, deductions may be made in accordance with the employee’s compensation plan. See 29 C.F.R. § 541.602.
Our company requires salaried employees to work a minimum of 4 hours per day. If they don’t they lose a day’s pay. Is this legal?
It depends. If the employee is treated as exempt, then the full salary must be paid. Pay deductions are only allowed when the employee is absent from work for one or more full days for personal reasons. (Absences for sickness or disability are treated differently as explained in the answer above.) See 29 C.F.R. § 541.602. Salaried non-exempt employees must be paid at least the minimum wage per hour plus overtime for hours worked over 40 in a week. See 29 U.S.C. §§ 206, 207.
Bonuses
What about bonuses? I read that non-discretionary bonuses can be used to meet the salary test – any more info on this?
The new regulations allow non-discretionary bonuses and incentive payments tied to productivity and profitability to satisfy up to 10 percent of the standard salary level. Bonuses credited toward the standard salary level must be paid on a quarterly or more frequent basis. A quarterly “catch-up” payment is permitted if bonuses fall short of satisfying the minimum. See 29 C.F.R. § 541.602 (new version).
Can bonuses be considered part of the salary? What if the bonus is not a set dollar amount and can fluctuate?
See answer above. Bonus amounts can fluctuate but must be pre-announced and based on a pre-determined formula to be considered non-discretionary. See 29 C.F.R. § 778.211.
Teacher Related
For the teacher exemption, to expand, if there are employees with a different title other than teacher, but still teach students/classes, do they fall under the teacher exemption and would fall under the exclusion?
Exempt status does not depend on job title alone. To qualify as a “teacher” under the regulations, an employee’s primary duty must be teaching, tutoring, instructing or lecturing in an educational institution. See 29 C.F.R. § 541.303.
Question: Would a Golf Pro/Instructor count as a creative professional for the terms of the duties test?
Follow Up: Teachers are not subject to the salary level test, would a Golf/Tennis instructor count as a teacher for exemption purposes?
An athletic trainer would likely not qualify under the creative professionals exemption, but may qualify under the learned professionals exemption if the trainer completed four academic years of pre-professional and professional study and obtained proper certifications. See 29 C.F.R. § 541.301. An athletic trainer may also qualify as an exempt teacher if the trainer’s primary duty is instructing students in an educational institution. See 29 C.F.R. § 541.303.
Miscellaneous
Can we have exempt and non-exempt employees with the same job title and duties, but due to job experience, which impacts rate of pay, one employee will not fall within the “exempt” category now?
Yes. Just because two employees have the same job title does not mean you have to treat them both the same for exemption purposes. In addition to the salary basis and duties tests, an employee must meet the minimum salary level to qualify as exempt, unless the position is not subject to the salary level test (e.g., professionals such as teachers, doctors, and lawyers and outside sales employees).
We have a small company- making about $200K revenue per year- does that mean I do not have to comply at this point?
No. Revenue is one test for coverage, but there are others. For example, even if your annual gross volume of sales is below the $500,000 threshold, employees are still covered under the FLSA if their work regularly involves them in interstate commerce. Employees of certain entities are also covered regardless of revenue (e.g., hospitals, schools, and government agencies). See 29 U.S.C. §§ 203, 206, 207.
We have hourly employees who work in the US and in Africa or other countries. Are we subject to FLSA regs when working in other countries? Can we pay them a stipend instead?
The FLSA’s minimum wage and overtime provisions do not apply to employees whose services during the workweek are performed in a workplace within a foreign country. See 29 U.S.C. § 213(f).
Do you see a need to review position descriptions if they are currently classified as exempt and already meet the new salary requirement?
Yes. There is no change to the various duties tests under the new regulations, and so no change for employees who already meet the new salary requirements. But this is a good opportunity for employers to nevertheless review their job descriptions to make sure they meet the duties tests for exemption.
Does the computer related employee exemption include help-desk or tech support personnel who might be responsible for “on-call” duty?
No. The computer employee’s exemption applies to employees whose primary duty is computer systems analysis or design, or a combination of analysis and design. See 29 C.F.R. § 541.400. But certain help desk or tech support personnel may qualify for exempt status under the executive, administrative, or professional exemptions. See 29 C.F.R. § 541 Subparts B-D.
Does this law apply to field superintendents in the construction industry?
It depends, in part, on what the individual in that position actually does. Overtime exempt status depends on the salary basis, salary level, and duties tests. Assuming salary requirements are met, construction project superintendents may qualify as exempt under the executive or learned professional exemptions based on management duties and advanced knowledge requirements. See 29 C.F.R. § 541 Subparts B, D.
In reviewing jobs for the new changes to FSLA, what if you discover a position that should have been nonexempt all along that was classified as exempt? Can you use 12/1/16 as the effective date of changing the job to nonexempt?
This is a complex issue that you should discuss with legal counsel.