Risk Management Initiative:

1. Risk Management Initiative: Wage and Hour Issues for Employees and Supervisors Module Office of the Vice President for Ethics and Compliance Office of the Vice President for Human Resources

2. Learning Objectives

3. Fair Labor Standards Act The Fair Labor Standards Act (FLSA) is a federal law which establishes • Minimum wage • Overtime pay • Child labor provisions • Recordkeeping requirements • Equal pay standards

4. Non-Exempt vs. Exempt Employees • Non-Exempt • Paid on a hourly basis • Paid bi-weekly • Paid for overtime based on weekly hours worked • time and a half for hours in excess of 40 per week • Record time • Must record all hours worked • Must record unpaid break periods such as lunch • Exempt • Paid on a salaried basis • At a rate of not less than $455 per week • Excluded from overtime pay • Daily hours are not recorded • Record time on an “exception” basis • Only record paid time off

5. Criteria for Exempt Work • Exercise of discretion and judgment • Have authority to • formulate and/or interpret University policies • waive or deviate from established policies and procedures • commit the University in matters which have significant financial impact • negotiate and bind the University on significant matters • hire or fire other employees • Involved in planning long- or short-term business objectives

6. Discretion and Independent Judgment • Discretion and independent judgment does notinclude: • Applying well-established techniques, procedures or specific standards described in manuals or other sources • Clerical or secretarial work • Recording or tabulating data • Performing mechanical, repetitive, recurrent or routine work

7. Purdue’s Overtime Policy • Overtime pay is calculated at 1.5 times the regular rate for every hour worked in excess of 40 during the work week • Payment of overtime cannot be waived by employee or employer • Hours cannot be averaged over two workweeks • Normally scheduled holidays, vacation and sick leave are included to determine overtime hours

8. Purdue’s Overtime Policy – Maximum Overtime • Maximum Overtime • Scheduled in a 24-hour period = 8 hours • Worked in any work week =20 hours NOTE: Overtime worked by the employee, whether it is authorized or unauthorized by the supervisor, must be counted and compensated as “worked overtime”

9. Hours of Work Workweek • Monday through Sunday • Work Schedule • Can be changed to support a business need • Flexible Work Schedule • Request to flex must come from the employee • Must be mutually agreeable • Compensatory Time • Purdue policy does not allow the use of compensatory time • Hours cannot be carried to another week *Exceptions to the University pay policies must have Human Resources approval

10. Hours Worked – On Call Pay • Restricted use of time while “on call” requires compensation • Unrestricted time while “on call” means employees are not considered in pay status • Unrestricted means the employee is free to do normal daily activities • When not in “on call” status, but responding to a phone call or email, employees will be paid for the length of the phone call or email at the overtime rate

11. Hours Worked – Callback Pay • Callback is when an employee is required to return to the workplace outside of their normal work schedule • Not provided when: • extra work is scheduled in advance • employees are asked to extend their regular work shifts • Employees must receive a premium equivalent to two hours of regular pay and be compensated for all hours worked • All time worked is included to determine overtime eligibility

12. Hours Worked – Training, Lectures & Meetings • Employees are not paid if all of the following criteria are met: • Attendance is • outside of regular work hours • voluntary • Information is not directly job related • Employee does not do any productive work during the session

13. Nonexempt Employee Travel • General Rules • An employee’s commute is not compensable • Work related travel during the employee’s normal working time is paid time • Travel outside those normal working hours is not paid • Work performed while driving will be paid if not de minimis

14. Nonexempt Employee Travel Examples • Carrying a heavy briefcase of files on a weekly basis during the commute is de minimis, given that the employee is still free to do other things during the commute . However, when transporting specialized or heavy equipment is a principal activity and a regular part of the employee’s daily travel, such time may be compensable. • Talking occasionally on a cell phone on work-related matters during the commute may be de minimis, but an extended period of time (i.e. 10 minutes or more) may be paid time.

15. Travel between worksites during the same work day is compensable Out-of-town travel, when an employee returns home the same day, is compensable Out-of town travel overnight: Compensable for the driver and passenger during regular work hours Compensable for the driver outside of regular work hours Not compensable for the passenger outside of regular work hours unless the employee performs work while riding Nonexempt Employee Travel - continued

16. Miscellaneous Pay Practices • Shift Differential • If an employee works more than 4 hours between 4pm and 8am they are paid an additional .45 cents/hour • Holiday Pay • If an employee is required to work a holiday they are paid a premium rate of 1 ½ times their regular rate of pay

17. Summary • FLSA is a Federal Law that establishes minimum wage, overtime, child labor provisions, record keeping requirements, and equal pay standards • The law discusses two classifications of employees • Exemptemployees are exempt from the overtime provisions of FLSA • Non-exemptemployees are subject to the overtime provisions of FLSA • Purdue’s overtime policy corresponds to FLSA with an overtime rate of 1.5 times the normal rate for all hours worked in excess of 40 in a workweek • Defines a workweek beginning on Monday and ending on Sunday • For overtime purposes, it’s important to detail time worked • Flexible schedules, on-call status, call back status, training, meetings or lectures and travel time can impact time worked • Some of the more commonly occurring premium pay situations include: • Shift differential of .45 cents per hour for non-exempt employees who work more than 4 hours between 4pm and 8am • Holiday pay at a rate of 1.5 times their regular rate of pay for each hour they work on a holiday.

18. Conclusion • For questions about this training please contact vpeceducation@purdue.edu. • Please be sure to complete the certification quiz in WebCert. • Thank you!