The Fair Labor Standards Act (FLSA)

1. The Fair Labor Standards Act (FLSA) Employment Services 303-492-6475

2. Training Outline • What is FLSA? • Who does FLSA apply to? • How is overtime eligibility determined? • When can a position be exempt from overtime? • When, where and how is overtime calculated and paid? • What records do I need? • Who does what? • Will I remember all this?

3. What is FLSA? Fair Labor Standards Act (FLSA) est.1938 governs many areas. Those areas most important to us may be: • Minimum wage • Colorado: $7.28 per hour effective 1/1/09 • Federal: $7.25 per hour effective 7/24/09 • Exemption Criteria • Overtime (OTM) Pay • Record keeping requirements

4. Who does FLSA apply to? • Employment relationship between an “employer” and an “employee”, including: • Classified employees • Exempt-Professional employees • Faculty and Research employees • Student employees • Temporary employees • All employees are “covered”, but some may be exempt from OTM or minimum wage requirements

5. Definitions FLSA: • Exempt = NOT eligible for overtime • Not entitled to additional compensation for hours worked over 40 in a work week • Non-Exempt = ELIGIBLE for overtime • MUST be compensated (in salary or time off) at the rate of time-and-a-half for all hours worked over 40 in a work week Colorado State Personnel System: • Exempt = Not classified, i.e., exempt from the state personnel system • (exempt-professional employees)

6. How is overtime eligibility determined? • Classified Staff • Employment Services designates overtime status of each position. Usually will be documented on classification decision notice. • Officer & Exempt Professional Staff • Overtime status reviewed and determined by Employment Services at time position is created based on duties of job • Faculty • Typically exempt from OT • Student Employees • Typically eligible for OT

7. When can a position be exempt from overtime? • Salary Basis • must be paid on a salaried basis, not hourly (except for teachers, doctors, lawyers, and computer professionals currently paid at least $27.63/hr) • Minimum Salary Threshold • Currently must be paid a minimum of $455 per week or $23,660 per year (except for teachers, doctors, and lawyers) • Job Duties Test • must also be assigned job responsibilities that fall into one of the categories for exemption

8. Exemption Categories • Executive • Administrative – regular and academic • Professional • Learned Professional – doctors, lawyers, teachers • Creative Professional – artists, musicians, creative writers • Computer Employee • Outside Salesperson • Highly Compensated • Employee makes more than $100,000 per year and meets other exemption criteria

9. Exempt Positions • NOT eligible for OT due to salary and level of responsibilities • May be required to complete time records and must track use of leave • Appointing authority can schedule work hours • Full-time public employees expected to work minimum 40 hours a week • Administrative leave or incentive awards may be used to compensate extraordinary efforts but not tied to hours worked

10. When is overtime paid? • Overtime is paid when more than 40 hours are worked in a work week • Standard CU Workweek = • Sunday 12:01 a.m. through Saturday midnight

11. How is overtime compensated? • 1 ½ times the regular rate of pay for all hours worked over 40 in a work week • Paid as salary or compensatory time off in lieu of cash if agreement has been signed

12. Additional Comp Time info • Comp Time Agreement • Should be condition of hire in offer letter or overtime policy • Comp time is NOT leave, but a form of compensation • Must be scheduled as soon as practical • Comp time balance is paid out upon transfer or termination or when balance exceeds 240 hours

13. Where is overtime paid? • Overtime in HRMS Time Collection: • Enter total number of hours worked in excess of 40 hrs/wk using appropriate earnings code: • OTM – Overtime • SOT – Student Overtime • HRMS will calculate the 1 ½ rate • Example: • Larry works 4 hrs overtime • PPL enters 4 hrs OTM or SOT in Time Collection • Larry will receive 6 hrs extra pay, which is equivalent to 4 hours at 1 ½ times his hourly rate

14. Where is overtime paid? • Comp Time: • Comp time earned and taken is typically tracked outside of HRMS, possibly on the employee’s work record • Dept work records are the official record for comp time balances • Comp time taken may be recorded in HRMS: • Use earnings code CMP

15. How is it calculated? • Hours worked for purposes of OT do not include: • holidays, vacation, sick or admin leave (except for essential services positions), or comp time taken

16. How is it calculated? • Work hours can not be averaged across more than one week. For example: • Work hours can not be averaged at the end of the month • Hours worked in excess of the regular schedule in one week cannot be used for time off in any other week

17. How is it calculated? • Overtime is calculated on a weekly basis • Overtime does not accrue when an employee works beyond his/her regular daily schedule

18. Overtime Examples Week 1 40 hours worked. No overtime accrued for this work week. Week 2 44 hours worked. 4 hours at 1 ½ rate = 6 hours extra pay or comp time. Week 3 36 hours worked. No overtime accrued for this work week for non-essential services employees.

19. Essential Services and Overtime • Essential positions support services directly responsible for health, safety, and welfare of patients, residents, or students • Typically designated by Vice Chancellor • Department should note on special requirements page of PDQ • Per State Personnel Rules, paid leave counts as work time when calculating overtime for essential employees

20. Can Overtime be waived? NO! • Once overtime has been worked (whether approved or not), it must be compensated • Unauthorized overtime may be cause for corrective action • Communication is key • Departments should have procedures in place for requesting overtime & approval requirements • Preferred method is to use comp time in lieu of cash

21. What records do I need? • Time/work records shall be kept for both exempt and non-exempt employees • Both employee and supervisor must verify and sign work records • Departments may select work records they wish to use (see PBS website for suggested forms) • Records should be kept for minimum of 5 years (7 years or more for positions funded from grants)

22. Who does what? HR’s Role • Designate overtime status for positions • Advise departments on developing overtime/comp time policies • Assist with questions from employers and employees regarding overtime compensation

23. Who does what? Department’s Responsibilities • Know who is eligible for overtime • Ensure employees know and understand OT policy and expectations • Do not allow employees to work extra hours without appropriate compensation • Ensure both supervisor and employee agree and sign work record each month • Ensure hours worked are documented and accounted for on a work record/time sheet

24. Will I ever remember all this? Additional Resources • Employment Services • 303-492-6475 (main office) • http://hr.colorado.edu/es/Pages/overtimeflsa.aspx • PBS Procedures Guide: • https://www.cusys.edu/pbs/proceduresguide/ • Employee Work Record forms: • http://www.cu.edu/pbs/forms/ • Record Retention Checklist: • https://www.cu.edu/pbs/payadmin/policies/pay-records.html