UNITED STATES DEPARTMENT OF LABOR WAGE AND HOUR …

UNITED STATES DEPARTMENT OF LABOR WAGE AND HOUR DIVISION

New Overtime Rule

Webinar Questions & Answers: June 7, 2016

Q. Will the non-profit FLSA overtime webinar be available at a later date via recording? A. Yes, this webinar will be available for viewing at a later date.

Q. I have seen in articles that say that exemptions (like the less than $500,000 in commerce rule) will not apply in 11 states including Washington DC. I am in New York. Is anyone researching how state and federal rules interact especially in terms of this $500K exemption but also overall? Thank you for your help! A. The Fair Labor Standards Act (FLSA) is the federal wage and hour law that applies nationwide. Its coverage principles (including the $500,000 annual dollar volume threshold to establish enterprise coverage) and the criteria for the "white collar" overtime exemptions are the same in all 50 states. However, some states or localities may have their own wage and hour laws that are more protective of workers.

Q. A non-profit provides services, among them building or rehabbing low-income housing for ownership, this results in cumulative sales over $500,000 but each sale itself does not result in income because the costs of housing outweigh the sale. As the non-profit is selling homes for less than cost, we do not view this as competitive with any other business and thus not a covered entity but would like your opinion. A. We cannot determine whether your non-profit organization is covered under the FLSA based on the information you provided. We encourage you to contact the nearest Wage and Hour Division district office. You can locate the nearest office by calling the Division's toll-free help line at (866) 4US-WAGE ((866) 487-9243) between 8 a.m. and 5 p.m. in your local time zone, or log onto the Division's Website at for a nationwide listing of Wage and Hour Division district and area offices.

Q. Will there be a period of non-enforcement for non-profits? A. The Final Rule's effective date is the same for all employers, profit and non-profit alike (December 1, 2016). However, the Department of Labor has announced a time-limited non-enforcement policy for providers of Medicaid-funded services for individuals with intellectual or developmental disabilities in residential homes and facilities with 15 or fewer beds. More information about that non-enforcement policy is available here: .

Q. Are teachers exempt from this rule? And does this rule cover ALL Exempt employees making between $23,000+ - $47,000+ a year? A. The salary level and salary basis requirements do not apply to bona fide teachers, therefore bona fide teachers will not be affected by the new salary level. A bona fide teacher has a primary duty of teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge, and is employed and engaged in

This presentation, including the Question and Answer portion presented in this email, is intended as general information only and does not carry the force of legal opinion. The Department of Labor (DOL) is providing this information as a public service. This information and related materials are presented to give the public access to information on DOL programs. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the DOL.

UNITED STATES DEPARTMENT OF LABOR WAGE AND HOUR DIVISION

this activity as a teacher in an educational establishment. For further information, see 29 CFR 541.204(b), .303. As to your second question, generally, bona fide Executive, Administrative and/or Professional employees must meet the required salary basis, salary level and job duties test found in 29 CFR 541.100 - .400 to qualify for exemption.

Q. For the Administrative exemption, I've seen a carve-out for a "special salary level for certain academic administrative personnel." Which job titles fit under this description? And--is the special salary level equal to a first-year teacher's salary? Thank you for your response. A. Under the FLSA, a job title alone is insufficient to establish the exempt status of an employee. The exempt or nonexempt status of any particular employee must be determined on the basis of whether the employee's salary and duties meet the requirements of the regulations - see 29 C.F.R. 541.2 The administrative personnel that help run education institutions and interact with students outside the classroom, such as department heads, academic counselors and advisors, intervention specialists and others with similar responsibilities are subject to a special salary. These employees meet the salary requirements for exemption if they are paid at least as much as the entrance salary for teachers at their institution. For additional information, please review our Higher Education Guidance Document: whd/overtime/final2016.

Q. Hi, I would like to know if passive income (like investment interest or investment returns) is considered to count towards the $500k enterprise threshold. Also, I would like to know if we hold a special event auction or raffle once or twice each year, is that income considered to count towards the $500k threshold? Thanks so much. A. Income that a non-profit organization uses in furtherance of charitable activities is not factored into the $500,000 annual dollar volume threshold to establish enterprise coverage. For further assistance regarding coverage principles under the Fair Labor Standard Act, please contact your nearest WHD district office, available at: .

Q. Herzing University is both a higher education institution and non-profit. Is this webinar appropriate to watch or should I wait for the Higher Ed version on 6/13? A. It depends. This webinar has more information relative to the non-profit sector, whereas the higher education webinar will have more information relative to that industry. The section discussing the New Final Rule will be the only information duplicated.

Q. Can you please address what hours to include in an overtime calculation for an employee who takes kids to camp. The camp is 5 days long and the employee sleeps at the camp. A. This Final Rule has not changed what constitutes "hours worked" under the Fair Labor Standards Act. The regulations defining what kinds of activities constitute "hours worked" are provided at 29 CFR part 785, and described generally in Fact Sheet # 22, available here: .

This presentation, including the Question and Answer portion presented in this email, is intended as general information only and does not carry the force of legal opinion. The Department of Labor (DOL) is providing this information as a public service. This information and related materials are presented to give the public access to information on DOL programs. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the DOL.

UNITED STATES DEPARTMENT OF LABOR WAGE AND HOUR DIVISION

Q. For any person executive or no, they must be salaried in order to be exempt even if they fit all other criteria they must be salary not hourly correct? A. Generally, yes. However, outside sales employees and certain professional occupations (doctors, lawyers, and teachers) are not subject to the salary level and salary basis requirements. For more information about the salary basis requirement, refer to Fact Sheet # 17G, available at: .

Q. How does an employer handle an employee who works part time doing business enterprise and part time charitable enterprise? Is overtime only required when an employee passes 40 hours of enterprise work in a week? A. There are two ways that an individual employee may be covered under the Fair Labor Standards Act (FLSA) and entitled to its protections: individual coverage and enterprise coverage. A nonprofit organization is not considered a covered enterprise under the FLSA unless it engages in ordinary commercial activities that result in sales made or business done that meets the $500,000 threshold. If an nonprofit meets this threshold, its employees are covered by the FLSA and entitled to overtime for work performed over 40 hours a week regardless of how the employee spends their time. Even if a nonprofit organization is not covered on an enterprise basis as described above, it may have individual employees who are covered individually and therefore are entitled to the FLSA's protections. An employee who engages in interstate commerce or in the production of goods for interstate commerce or in the protection of goods for interstate commerce is covered by the FLSA and is entitled to overtime pay for time worked over 40 hours in a week.

Q. Are non-profits permitted to utilize comp time for salaried staff, instead of paying overtime? A. No, non-profits are not permitted to utilize compensatory time for salaried employees instead of paying overtime. Only public agencies, such as state and local governments, are permitted to use compensatory time instead of paying overtime.

Q. Are teachers working under 501c3 (an Educational Service Provider Organization) covered under the new overtime act? A. The salary level and salary basis requirements do not apply to bona fide teachers, therefore bona fide teachers will not be affected by the new salary level. A bona fide teacher has a primary duty of teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge, and is employed and engaged in this activity as a teacher in an educational establishment. An "educational establishment" means an elementary or secondary system, an institution of higher education or other educational institution. For further information, see 29 CFR 541.204(b), .303.

Q. Are teachers exempt? A. A teacher is exempt if their primary duty is teaching, tutoring, instructing, or lecturing in the activity of imparting knowledge, and they are employed and engaged in this activity as a teacher in an educational establishment. An "educational establishment" means an elementary or secondary system, an institution of higher education or other educational institution. For further information, see 29 CFR

This presentation, including the Question and Answer portion presented in this email, is intended as general information only and does not carry the force of legal opinion. The Department of Labor (DOL) is providing this information as a public service. This information and related materials are presented to give the public access to information on DOL programs. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the DOL.

UNITED STATES DEPARTMENT OF LABOR WAGE AND HOUR DIVISION

541.204(b), .303. The salary level and salary basis requirements do not apply to bona fide teachers, therefore bona fide teachers will not be affected by the new salary level.

Q. So we have a Special events position that makes donation requests to sell at our annual basket auction fundraiser. If any of those requests will be made or received from across state lines she would be individually covered even if we don't earn $500,000 in sales revenue as an agency? She would be covered because of the Individual test? A. Generally, employees who make phone calls across state lines are individually covered under the Fair Labor Standard Act (FLSA). For further assistance with coverage principles under the FLSA, please refer to Fact Sheet # 14 at or contact your nearest WHD district office at .

Q. I have three "Exempt" employees in my domestic violence shelter. I understand domestic violence shelters are not a covered enterprise but all my advocates answer the crisis call line which means it could be a call from a victim from out of state or from the National DV hotline center. We also put clients on a bus to other states to relocate and forward their mail to them. Is this considered interstate commerce and are these individual employees covered by the FLSA? A. There are two ways that an individual employee may be covered under the Fair Labor Standards Act (FLSA) and entitled to its protections: individual coverage and enterprise coverage. A nonprofit organization is not considered a covered enterprise under the FLSA unless it engages in ordinary commercial activities that result in sales made or business done that meets the $500,000 threshold. If an nonprofit meets this threshold, including a domestic violence shelter, its employees are covered by the FLSA. Even if a nonprofit organization is not covered on an enterprise basis as described above, it may have individual employees who are covered individually and therefore are entitled to the FLSA's protections. An employee who engages in interstate commerce or in the production of goods for interstate commerce or in the protection of goods for interstate commerce is covered by the FLSA. Examples of such activities include making out-of-state phone calls, receiving/sending interstate mail or electronic communications, and ordering or receiving goods from an out-of-state supplier. The Department, however, will not assert that an employee, who on an isolated occasions spends an insubstantial amount of time performing such work, is individually covered by the FLSA.

Q. Can you please provide a definition of an HCE for non-profits? A. An HCE is a Highly Compensated Employee as defined in 29 CFR 541.601. An HCE must currently meet the following criteria: 1) be paid an annual compensation level of at least $100,000. ($134,004 effective 12/1/16, under the new rule ); 2) be paid a weekly salary of no less than $455 per week ($913 effective 12/1/16, under the new rule) 3) pass a minimal duties test (perform any one or more of the exempt duties of an Executive, Administrative, or Professional (EAP) exempt employee as defined in 29 CFR 541.100 - .300) For more information, see Fact Sheet #17H,

This presentation, including the Question and Answer portion presented in this email, is intended as general information only and does not carry the force of legal opinion. The Department of Labor (DOL) is providing this information as a public service. This information and related materials are presented to give the public access to information on DOL programs. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the DOL.

UNITED STATES DEPARTMENT OF LABOR WAGE AND HOUR DIVISION

Q. Can you determine what a workweek IS---Sunday through Saturday, for example, in employee policies/handbook? Otherwise, working one extra shift would affect the week before and the week after, if it can be ANY 7 consecutive 24 hour periods. Or I am missing something? A. An employee's workweek is a fixed and regularly recurring period of 168 hours - seven consecutive 24-hour periods. It need not coincide with the calendar week but may begin on any day and at any hour of the day. Once the beginning time of an employee's workweek is established, it remains fixed regardless of the schedule of hours worked by him. The beginning of the workweek may be changed if the change is intended to be permanent and is not designed to evade the overtime requirements of the Act. See 29 CFR 778.105.

Q. Are domestic violence shelters and rape crisis centers exempt from this new rule? A. It depends. There are two ways that an individual employee may be covered under the Fair Labor Standards Act (FLSA) and entitled to its protections: individual coverage and enterprise coverage. A nonprofit organization is not considered a covered enterprise under the FLSA unless it engages in ordinary commercial activities that result in sales made or business done that meets the $500,000 threshold. If an nonprofit meets this threshold, its employees are covered by the FLSA. Even if a nonprofit organization is not covered on an enterprise basis as described above, it may have individual employees who are covered individually and therefore are entitled to the FLSA's protections. An employee who engages in interstate commerce or in the production of goods for interstate commerce or in the protection of goods for interstate commerce is covered by the FLSA. The Department of Labor's final overtime rule updates the salary level required for the executive, administrative, and professional ("white collar") exemption in the FLSA. The final rule updates the salary threshold under which most white collar workers are entitled to overtime by raising the salary threshold from $455 a week ($23,660 for a full-year worker) to $913 a week ($47,476 for a full-year worker) effective December 1, 2016.

Q. Can you please let us know where exactly to find the article and duties listing? A. For a concise overview of all the "white collar" exemptions and their requisite job duty requirements, please refer to Fact Sheet # 17A, available at .

Q. So if we have a new hire who starts mid year, they will not have the opportunity to make $47,476. So, as long as we pay a minimum salary of $913/week beginning Dec. 1, 2016, we will be in compliance with this person remaining an exempt employee (considering they meet the duties test as well)? Thanks. A. Yes, the salary requirement is $913 a week.

Q. Can employer pay employee a quarterly bonus for the first quarter, and overtime pay for the second quarter? I.e. first quarter is exempt employees, but the second quarter is non-exempt employees. A. Under the Final Rule an employer can use a nondiscretionary bonus paid quarterly or more frequently to satisfy up to 10% of the standard salary level. If the sum of the salary paid plus nondiscretionary

This presentation, including the Question and Answer portion presented in this email, is intended as general information only and does not carry the force of legal opinion. The Department of Labor (DOL) is providing this information as a public service. This information and related materials are presented to give the public access to information on DOL programs. The Federal Register and the Code of Federal Regulations remain the official source for regulatory information published by the DOL.

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