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Objectives
• Fair Labor Standards Act (FLSA) basic requirements
• Update on proposed regulation
• Impact on Mecklenburg County
• Approach for compliance
• Next steps
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Fair Labor Standards Act Basic Requirements
• Coverage
• Minimum wage ($7.25/Hr)
• Age restrictions on employment
• Overtime pay for time worked over 40
• Recordkeeping
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Non‐Exempt (Hourly) vs. Exempt (Salaried) • Non‐exempt (hourly)
o Typically paid hourly
o Eligible for overtime pay
• Exempt (salaried)
o Paid a regular salary
o Not eligible for overtime
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Exemption Tests
• Executive
o Organizational responsibility
o Management of staff
• Administrative
o Level of work performed
o Independent judgment/discretion
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Exemption Tests (Continued)
• Computer Professionals
o
IT Professionals
• Learned Professionals
o
o
Advanced knowledge is required
Doctors, lawyers, accountants
• Creative Professionals
o
o
Invention, imagination, creativity
Actors, musicians, novelists
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Proposed Regulation
• Department of Labor (DOL) issued update July 2015
• Propose to increase to $970 per week ($50,440 annual)
• 40th percentile of earnings adjusted for CPI
• Current salary threshold is $455 per week($23,660/year)
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Impact on Mecklenburg County
• 107 job classifications with part of the salary range
below the new salary level of $50,440
• 410 exempt employees earn below $50,440
• Budgetary impact to adjust salaries
• Budgetary impact in overtime costs
• Other costs: new hire rates, payroll costs
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Approach for Compliance
• Holistic job evaluation process
• Re‐evaluate FLSA designation
• Feedback from department management
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Approach for Compliance (Continued)
• Monitoring status of change
o
o
o
o
o
Department of Labor (DOL)
Society for Human Resource Management (SHRM)
UNC School of Government
The Employers Association
Human Resources Advisory Committee (HRAC)
• Communication with all employee levels
• FLSA training/refresher for managers
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Estimated Budgetary Impact
• $3 MM Estimated Cost
o Approximately $2.3 MM in overtime cost
projections (Non‐Exempt‐Hourly)
o Approximately $700,000 in salary Adjustments
(Exempt‐Salaried)
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Next Steps
• Continue to work with departments
• Communicate with all employees
• Implement finalized changes
o Final regulations due July 2016
o Expected implementation date: Fall 2016
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