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HR. Payroll. Benefits.
Do I Have to Pay My Employees for That?Common and Not-So Common
Workplace Scenarios
Today’s Presenters
Richard Allaway, MBA
Richard is General Manager and
VP of ADP’s Specialty Products
Group. His tenure at ADP spans
11 years across several business
units and functions.
Renee is a certified HR Specialist
with over 10 years of HR
experience in the small business
arena.
Renee Maher, SPHR
This information is the property of ADP, LLC (ADP). It may not be distributed,
reproduced, modified, sold or used without the written permission of ADP.
The information is provided “as is” without any expressed or implied warranty, is
based on generally accepted HR practices and is advisory in nature.
This content provides a high level overview and practical information concerning
the subject matter covered and is provided with the understanding that neither the
publisher nor the writers are rendering legal advice or other professional services.
Employers are encouraged to consult with their in-house legal counsel or with an
experienced employment law attorney for legal advice regarding specific facts
concerning the organization’s compliance with applicable legislation.
Welcome to the Webcast
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 3
Logistics and Resources
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 4
Fair Labor Standards Act (FLSA) Overview
Exempt vs. Non-exempt Classifications
Independent Contractor vs. Employee
Workplace Scenarios
Timekeeping Best Practices
Agenda
5 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Fair Labor Standards
Act (FLSA) Overview
PART ONE
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 6
What is the Fair Labor Standards Act (FLSA)?
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 7
Governs minimum wage, overtime
and other wage and hour issues
State minimum wage rates: http://www.dol.gov/whd/minwage/america.htm
Nearly every business is covered by the FLSA.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 8
Businesses that gross $500,000 or more
Hospitals, schools, and public agencies
Employees engaged in interstate commerce
In 2013, the DOL collected more than $130 million in back
overtime wages and $38 million in minimum wage violations
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 9
Source: www.dol.gov/whd/statistics
Worker Classifications
PART TWO
10 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Non-exempt Employees:
• Paid for all hours worked
• Paid overtime
• Typically paid on hourly basis
Exempt Employees:
• Paid a set salary each week
• Not entitled to overtime
• Must meet specific criteria
Exempt vs. Non-exempt Employees
11 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
12
Classifying Exempt Employees
Administrative
Exemption
Executive Exemption Professional Exemption
• “Learned Professional”
• “Creative Professional”
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
13
Classifying Exempt Employees (Cont’d)
Computer Employee
Exemption
Outside Sales Exemption Highly Compensated
Employees
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Proposed regulations expected in 2015: revisions to “White
Collar” exemptions and increases in salary thresholds.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 14
Self-employed individuals who
offer their services to the general
public under terms specified in a
contract
What is an Independent Contractor?
15
Factors to consider:
Employer control
Relationship permanency
Type of work performed
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
“”
See IRS website for more
information on Common Law test
Workplace Scenarios
PART THREE
16 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 17
Independent Contractors vs. Employees
A worker is presumed to be an
employee unless he or she
satisfies certain independent
contractor requirements.
Check your state and federal law to
apply appropriate tests.
18
Scenario: Independent Contractor or Employee?
Work arrangement is indefinite
Paid a set salary each week
Reports to the office daily
Uses the company's computers
and attends meetings
Is Joe an Independent
Contractor or an Employee?
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 19
Behavioral Control
• Reports to the office daily
• Uses company computers
• Attends company meetings
Financial Control
• Paid a set salary each week
• Provided a computer and workspace
Type of Relationship
• Working for firm indefinitely
• Job is a key aspect of the business
Solution: Independent Contractor or Employee?
Time worked in excess of 40
hours in a workweek. Paid at a
rate of 1.5x the regular rate.
Certain state laws require overtime
under other circumstances.
Overtime
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 20
Nick is a non-exempt employee
Paid a weekly salary of $400
Normally works 40 hours per week
Last week, he worked 43 hours
How should Chip calculate Nick’s
overtime payment?
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 21
Scenario: Overtime for Salaried Non-Exempt
Step 1: Calculate regular rate of pay
$400.00 weekly salary ÷ 40 hours = $10.00 per hour
Step 2: Calculate overtime premium pay
$10.00 regular rate of pay x .5 x 3 overtime hours = $15.00
Step 3: Calculate total compensation for week
$400 + (3 overtime hours x $15.00 overtime pay) = $445.00
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 22
Solution: Overtime for Salaried Non-Exempt
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 23
Do you have to pay employees
for time worked outside of the
office?
How can you account for that time?
What if it wasn’t authorized?
Off-the-Clock Work
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 24
Scenario: After Hours Work
Employees are replying to work
emails after hours
Does Joan have to pay the
employees for the time spent
replying to emails?
Non-exempt employees must be paid for all time worked (both during and after their
scheduled shift)
Joan can:
• Establish a clear policy on after hours work
• Train supervisors and employees on policy
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 25
Solution: After Hours Work
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 26
Scenario: Early Clock-Ins
Company policy prohibits clocking in
early
Employee violated this policy by
clocking in a half hour early
Can Holly refuse to pay the
employee for the time before the
start of his shift?
If the employee performed work during this time, he
must be paid
Holly can:
• Establish a clear policy on timekeeping
• Train supervisors and employees on policy
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 27
Solution: Early Clock-Ins
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 28
Rounding employees’ starting and
stopping time to the nearest 5, 10,
or 15 minutes.
Both federal and state laws establish
limitations on an employer’s ability to round
an employee’s hours.
Time Rounding
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 29
Scenario: Time Rounding
One of the stylists clocked in at
7:55AM, before her 8AM shift
Is Sally allowed to round her
time to 8:00AM?
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 30
Solution: Time Rounding
Best Practice:
• Track time to the nearest minute worked
Under the FLSA:
• Employers can round to a maximum of 15 minutes
• Must account for all time worked
• Cannot consistently round in the company’s favor
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 31
Working Interviews & Training
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 32
Scenario: Working Interviews
Jaime wants to use “working
interviews” to assess candidates’
skills
Is she required to pay candidates
for time spent working?
Candidates must be paid for any pre-employment time
worked
Jaime should:
• Pay candidates at least minimum wage
• Withhold taxes
• Comply with all applicable employment laws
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 33
Solution: Working Interviews
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 34
Scenario: Training
Employees are required to participate in
sexual harassment training
The training will take place before the
restaurant opens
Does Michael have to pay employees for
time spent in training?
Since the training is mandatory, Michael must pay employees
Training time must be paid, unless:
– Attendance is voluntary and outside regular working hours; and
– It’s not directly related to the employee’s job; and
– The employee does not perform any productive work.
35
Solution: Training
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 36
What is donning and doffing?
Putting on (donning) and taking off
(doffing) protective gear, clothing, or
uniforms. Sometimes these activities are
subject to pay.
Donning and Doffing
Employees are required to wear safety
equipment when working
It takes 10 minutes to put on and take off
Must be done on the premises
Does Priya have to pay employees for
time spent putting on and taking off
equipment?
Scenario: Donning and Doffing
37 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
The work gear is required and employees must put it on and take it off at work
Priya must pay employees for this time
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 38
Solution: Donning and Doffing
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 39
Meal and Break Periods
Employees are provided two 10-
minute breaks
Some employees extend those
breaks without permission
Does Violet have to pay the
employees for the extra time?
Scenario: Rest Break
40 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 41
Solution: Rest Breaks
Rest breaks that last 20 minutes or less must be paid
Unauthorized extensions don’t require pay if it is made clear:
– Breaks may only last a specified duration; and
– Unauthorized extensions are prohibited; and
– Violations are subject to disciplinary action
Josh provides employees a 30-
minute lunch period
One employee was on her lunch
break when Josh asked her to help a
client
Does Josh have to pay her for the
full meal period?
Scenario: Lunch Break
42 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 43
Solution: Lunch Breaks
To be unpaid:
• Meal periods must be at least 30 minutes without interruption; and
• The employee must be fully relieved of all duties
A meal period issubject to pay if:
• It’s interrupted for the company’s benefit; or
• The employee is not free to use the time as they wish
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 44
The nature of an employee’s
work, or extenuating
circumstances, can make
their schedule unpredictable.
When there is no work available,
employers still may be required to
compensate employees.
Reporting In and Waiting Time
Due to the weather, Melanie
sends employees home after
they arrive for their shift
Does Melanie have to pay
employees a certain number of
hours?
Scenario: Report In, But No Work
45 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Under federal law:
• It’s not required to pay non-exempt employees for reporting in when no work is available
• Employees who report to work and must stay until a decision is made, must be paid
Melanie should check her state or local law
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 46
Solution: Report In, But No Work
An employee’s tool breaks and he
is unable to work while waiting for
repairs
He remains on the premises while
he waits
Does Roger have to pay him for
the time he spent waiting?
Scenario: Waiting Time
47 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Time spent waiting may be unpaid only if the employee is:
– Completely relieved from duty;
– Able to use the time for their own purposes;
– Told in advance that they can leave while they wait; and
– Told what time to report back
48
Solution: Waiting Time
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 49
Time spent traveling for
business purposes.
Under the FLSA, certain time spent
traveling may be compensable.
Travel Time
Elizabeth sends two employees who
typically work in the office to a seminar
two hours away
Does Elizabeth have to pay these
employees for the time spent
traveling?
Scenario: Travel to a Different City
50 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Time spent traveling to and from a special one-day
assignment must be paid
Elizabeth can:
• Subtract the employee’s normal commute time
• 4 hours of travel minus 30 minutes of normal commute time = 3.5 hours
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 51
Solution: Travel to a Different City
Thomas’ employees spend several
hours during their workday traveling
from worksite to worksite
Does he have to pay the employees
for time spent traveling to each
jobsite?
Scenario: Travel Among Job Sites
52 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Time spent traveling between job sites during the workday is considered hours worked
Thomas must pay employees when they arrive to their first
job site
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 53
Solution: Travel Among Job Sites
Abby asks an employee to take an
overnight business trip
The flight is at 9AM on a Sat.
The employee's regular work hours are
8AM to 5PM, Mon. – Fri.
Does Abby have to pay the employee for
the time spent on the flight? What if the
employee wants to drive instead?
Scenario: Overnight Travel
54 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Pay is required for the time that cuts across the
employee's regular working hours
Abby can either count:
• Time spent driving the car (12 hours roundtrip); or
• Time spent traveling by plane (2 hours roundtrip)
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 55
Solution: Overnight Travel
Key Takeaways &
Timekeeping Guidelines
PART FOUR
56 © 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
Ensure workers are properly classified
Pay non-exempt employees for all hours worked
Pay exempt employees a fixed salary each week
Maintain records of all hours worked and pay calculations
Ensure you have an accurate and reliable timekeeping process
57
Key Takeaways
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services.
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 58
Thank you for attending
The information contained in this Webcast is based on generally accepted
HR practice and is advisory in nature. This content provides a high level
overview and practical information concerning the subject matter covered
and is provided with the understanding that neither the publisher nor the
writers are rendering legal advice or other professional services.
For more information contact your ADP Associate or visit
http://sbshrs.adpinfo.com/hrsolutions
© 2015 ADP, LLC. This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice or other professional services. 59