FAIR LABOR STANDARDS ACT
IMPLEMENTATION –
WHAT YOU NEED TO KNOW
EMPLOYEE TRANSITION GUIDELINES
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TABLE OF CONTENTS
1. The Fair Labor Standards Act
2. Georgia Tech’s Approach to Implementation
3. Pay Rate and Accruals
4. Deductions
5. Next Steps
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The Fair Labor Standards Act
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WHAT IS FLSA AND WHAT HAPPENED?
 The Fair Labor Standards Act
establishes guidelines for:
 Minimum Wages
 Overtime Pay
 Record-keeping
 Child Labor Laws
 A new rule set was announced on
May 18, 2016:
 It includes an increase in the minimum
salary threshold, from $23,660 annually
to $47,476 annually
 Federal compliance deadline:
December 1, 2016
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HOW FLSA WORKS
Certain criteria must be satisfied to qualify an employee as an
employee exempt from federal overtime pay requirements.
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SALARY TEST
DUTIES TEST
 Employee is paid on salary basis
 Salary must be more than
$913 per week or $47,476
annually
 Note: Teachers – including
professors – are not
required to meet this
portion of test
 Primary duties must be
consistent with executive,
professional or administrative
positions as defined by the
Dept. of Labor
WHAT DOES IT MEAN?
Primarily, it means that nearly 5,000,000 workers across the United States
will convert from exempt (salaried) to non-exempt (hourly) to comply with
Department of Labor regulations.
Converting from exempt to non-exempt means three important things:
1. You will be eligible for overtime pay.
2. You will move from being salaried to hourly. This means you will be required to
report time worked.
•
Method of time reporting is specific to department (Kronos, Deltek, Tech Time)
3. You will move from being paid monthly to bi-weekly (every two weeks).
•
As a non-exempt employee you will be paid at the same rate of pay for all hours
worked in the 26 periods.
A change from exempt to non-exempt status will have no impact on
pay grade, benefit elections, or your base hourly rate.
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Georgia Tech’s Approach to
Implementation
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GEORGIA TECH’S APPROACH
How were decisions made?
1. Federal Law
2. University System of Georgia Guidelines
3. GTHR Recommendations
4. Georgia Tech’s executive leadership team retained final decision over
all position conversions.
Ultimate goal: Positive outcomes for employees providing
opportunities for overtime pay and healthy work-life integration.
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WHEN AND WHO IS MOVING?
949 employees across multiple campus units will be converted from exempt to
non-exempt employees.
• October 17, 2016 – Converted employees begin reporting time as non-exempt
(hourly).
• October 31, 2016 – Last partial monthly check for new FLSA non-exempt population.
• November 4, 2016 – First bi-weekly check for new FLSA non-exempt population.
• December 1, 2016 – Federal Compliance Deadline.
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PAY CYCLES AFTER CONVERSION
Monthly Pay Cycle
Bi-Weekly Pay Cycle
Pay Cycle
First to last day of the month.
Thursday to Wednesday. Two-week
period.
Paychecks Per Year
12
26
Paycheck Date
Last day of the month
Every other Friday after pay period.
N/A- Monthly cycle is reserved
for exempt employees
Exempt: NOT eligible for
overtime.
Paid in bi-weekly check when
earned.
Non-exempt: Eligible for
overtime
Overtime
Employees in Pay Cycle
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GEORGIA TECH BI-WEEKLY PAYROLL
CALENDAR
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TRANSITION TO BI-WEEKLY PAY
Final Monthly
Earnings
Your final monthly paycheck on October 31
will include earnings for the period of
October 1-14, 2016.
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PAY DURING TRANSITION PERIOD
10 days of October to be paid on 10/31
Start recording bi-weekly time
Days of October to be paid on 11/4
First full bi-weekly pay period (paid 11/18)
Last Monthly paycheck
First bi-weekly paycheck (10/17-10/26)
Last Paycheck of year for monthly and
bi-weekly
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Pay Rate and Accruals
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PAY RATE AND ACCRUALS
Hourly pay rate is converted in the following calculation:
Take annual rate divided by 2,080 to determine hourly rate.
$43,041.00/2,080*=$20.69
*In some years, the actual time worked will be 2080, 2088, or 2096 depending on how the calendar falls.
 Accrual rates for non-exempt employees:
 Vacation: http://policies.gatech.edu/vacation
 Sick Leave: http://policies.gatech.edu/employment/sick-leave
 Annualized accruals will not change.
 Monthly accruals will vary, depending on the number of working hours per month.
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ANALYZING CASH FLOW
 There are 26 bi-weekly paychecks in a year (as opposed to 12 monthly
paychecks in a year)
 10 months/year consist of two (2) paychecks per month, two months/year
consist of three (3) paychecks per month
 2 (or 3) bi-weekly paychecks per month are not the same as one monthly
paycheck
 Your monthly salary divided by two weeks DOES NOT equal bi-weekly pay
Over the course of the year, employees will be paid the same gross.
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HOW TO CALCULATE YOUR
BI-WEEKLY PAYCHECK
To calculate your gross, bi-weekly paycheck using example annual pay of $43,041:
1. Calculate hours worked per year:
40 (work week hours) x 52 (weeks in year) = 2080 work hours per year
2. Divide yearly salary by number of work hours per year:
$43,041 (yearly salary)/2080 (work hours per year) = $20.69
3. Multiply hourly rate by the hours in a pay period:
40 (hours per week) x 2 weeks = 80 hours per pay period
$20.69 (hourly rate) x 80 (hours per pay period) = $1,655.42 gross per check
Checking our math:
26 (paydays in a year) x $1,655.42 per check = $43,041* per year (*rounded up)
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SNAPSHOT OF A YEAR’S PAY
Employee Name: George P. Burdell
Annual rate = $43,041.00 Hourly rate = $20.69
Bi-weekly Estimate reflects pay for 80 hours*
(80 x 20.69= $1,655.42)
Monthly
Pay Date
Gross
9/30/2016
$3,586.75
10/31/2016
$3,586.75
11/30/2016
$3,586.75
12/23/2016
$3,586.75
1/31/2017
$3,586.75
2/28/2017
$3,586.75
3/31/2017
$3,586.75
4/30/2017
$3,586.75
5/31/2017
$3,586.75
6/30/2017
$3,586.75
7/31/2017
$3,586.75
8/31/2017
$3,586.75
Total
$43,041.00
NOTE: Over the course of the year,
you will be paid the same gross
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Pay Period
9/1/2016
10/1/2016
10/17/2016
10/27/2016
11/10/2016
11/24/2016
12/8/2016
12/22/2016
1/5/2017
1/19/2017
2/2/2017
2/16/2017
3/2/2017
3/16/2017
3/30/2017
4/13/2017
4/27/2017
5/11/2017
5/25/2017
6/8/2017
6/22/2017
7/6/2017
7/20/2017
8/3/2017
8/17/2017
Total
Adjusted to Bi-weekly
9/30/2016
10/14/2016
10/26/2016
11/9/2016
11/23/2016
12/7/2016
12/21/2016
1/4/2017
1/18/2017
2/1/2017
2/15/2017
3/1/2017
3/15/2017
3/29/2017
4/12/2017
4/26/2017
5/10/2017
5/24/2017
6/7/2017
6/21/2017
7/5/2017
7/19/2017
8/2/2017
8/16/2017
8/30/2017
Pay Date
Gross
Check Type
9/30/2016
10/31/2016
11/4/2016
11/18/2016
12/2/2016
12/16/2016
12/23/2016
1/13/2017
1/27/2017
2/10/2017
2/24/2017
3/10/2017
3/24/2017
4/7/2017
4/21/2017
5/5/2017
5/19/2017
6/2/2017
6/16/2017
6/30/2017
7/14/2017
7/28/2017
8/11/2017
8/25/2017
9/8/2017
$3,586.75
$1,707.98
$1,324.34
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
$1,655.42
Full Monthly
Partial Monthly
Partial Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
$43,038.37
IMPORTANT!!
Employee Name: George P. Burdell
Annual rate = $43,041.00 Hourly rate = $20.69
Bi-weekly Estimate reflects pay for 80 hours*
(80 x 20.69= $1,655.42)
Monthly
Pay Date
Gross
9/30/2016
$3,586.75
10/31/2016
$3,586.75
11/30/2016
$3,586.75
12/23/2016
$3,586.75
Total Days Paid: 87
$14,347.00
Pay Period
9/1/2016
10/1/2016
10/17/2016
10/27/2016
11/10/2016
11/24/2016
12/8/2016
Adjusted to Bi-weekly
9/30/2016
10/14/2016
10/26/2016
11/9/2016
11/23/2016
12/7/2016
12/21/2016
Pay Date
Gross
Check Type
9/30/2016
10/31/2016
11/4/2016
11/18/2016
12/2/2016
12/16/2016
12/23/2016
$3,586.75
$1,707.98
$1,324.34
$1,655.42
$1,655.42
$1,655.42
$1,655.42
Full Monthly
Partial Monthly
Partial Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Full Biweekly
Total Days Paid: 80
$13,240.75
NOTE: The year-end gross totals and days paid ARE different.
In this example, the differences are 7 days and $1,106.25
This is primarily due to the way bi-weekly pay is processed.
Previously, the days of 12/22-12/30 would have been included in your monthly check.
Now, those seven (7) days will be paid as part of the bi-weekly cycle on 1/13/2017.
While your pay will even out over the course of the year, you will reach the total differently.
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BENEFITS DEDUCTION SCHEDULE
Employee Name: George P. Burdell
Annual rate = $43,041.00 Hourly rate = $20.69
Bi-weekly Estimate reflects pay for 80 hours*
(80 x 20.69= $1,655.42)
Adjusted to Bi-weekly Deduction Schedule
Pay Period
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Pay Date
Gross
Benefits Deduction Type
9/1/2016
9/30/2016
9/30/2016
$3,584.80
Full monthly deduction
10/1/2016
10/14/2016
10/31/2016
$1,706.90
Full monthly deduction
10/17/2016
10/26/2016
11/4/2016
$1,324.34
Full biweekly deduction
10/27/2016
11/9/2016
11/18/2016
$1,655.42
Full biweekly deduction
11/10/2016
11/23/2016
12/2/2016
$1,655.42
Full biweekly deduction
11/24/2016
12/7/2016
12/16/2016
$1,655.42
Full biweekly deduction
12/8/2016
12/21/2016
12/23/2016
$1,655.42
No benefits deduction
Deductions
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UNDERSTANDING PAYROLL DEDUCTIONS
$
or
%
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Payroll deductions for benefits and taxes
are taken from paychecks either as:
Flat dollar deduction amount
or
Percentage deduction based on earnings
CHANGING FROM EXEMPT TO NON-EXEMPT
Deductions
• Benefits (medical, dental, etc.) as well as parking deductions will be split between biweekly checks for non-exempt employees.
• Non-exempt employees enrolled in Flexible Spending Accounts (accounts designed to
save money on taxes for health care or dependent care expenses) will not have to do
anything. Deductions will be recalculated automatically to be deducted in the
remaining checks for 2016.
• Deductions for retirement savings plans will be recalculated automatically to spread
over the remaining pay checks for 2016.
• Wage garnishments and flat additional deductions for taxes and retirement plans
that were coming out monthly will need to be adjusted to prevent the same amount
from coming out per check as a bi-weekly employee.
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FLAT DOLLAR AMOUNT DEDUCTIONS
Flat Amount deducted Twice Per Month (24 paychecks)
Insurance
Other
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•
•
•
•
•
•
•
•
•
Health Insurance
Life & Dependent Life
Accidental Death & Dismemberment
Supplemental Life Insurance
Supplemental Disability
Health Care/Dependent Care
Additional flat dollar
Garnishments depending on withholding order
Transit and Parking, etc.
PERCENTAGE-BASED DEDUCTIONS
% based on earnings are deducted every paycheck
• Federal
Taxes
Retirement
Other
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• State
• OASDI (Social Security)
• Medicare
• USG Retirement Plan (TRS or ORP)
• 403B or 457B if elected % Deduction (for example, 3% of every
check)
• Garnishments depending on withholding order
SPECIAL AFTER-TAX DEDUCTIONS
There are certain, after-tax deductions that will not automatically change with your new
pay schedule. To account for the different deduction schedule and to be effective for your
first bi-weekly paycheck, update your withholdings in the systems indicated below from
October 26-October 30, 2016.
Go into TechWorks to manually update:
•
•
•
•
•
Flat amount direct deposits
Flat amount of additional tax
Credit Union deductions (e.g., loans, percentage-based deductions)
Payroll deductions to load BuzzCard with BuzzCard Account Funds
529 College Savings Plans
Go into Retirement Manager to manually update:
• 403B or 457B if elected % Deduction (e.g., 3% of every check)
Failure to update withholdings may result in a smaller than anticipated paycheck.
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Next Steps
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TRANSITION PLANNING
RECOMMENDATIONS
1.
Plan ahead for new gross pay.

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If you have elected additional tax withholdings, check your W-4 on TechWorks
2.
Review your budget and adjust for new check amounts and paydays.
3.
Make adjustments to automatic withdrawals from your accounts to align
with new pay schedule.
4.
Update withholdings in TechWorks and Retirement Manager if necessary
(Oct. 26-30, 2016)
5.
Contact Lenders, Banks, Landlord, etc. and request to:

Move bill due dates to later in the month or

Split monthly bill in two payments
IMPORTANT IMPLEMENTATION DATES
October 17, 2016 – Converted employee population begins reporting time as nonexempt (hourly).
October 31, 2016 – Last partial monthly check for new FLSA non-exempt population.
November 4, 2016 – First bi-weekly check for new FLSA non-exempt population.
December 1, 2016 – Increases processed for exempt employees moved to new salary
threshold.
December 1, 2016 – Federal Compliance Deadline.
December 23, 2016 – Last check of calendar year for monthly (salaried) and bi-weekly
(hourly) employees.
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WWW.OHR.GATECH.EDU/FLSA
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