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Employment Law In Focus – October 2016

The holiday season is almost upon us, and with it comes one of the largest “gifts” the U.S. Department of Labor has ever provided – the new Final Rule on overtime pay effective December 1, 2016.  Unfortunately for employers, this gift is heavily weighted in favor of increasing the scope of overtime pay for employees, and it does so by dramatically affecting who is an executive, administrative, professional, or highly-compensated employee under the Fair Labor Standards Act.

Although a number of organizations have filed lawsuits to challenge and try to block the Final Rule, at least so far no court has invalidated or enjoined its implementation.  Therefore, employers are well-advised to begin preparing for the new salary and overtime requirements – a process that starts with understanding the changes, and then determining whether and how those changes might affect your workforce.

In summary, the Final Rule makes the following key revisions to the FLSA and its regulations:

*Raises the salary threshold from $455/week to $913/week – or $47,476 per year. (Nondiscretionary bonuses and incentive payments, including commissions, may account for up to 10 percent of the new required salary level, provided they’re paid at least quarterly.)

*Automatically updates the salary and compensation thresholds every three years to maintain the levels at the DOL-required percentile. (e., the 40th percentile of weekly earnings of full-time salaried workers in the lowest wage census region in the United States, which is currently the South.)

*Raises the compensation level of an exempt “highly compensated employee” to the annual equivalent of the 90th percentile of full-time salaried workers nationally, which is currently $134,004.

*Requires NO change in the current “duties test” for each exempt category.

*Permits NO carve-out for charitable or other nonprofit organizations (but the organization or specific employees must still be subject to the FLSA).

*Permits NO carve-out for colleges and universities, but these entities will be given options to avoid paying overtime under the current FLSA regulations. (See DOL release guidance aimed at higher education.)

*Institutes a non-enforcement policy related to organizations that serve people with disabilities. (See DOL release guidance targeted at nonprofits.)

One of the best resources concerning the new Final Rule is a DOL Fact Sheet summarizing its terms – and copies can be obtained through the following U.S. Department of Labor website:

Key Determination 

Probably the most important decision for employers regarding the Final Rule concerns those currently exempt employees who are not being paid at the new annual salary level.  This decision primarily involves whether to raise their salaries to at least $47,476 ($913/week), thereby maintaining their “exempt” status, or whether to reclassify them as nonexempt employees.  Stated another way, given the new DOL requirements, employers have two main options with employees who satisfy an “exempt’ classification but aren’t paid at least $47,476: (1) increase their salary to at least the new threshold, which would avoid having to pay overtime; or (2) leave the employees in a nonexempt category and pay them hourly plus overtime.

Simply stated, advantages of treating employees as “exempt” include paying them for the job no matter how long it might take, not having to track or record hours worked, and not paying overtime for any hours worked over 40 hours in a workweek.  Disadvantages include having to pay the exempt employee for an entire workweek no matter how few hours are actually worked (with certain limited exceptions), and strict limitations on making paycheck deductions which, if improper under the FLSA and its highly nuanced regulations, can sacrifice the exemption – not only for the affected employee, but also for other employees in the same job classification.

Advantages of treating employees as “nonexempt” include paying them only for hours actually worked, and having more ability to make authorized and other permitted paycheck deductions (such as recouping advanced but unearned vacation time upon termination of employment).  Disadvantages include having a time-keeping system that must accurately track and record their hours work, and having to pay overtime at the rate of 1½ times their regular rate of pay for all hours worked in a single workweek.  (Note: Employers may still pay an otherwise nonexempt employee on a guaranteed weekly salary basis, but an overtime “half-time” payment must still be made for any hours worked over 40 hours in a workweek, and other strict requirements regarding authorized and unauthorized deductions also apply.)

Recommended Next Steps

While not applicable to every employer, some recommended next steps in preparing for the Final Rule include at least the following:

First, identify which employees should be included in the group that will need to be given raises or reclassified in order to honor the new requirements.  Remember that these individuals must still satisfy the “duties” test and other requirements for the applicable exemption – i.e., their job duties and other requirements must still meet the standards for an executive, administrative, professional or “highly compensated” employee.  Note:  This can be an excellent opportunity to conduct a self-audit in order to make sure your exempt employees are truly “exempt”, especially given the ever-increasing number of DOL legal challenges for misclassifying employees.

Second, and speaking of audits, this could also be an excellent time to review your standard wage & hour policies and procedures for tracking and recording working time, travel time, using mobile devices for work-related purposes during non-regular working hours, and otherwise working “off the clock”.  The two latter concerns are particular issues for formerly exempt but now nonexempt employees who, starting December 1, must generally record and be compensated for that time as specific “hours worked.”  Special training might also be needed for any reclassified employees and their managers about those policies, time keeping procedures and what is considered “compensable” versus “noncompensable” time.

Third, develop a new compensation plan for reclassified employees.  If reclassified, and in order to stay within budgeted labor costs, employers will need to determine the proper regular rate of pay for these employees as well as expected overtime hours for which the higher overtime rate will need to apply (1½ times the regular rate of pay for each hour worked over 40 hours in a single workweek).  To help this process, the DOL has given its blessing to a cost-neutral solution for assessing new compensation by using the following formula:  Weekly salary / [40 hrs + (# of OT hours x 1.5)].

Example:  A currently exempt employee is paid a salary of $800/week and usually works 50 hours per week.  To reclassify that employee as nonexempt subject to overtime, but essentially maintain an $800/week job position, the following formula can be used:

$800 / 40 hrs + (10 hrs OT x 1.5) = $800 / 55 = $14.55/hr

Applying that calculation to any given workweek in which 10 hours of overtime are worked (at 1½ times the regular rate of pay), the new $14.55 hourly rate results in the following “neutral” effect:

40 hrs x $14.55/hr = $582

10 hrs x $21.82 = $218

 $582 + $218 = $800/week


While not employer-friendly, the DOL’s new Final Rule can be implemented with relatively minimal adverse effect on employers.  But making that happen takes planning and execution – and companies are well-advised to begin the process now since December 1 is fast approaching.

This article was written by Ken Carlson of Constangy, Brooks, Smith & Prophete, LLP

Winston-Salem State University shines in new national rankings

Winston-Salem State University (WSSU) continues to rank as one of the top producers of degrees for African Americans in the nation, according to recent rankings from Diverse: Issues in Higher Education magazine.

For African American registered nursing (RN) graduates, WSSU ranked no. 5 in the nation, up one spot from the 2015 rankings. WSSU’s nursing program also ranked no. 19 for all minority graduates and no. 17 for Native American graduates.

WSSU ranks no. 30 in the magazine’s “Top 100 Bachelor’s Degree Producers” for overall African American graduates.

WSSU also ranks in the top 50 in six additional categories for African American graduates:

*No. 8: Health Professions and Related Programs
*No. 10: Parks, Recreation, and Fitness Studies
*No. 22: Education
*No. 23: Health and Medical Services
*No. 26: Liberal Studies
*No. 36: Physical Sciences

Diverse: Issues in Higher Education’s analysis is based on U.S. Department of Education data.

Additional Rankings

WSSU also has received accolades recently from the website

The website ranked WSSU one of its “Best Southern Regional Universities, 2016.” WSSU was the only North Carolina Historically Black College and University (HBCU) to make the list.

WSSU also made the website’s “50 Best Bachelor’s in Social Work” rankings. WSSU is the only university in the Triad to make the list. The ranking is based on academic reputation, cost and post-graduate achievement in the job market. The social worker program is offered through the Department of Human Service Studies.

About Winston-Salem State University

Winston Salem State University fosters the creative thinking, analytical problem-solving, and depth of character needed to transform the world. Rooted in liberal education, WSSU’s curriculum prepares students to be through leaders who have the skills and knowledge needed to develop innovative solutions to complex problems. Founded in 1892, WSSU is a historically Black constituent institution of the University of North Carolina with a rich tradition of contributing to the social, cultural, intellectual, and economic growth of North Carolina, the region and beyond. Guided by the motto, “Enter to Learn, Depart to Serve,” WSSU develops leaders who advance social justice by serving the world with compassion and commitment.

Discovery Forum in The Triad

Are you a young (18-30) social entrepreneur with an idea that could make a difference in the Triad? Looking for a chance to pitch your idea or social venture in front of a crowd?

Don’t miss the opportunity to participate in the Triad Discovery Forum at Wake Forest University’s Byrum Welcome Center on Wednesday, November 16, at 5:30pm. Ten teams will have five minutes each to pitch their idea, and the audience will vote on their favorite pitches. The top three teams will be invited to an intensive leadership development weekend and a chance to compete for $10,000. It will be an evening full of innovation, inspiration, and networking!

Click here for more details and registration information.

Volunteers Needed for the 2016 Forsyth County Invitational Robot Run

The 6th Annual Forsyth County Invitational Robot Run Tournament that will take place on Saturday, October 29, at Atkins High School located at 3605 Old Greensboro Road, will feature 25 middle school robotic teams from all 17 public middle schools across Forsyth County. This robotics program is designed to get children excited about science and technology — and teach them valuable employment and life skills.

We need your help! Specifically, we are looking for volunteers for both our Robot Run and an upcoming December 10th official Qualifying Tournament. You can volunteer using these links:

*October 29 Forsyth County Invitational Robot Run:

*December 10 FLL Qualifying Tournament:

Click here to view the volunteer flyer. Please pass this on to any colleagues that might be interested in volunteering as well – we are specifically looking for Judges and Referees (no prior experience is needed). Hope to see you there! Thank you for your support of our kids across Forsyth County!

2016 BRC Financial Symposiums hosted by Bernard Robinson & Company, L.L.P.

Please join us for the 2016 BRC Financial Symposiums hosted by Bernard Robinson & Company, L.L.P.!

Don’t miss out on a great opportunity for a full day of relevant financial information such as the current and future economic status of our region, new IRS and FASB requirements, employment law and compliance, changes in the Employee Retirement Income Security Act, as well as other topics. Additional speakers and topics may vary by location.

Our courses are CPE eligible and relevant for CPAs, financial planners, local executives, business owners, and non-profit professionals.

$45 includes eight hours of CPE, continental breakfast, lunch, snacks, and new this year a post-Symposium cocktail hour!

With three locations and dates to serve you, we hope you will be a part of an important event designed with your business in mind.  Please use the links below to sign up today as space is limited.

Registration Now Open for 2016 BRC Financial Symposiums!

Click on the location of your preference to register:

Winston-Salem – Tuesday, October 25, 2016
Forsyth Country Club, 3101 Country Club Rd., Winston-Salem, NC 27104

Greensboro – Thursday, October 27, 2016
Starmount Forest Country Club, 1 Sam Snead Drive, Greensboro, NC 27410

Raleigh – Thursday, November 3, 2016
North Ridge Country Club, 6612 Falls of Neuse Rd., Raleigh, NC 27615

The Winston-Salem Urban League announces Career Expo to Address Persistent Unemployment across the Triad

On October 26, 2016, the Winston-Salem Urban League will host Career Expo 2016 to address the persistent unemployment, experienced by tens of thousands across the Triad.

“We keep hearing unemployment is down, jobs are up,” says James Perry, CEO of the Winston-Salem Urban League. Perry continued, “that’s news to the tens of thousands of North Carolinians who have become so frustrated that they have quit searching for jobs. We know they’re there, they still want to work, and we won’t give up on them.”

Career Expo 2016 will feature as many as 50 ready to hire employers. Mayor Allen Joines will extend a welcome to attendees.

The event is free and open to the public. Registration is preferred but not required. Attendees should bring resumes, wear interview ready attire and come ready to network. Visit for details.

Career Expo 2016 will take place on Wednesday October 26th, 10am to 4pm at Wake Forest Biotech Place located at 575 Patterson Ave, Winston-Salem, NC 27101.

James Perry states, “Our Career Expo 2016 will have employers who are looking to hire for a wide range of skills and backgrounds, a critical component of the Urban League’s efforts to strengthen the economy.

DoubleTree by Hilton Winston Salem – University celebrates their One Year Anniversary

You are invited to the DoubleTree by Hilton Winston Salem – University for appetizers and refreshments in honor of our One Year Anniversary on Thursday, October 27th from 4:00-6:00pm.

We will be giving away prizes including hotel stays and hosting tours of our newly renovated hotel.

Please R.S.V.P. to Marci Johnson at

See you there!

Smart Start of Forsyth County Salute to Business Luncheon – Thursday, September 15, 2016

Founded in December 1994 as the Forsyth Early Education Partnership, Inc., Smart Start of Forsyth County (SSFC) provides the tools, training, resources, and leadership to help families help our children thrive.  As Forsyth County’s champion for children and families, SSFC mobilizes resources, forges partnerships, and shapes public opinion in rallying the Winston-Salem/Forsyth County community to build and sustain an affordable, comprehensive, high quality system of early childhood development and learning. As a partnering organization with the North Carolina Partnership for Children, Inc. (NCPC) in Raleigh, North Carolina, SSFC is the only organization in Forsyth County, charged by statute, to care about the quality and progress of the community’s early-learning system.

A passionate team of education and community advocates, led by Dean Clifford, Ph.D., set SSFC on its path of mobilizing resources and shaping public opinion to improve early childhood care, development, and education. Since its founding, succeeding cohorts of volunteer leaders and professional staff have continued Forsyth County’s local early education partnership to provide parents, educators, and policy makers with tools for raising healthy, successful children, and ensuring that children have access to preventative health, dental, and vision care.

During calendar year 2015, our local partnership will celebrate its 20th anniversary—an important milestone for any endeavor!

Through the use of public and private resources, our volunteers and professional staff devote our corporate efforts to building our community’s early learning infrastructure through investments in people, practices, and organizations, serving children, families, educators, and allied professionals through direct services in the field, and leading the agenda for change through our civic and community partnerships.


Front Row (left to right):

Elizabeth Dampier, MPA, Chairman, Board of Directors – Smart Start of Forsyth County, Inc.
Larry Vellani, Executive Director – Smart Start of Forsyth County, Inc.
Brent Waddell, Market President – BB&T and Chairman – Winston-Salem Chamber of Commerce
Jackie Lofton, Director, Advancement & Professional Outreach – Smart Start of Forsyth County, Inc.

Second Row (left to right):

Gayle Anderson, President & CEO – Winston-Salem Chamber of Commerce
Rodessa Mitchell, Vice President, Education & Workforce Development – Winston-Salem Chamber of Commerce
Mari Jo Turner, Board of Directors – Smart Start of Forsyth County, Inc.

Third Row (left to right):

Vicki Powers, Event Planner – Twin City Quarter
Jill Atherton, Vice President, Economic & Community Development – Winston-Salem Chamber of Commerce
Debra Shaw, Event Planner – Twin City Quarter
Dan Joyner, President – Image360

Intelligent Business Solutions, Inc. relocates corporate headquarters to Historic Salem Town Hall

Intelligent Business Solutions, Inc. was founded in 1987 with the goal to write custom software programs that would help people. Twenty-seven years later, that is still our corporate philosophy. Over the years, we have had the honor and privilege to work with caregivers who are leaders in their fields of medicine and we are consistently humbled and inspired by the compassion and dedication of our clients. Recently the company relocated their corporate headquarters to a historic building in downtown Winston-Salem. The move was strategic, allowing the company to expand its Community footprint by starting initiatives with the Chamber of Commerce, the Entrepreneur Ecosystem Project, the Creative Corridors Coalition, and through volunteerism at Old Salem, as well as other local efforts.

The building purchased in the fall of 2015 by Tango Properties, LLC underwent extensive renovations under the watchful eye of both State and Federal Historic Preservation offices. On September 23, 2016, the Historic Salem Town Hall was officially christened with a 1920’s themed Grand Opening as the new corporate headquarters of Intelligent Business Solutions, Inc.

Designed by noted architect Willard C. Northrup, the building sports a three-story corner bell tower and has both Moravian and Italianate design elements. This iconic landmark has a long history of serving the community – in 1912 it served as both the town hall and fire department for the town of Salem. A mobile iron-lung machine supported the citizens of Winston-Salem during the polio epidemic. The building was actively used by the Rough and Ready Fire Department until 1976, and five years later in 1981, the building went under major renovations and was converted to office space.

The Salem Town Hall serves as an important landmark within the Historic corridor and Old Salem. However, the innovation team at Intelligent Business Solutions is even more excited to be a stone’s throw from the Innovation Quarter. A key part of the 2016 renovation was the inclusion of an Innovation Theater that will be used to showcase the company’s newest technology offering, the Care Command Center, an ingenious solution designed to dramatically change the way patients and caregivers flow through a health care organization. The primary goal of this software is super efficiency for the providers and an extraordinary care experience for the patients and caregivers.

We’re looking forward to meeting with our clients here and showing off the city’s charm!

Local NC Food & Fun Night – Oct 22

Join the Midtown Cafe & Dessertery for the Fall version of Local NC Food & Fun Night! On Saturday October 22, from 5:00pm – 9:30pm, we will feature a special menu made from all local ingredients. Local vendors will be on site with free samples, live music, and lots of local drink specials! Come support local businesses during this fun event!

Visit our website: