Effective July 24, 2014, the Postal Service™ is revising the Employee and Labor Relations Manual (ELM) subchapters 410, 430, and 440. These revisions will ensure compliance with laws governing the Fair Labor Standards Act (FLSA) and provide guidance to HR professionals within the Postal Service regarding application of internal policy.
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Employee and Labor Relations Manual (ELM)
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4 Pay Administration
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410 Pay Administration Policy for Nonbargaining Unit Employees
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417 Temporary Assignment to Nonbargaining Unit Positions (Career Employees)
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417.12 Pay Schedule and Premiums
[Revise the text of 417.12 to read as follows:]
The salary of a career employee who is temporarily assigned to an EAS position is based on the career EAS schedule. However, employees continue to receive pay premiums applicable to their permanently assigned positions while temporarily assigned to EAS positions.
An FLSA-exempt employee who has been temporarily assigned to perform in an FLSA-nonexempt work position for more than 50 percent of the work hours for the week may be eligible for FLSA overtime for hours actually worked over 40 in that FLSA workweek. (See 417.2 for determination of the FLSA status of an employee temporarily assigned to an EAS position.)
[Add new section 417.2 to read as follows:]
417.2 Assigning FLSA Status
It is the policy of the Postal Service that an employee performing work in a position with a different FLSA classification will be classified for FLSA pay purposes as follows:
a. For an FLSA-exempt employee temporarily assigned to an FLSA-nonexempt position:
1. For the first full pay period of the temporary assignment, the employee’s FLSA status remains exempt.
2. For all pay periods beginning after the first full pay period, the employee’s FLSA status is changed to nonexempt and the employee is eligible for FLSA overtime compensation.
Note: PS Form 50, Notification of Personnel Action, must be issued when the employee’s FLSA status changes to and from FLSA nonexempt status.
b. An employee whose position of record is nonexempt will not be reclassified as FLSA exempt when temporarily assigned to a position that is classified as FLSA exempt, regardless of the length of the temporary assignment.
[Renumber old 417.2 as 417.3 as follows:]
417.3 Rates of Pay
[Renumber 417.21 as 417.31 and revise the text to read as follows:]
417.31 Lower Grade
Employees who are temporarily assigned to perform duties of a lower grade continue to receive their existing basic salaries. (See 417.2, Assigning FLSA Status.)
[Renumber 417.22 as 417.32 and revise the text to read as follows:]
417.32 Same or Equivalent Grade
Employees who are temporarily assigned to perform duties of the same grade or of an equivalent grade (see 418.1) continue to receive their existing basic salaries (see 417.2).
[Renumber 417.23 as 417.33 as follows:]
417.33 Higher Grade
[Renumber 417.231 as 417.331 as follows:]
417.331 General Requirement
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[Renumber 417.232 as 417.332 as follows:]
417.332 Employee With Rate Retention
[Renumber 417.233 as 417.333 and revise the first sentence to read as follows:]
417.333 Higher Level Pay Eligibility
An employee whose temporary assignment meets the conditions described in 417.334 is eligible for higher level pay when temporarily assigned to an authorized established EAS position in a higher grade than that of the position to which permanently assigned, except as follows:
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[Renumber 417.234 as 417.334 as follows:]
417.334 Higher Level Pay Conditions
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[Renumber 417.235 as 417.335 and revise the text of 417.335b to read as follows:]
417.335 Payment Amount
b. From Rural Carrier to Nonbargaining Unit Schedule. A rural carrier is paid based on the assigned route’s evaluation for the first 30 days of a temporary higher level assignment. At the beginning of the pay period following this 30-day period, the carrier’s salary is converted to that of a 40-hour route, attained step. The salary is then adjusted in accordance with 417.335a.
[Renumber 417.236 as 417.336 and revise the text of 417.336c to read as follows:]
417.336 Payment Factors
c. Assigning FLSA Status. See 417.2.
[Renumber 417.3, 417.31, and 417.311 as 417.4, 417.41, and 417.411 as follows:]
417.4 Postmaster Positions
417.41 Officer in Charge
417.411 Definition
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[Renumber 417.312 as 417.412 and revise the first sentence to read as follows:]
417.412 Basis for Rate of Pay
The salary of a career employee temporarily assigned to a Post Office as OIC is based on the grade of the Post Office to which he or she is assigned and is determined in accordance with the provisions of 417.3.***
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[Renumber 417.32 and 417.321 as 417.42 and 417.421 as follows:]
417.42 Postal Operations Administrator
417.421 Definition
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[Renumber 417.322 as 417.422 and revise the text to read as follows:]
417.422 Basis for Rate of Pay
The salary of a career employee temporarily assigned to a Post Office as POA is based on the grade two grades below the grade for that office and is determined as provided in 417.3.
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432.111 Bargaining Unit Employees
[Revise the text of 432.111a to read as follows:]
a. Full-time employees — career annual rate employees who are assigned to work schedules of five 8-hour days in a service week.
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432.21 Basic Rate
[Revise the first sentence of 432.21 to read as follows:]
The basic rate is the amount of annual, daily, or hourly salary provided by the applicable salary schedule for an employee’s assigned position — excluding TCOLA, overtime, EAS additional pay, out-of-schedule premium, Sunday premium, holiday-worked pay, and night differential.***
432.22 Regular Rate
[Revise the text of 432.22 to read as follows:]
The regular rate is defined by the Fair Labor Standards Act (see 443.21).
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432.44 FLSA Workweek
[Revise the text of 432.44 to read as follows:]
See 443.23.
432.45 Work Assignments
[Revise the text of 432.45 to read as follows:]
In order to comply with the postal policy of basing pay on hours worked in a service day, managers must assign the work hours of employees in such a manner that (a) employees do not perform continuous work that is reported in 2 different service days and (b) any scheduling changes cannot be construed as an intent to evade the payment of overtime under the provisions of the FLSA (see 443.231).
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432.53 City Letter Carriers (7:01 Rule)
[Revise the second sentence of 432.53 to read as follows:]
***This is known as the 7:01 rule (see 443.212g).
432.54 Rural Carriers
[Revise the text of 432.54 to read as follows:]
See 444.
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432.7 Time Worked
[Revise the text of 432.7 to read as follows:]
See 443.22.
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433.6 EAS A-E Postmasters
[Revise the text of 433.6a to read as follows:]
a. The Postmaster’s FLSA regular rate for the week, i.e., straight time pay for the week divided by total hours actually worked in the week (see 443.21), is not less than the FLSA minimum wage.
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434.12 Definitions
[Revise the text of 434.12 to read as follows:]
Definitions relevant to overtime are as follows:
a. Exempt employees — employees who are serving in positions that are exempt from and are not covered by the overtime provisions of FLSA because they are paid on a salary basis and are administrative, professional, or executive personnel (see 443.3). These include all employees occupying positions that are classified exempt as indicated in the Organization Management (OM) system position directory.
b. Nonexempt employees — employees who serve in positions that are covered by the overtime provisions of FLSA (see 443.1), namely all those positions that are not classified as exempt in 434.12a. This includes employees serving in nonexempt positions whose rate retention is based on an exempt position.
c. Paid hours — hours actually worked plus paid time off, as defined below:
(1) Hours actually worked — a time that management suffers or permits an employee to work. The hours actually worked include compensable travel and training time, standby time, or other time on duty. They do not include paid time off as defined below (see also 443.22).
(2) Paid time off — paid hours of annual leave, sick leave, holiday leave, court leave, military leave, guaranteed time (not worked), and all other paid hours, including personal absences where no work is performed for the Postal Service.
Note: These hours are excluded from the determination of FLSA overtime.
434.13 Types of Compensation
434.131 Postal Overtime
[Revise the text of 434.131 to read as follows:]
Postal overtime is compensation paid pursuant to Postal Service regulations and in accordance with applicable provisions of the collective bargaining agreements to eligible personnel at 150 percent of each employee’s basic hourly rate for actual work hours in excess of 8 paid hours in a day, 40 paid hours in a service week or, if a full-time bargaining unit employee, on a nonscheduled day.
434.132 FLSA Overtime
[Revise the text of 434.132 to read as follows:]
FLSA overtime is compensation paid in accordance with the FLSA overtime requirement described in 443.
434.133 Penalty Overtime
[Revise the text of 434.133 to read as follows:]
Penalty overtime is compensation paid pursuant to Postal Service regulations to eligible personnel at two times the employee’s basic hourly straight-time rate for hours described in applicable labor agreements.
434.134 FLSA Exempt EAS Additional Pay
[Revise the text of 434.134 to read as follows:]
FLSA-exempt EAS additional pay is compensation directed by Postal Service regulations to be paid to eligible FLSA-exempt employees and is calculated by dividing the annual salary by 2080 and applying this rate to each eligible hour worked.
434.14 Eligibility and Coverage
434.141 Eligible for Overtime Pay
[Revise the text of 434.141 to read as follows:]
Exhibit 434.141a identifies employees who are eligible for postal overtime. Exhibit 434.141b identifies employees who are eligible for FLSA overtime. Exhibit 434.141c identifies employees eligible for penalty overtime.
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Exhibit 434.141b FLSA Overtime Pay Eligibility Table
[Revise Exhibit 434.141b to read as follows:]
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434.142 Multiple Eligibility
[Revise the text of 434.142 to read as follows:]
When an employee is eligible for more than one type of overtime during a service week:
a. First, penalty overtime is paid for any qualifying hours;
b. Next, postal overtime is then paid for qualifying hours that are not paid as penalty overtime; and
c. Then a calculation is made to ensure that at least 150 percent of the employee’s regular hourly rate is paid for all hours worked in excess of 40 at the regular hourly rate in the employee’s FLSA workweek.
434.143 Assignment of FLSA Exempt and Nonexempt Work
[Revise the text of 434.143 to read as follows:]
An FLSA-exempt employee may perform exempt and nonexempt work during a workweek without affecting the employee’s exempt status, provided that the employee’s primary duty, as defined under the FLSA (29 CFR 541 Subpart H), is exempt work.
The amount of time spent performing exempt work is a factor, but not necessarily the determinative factor, in deciding the FLSA classification of an employee. When an exempt employee is regularly assigned to perform nonexempt work for more than 50 percent of his or her workweek, the manager should inform the district Human Resources manager. Human Resources will contact the vice president of Employee Resource Management to request an FLSA status assessment.
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434.42 Eligibility
434.421 Eligibility for Holiday Leave Pay
[Revise second and third paragraph of 434.421 to read as follows:]
To receive holiday leave pay, employees must be in a pay status either the last scheduled hour before or the first scheduled hour after the holiday or designated holiday.
However, for an employee on any form of extended LWOP, paid leave for the last scheduled hour before or the first scheduled hour after the holiday or designated holiday is not approved for the purpose of qualifying the employee for holiday pay.
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438.16 Effect on Other Travel Reimbursement
[Revise the text of 438.16 to read as follows:]
The rules stated in 438.1, Pay During Travel, do not affect the entitlement of employees to other types of reimbursement under applicable regulations, such as reimbursement of certain travel expenses and per diem.
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441.1 Federal Statute
[Revise the text of 441.1 to read as follows:]
The Fair Labor Standards Act (FLSA), as amended, applies to the Postal Service. It is the policy of the Postal Service to comply with the FLSA. This section provides a summary of the FLSA and is intended to assist Postal Service personnel in complying with the law. To the extent that any provision in ELM 440 appears to be inconsistent with or provide greater or lesser rights or benefits than provided under the FLSA, the provisions of the FLSA and FLSA regulations are controlling.
441.2 Enforcement
[Revise the text of 441.2 to read as follows:]
The FLSA authorizes the Department of Labor (DOL) to: (a) enforce compliance with the FLSA; (b) investigate allegations of noncompliance with the FLSA; and (c) supervise the payment of unpaid wages or unpaid overtime compensation owed to an employee because of noncompliance. The law also provides for enforcement by private suit in the courts.
[Delete 442, 442.1, and 442.2 in their entirety, renumber 442.3 to 441.3 and revise the text of 441.3 to read as follows:]
441.3 FLSA Poster
All Postal Service facilities are required to conspicuously display the current FLSA poster authorized by the DOL.
[Renumber 443 as 442 as follows:]
442 Equal Pay Provisions
[Renumber 443.1 as 442.1 and revise the text to read as follows:]
442.1 Sex Discrimination Policy
The FLSA (as amended by the Equal Pay Act), Section 6(d)(1), prohibits pay discrimination on the basis of sex. Employees, regardless of their sex, must receive equal wages for equal work on jobs which require equal skill, effort, and responsibility and are performed under similar working conditions.
[Renumber 443.2 as 442.2 and revise the text to read as follows:]
442.2 Justified Wage Differentials
Wage differentials do not violate the FLSA if they are based on: (a) a seniority system; (b) a merit system; (c) a system that measures earnings by quantity of production; or (d) any factor other than sex.
[Renumber 443.3 as 442.3 and revise the text to read as follows:]
442.3 Labor Organization Intervention
It is illegal for a labor organization to cause or attempt to cause an employer to discriminate against an employee in violation of the Equal Pay Act.
[Delete 443.4 in its entirety and renumber 444 as 443 as follows:]
443 Overtime Pay
[Renumber 444.1 as 443.1 and revise the title and text to read as follows:]
443.1 Overtime Requirement
The FLSA provides that the Postal Service must pay an employee covered by the overtime provisions of the Act (also known as an FLSA-nonexempt employee) at one and one-half times the employee’s regular rate for all hours of actual work in excess of 40 hours in any FLSA work week. (See 444 for special provisions covering rural letter carriers.)
[Renumber 444.2 and 444.21 as 443.2 and 443.21 as follows:]
443.2 Explanation of Terms
443.21 Regular Rate
[Renumber 444.211 as 443.211 and revise the title and text to read as follows:]
443.211 Definitions
a. Salaried Employee. An employee’s regular rate of pay is defined as the remuneration for employment received during an FLSA workweek, as specified in 443.212, divided by the hours that the employee actually worked.
b. Hourly Rate Employee. The regular rate of an employee who is paid a fixed hourly wage is defined as the remuneration for employment received, as specified in 443.212.
[Renumber 444.212 as 443.212 and revise the text to read as follows:]
443.212 Inclusions
Remuneration for employment includes:
a. Total base straight-time pay, including COLA, for work performed.
b. Total straight-time pay differential for higher level work performed.
* * * * *
f. Total base straight-time pay, including COLA, for work performed on a holiday.
g. Total base straight-time pay, including COLA, of a city letter carrier covering those hours not worked between the seventh and eighth hour of a regular scheduled day (7:01 rule). See 432.53.
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k. Total straight-time pay during scheduled tour and/or scheduled overtime spent waiting for or receiving medical attention (see 432.72).
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[Renumber 444.213 as 443.213 and revise the first sentence, 443.213a and 443.213b to read as follows:]
443.213 Exclusions
Remuneration for employment excludes:
a. Pay for time not worked, such as annual leave, sick leave, holiday leave, and guaranteed time not worked.
b. The 50 percent overtime pay premium for time in pay status in excess of 8 hours in a day or 40 hours in a week.
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[Renumber 444.214 as 443.214 and revise the text to read as follows:]
443.214 Exclusions Not Creditable
The exclusions listed in 443.213a, f, g, and i are not creditable toward FLSA overtime compensation that is due to an employee.
[Renumber 444.215 as 443.215 and revise the text to read as follows:]
443.215 Dual Employment Rate
When an employee in a single service week works in two or more positions having different rates of pay, the regular rate for the week equals the total base straight-time pay for actual work performed, plus all other remuneration for actual work performed, divided by the hours worked.
[Renumber 444.22 as 443.22 as follows:]
443.22 Actual Work
[Renumber 444.221 as 443.221 and revise the text to read as follows:]
443.221 Definition
The FLSA defines actual work as all time which management suffers or permits an employee to work.
[Renumber 444.222 as 443.222 as follows:]
443.222 Exclusions
[Renumber 444.223 as 443.223 and revise the text to read as follows:]
443.223 Unauthorized Time
An employee must be paid for all work performed, regardless of whether the supervisor approved or disapproved the employee’s continuing to work. It is the duty of supervisors to exercise control over the working hours of their subordinates by making sure that employees complete their duties and clock out promptly at the completion of their tour if additional work is not desired or authorized. (See 432.7 for disallowed time.)
[Renumber 444.23 as 443.23, revise the title and add text to read as follows:]
443.23 FLSA Workweek
See 432.42, Service Week.
[Renumber 444.231 as 443.231 and revise the text to read as follows:]
443.231 Explanation
The FLSA workwork for all employees is a fixed and regular recurring period of 168 hours — 7 consecutive 24-hour periods. Once the beginning time of an employee’s workweek is established, it remains fixed regardless of the schedule of hours worked. The beginning of the FLSA workweek may be changed only if the change is intended to be permanent and is not designed to evade the payment of overtime.
[Renumber 444.232 as 443.232 and revise the text to read as follows:]
443.232 Permanent Change
When there is a permanent change in an employee’s workweek which causes some of the working time to fall within hours that are included in both the old and new workweek, the employee’s pay is calculated as follows:
a. First, assume that the overlapping hours are to be counted as hours worked only in the old workweek and not in the new; compute straight-time and overtime compensation due for each of the 2 workweeks on this basis and total the two sums.
b. Next, assume that the overlapping hours are to be counted as hours worked only within the new workweek and not in the old; complete the total computation accordingly.
c. Then, pay the employee an amount not less than the greater of the amounts computed by methods a and b above.
[Renumber 444.233 as 443.233 and revise the text to read as follows:]
443.233 Full-time Employees
The FLSA workweek for full-time employees is 168 consecutive hours established as follows;
a. For an employee whose regular schedule includes Saturday as a service day, the FLSA workweek begins 8 hours prior to the beginning of the employee’s regular schedule for that service day.
Example 1: Full-time Employee A has a regular schedule starting time of 11:00 p.m. Friday night. By definition, the employee’s Postal Service workday is Saturday. Based on the FLSA workweek definition, the employee’s FLSA workweek begins at 3:00 p.m. Friday.
Example 2: Full-time Employee B has a regular schedule starting time of 1:00 a.m. Saturday. By definition, the employee’s Postal Service workday is Saturday. Based on the FLSA workweek definition contained in 443.231, the employee’s FLSA workweek in this situation begins at 5:00 p.m. Friday.
b. For an employee whose regular schedule does not include Saturday as a service day, the FLSA workweek is established by considering Saturday as if it were a service day in the workweek with the employee’s regularly scheduled starting time. Thus, the employee’s FLSA workweek begins 8 hours prior to this Saturday service day starting time.
Example 3: Full-time Employee C has Saturdays and Sundays off and her first scheduled workday is Monday at 6:00 a.m. For purposes of establishing the FLSA workweek, 6:00 a.m. is considered as a Saturday service day starting time. Based on the FLSA workweek definition above, the employee’s FLSA workweek begins at 10:00 p.m. Friday.
[Renumber 444.234 as 443.234 and revise the text to read as follows:]
443.234 Part-time Employees
The FLSA workweek for part-time employees is 168 consecutive hours established as follows:
a. The employee’s normal starting time, as established by the installation head (for a part-time regular, this is his or her regularly scheduled starting time), is used as the basis for establishing the FLSA workweek by considering such starting time as if it were a Saturday service day starting time. The beginning of the FLSA workweek is 8 hours prior to this Saturday service day starting time, but in no case does it begin prior to 8:00 p.m. Friday.
Example 1: Part-time flexible Employee E normally reports to his pay location at 11:00 p.m. For purposes of establishing the FLSA workweek, the 11:00 p.m. starting time is considered a Saturday service day starting time, i.e., 11:00 p.m. Friday night. When the above FLSA workweek definition is applied, the employee’s FLSA workweek begins at 8:00 p.m. Friday.
Example 2: Part-time flexible Employee F normally reports to her pay location at 3:00 p.m. For purposes of establishing the FLSA workweek, the 3:00 p.m. starting time is considered a Saturday service day starting time. Applying the above FLSA workweek definition, the employee’s FLSA workweek begins at 7:00 a.m. Saturday.
Example 3: Part-time regular Employee G is regularly scheduled to report to his pay location at 6:00 p.m. For purposes of establishing the FLSA workweek, the 6:00 p.m. starting time is considered a Saturday service day starting time. Applying the above FLSA workweek definition, the employee’s FLSA workweek begins at 10:00 a.m. Saturday.
[Renumber 444.3 and 444.31 as 443.3 and 443.31 as follows:]
443.3 Exemptions
443.31 Policy
[Renumber 444.311 as 443.311 and revise the text to read as follows:]
443.311 General
The FLSA exempts from its overtime provisions any employee whose work qualifies the employee as a bona fide executive, administrative, professional, outside sales, computer, or highly compensated employee. The Postal Service applies these classifications consistently, according to the requirements set forth in the FLSA and FLSA regulations.
[Renumber 444.312 as 443.312 and revise the text to read as follows:]
443.312 Postal Service Administration
FLSA classification determinations are made by the office of Organizational Effectiveness.
[Delete sections 444.313, 444.32, 444.321, 444.322, 444.323, and 444.324 in their entirety.]
[Renumber 445, 445.1, and 445.11 as 444, 444.1, and 444.11 as follows:]
444 Rural Letter Carrier Compensation
444.1 Regular Rural Carriers
444.11 Guaranteed Annual Wage
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[Renumber 445.12 as 444.12 and revise the second sentence to read as follows:]
444.12 Base Rate of Pay
***Hours worked in excess of 12 hours a day, or 56 hours in an FLSA workweek, are payable at 150 percent of the carrier’s regular rate.
[Renumber 445.2 as 444.2 and revise the text to read as follows:]
444.2 Other Rural Carriers
Rural carriers who are not covered under the guarantee provisions of Section 7(b)(2) of the FLSA are compensated at the rate for a 40-mile route in accordance with the compensation provisions in 433 and 434.
[Renumber 446 as 445 as follows:]
445 Compliance Investigations
[Renumber 446.1 as 445.1 and revise the text to read as follows:]
445.1 DOL On-site Visit
If a properly identified DOL Wage and Hour Inspector visits a postal facility, the following should be noted:
a. The FLSA requires that records regarding pay, hours worked, and related data be open at any time for review by DOL Wage and Hour Inspectors.
b. All site visits or inquiries by a DOL Wage and Hour Inspector must be reported immediately to the district Human Resources manager.
c. The district Human Resources manager must contact the area law office when informed that a DOL Wage and Hour Inspector is conducting an audit.
d. The installation head (or designee) is expected to be cooperative. After consulting with the district Human Resources manager, he or she should answer all specific and reasonable questions related to pay practices in the facility and provide the pertinent data requested.
e. Requests for general information or data that is not available at the installation should be referred to the district Human Resources manager.
[Renumber 446.2 as 445.2 and revise the text to read as follows:]
445.2 DOL Findings
Ask DOL Inspectors to provide a written report of any informal allegation of FLSA violations and investigative findings to the district Human Resources manager and the installation head (or designee).
[Renumber 446.3 as 445.3 and revise the text to read as follows:]
445.3 Postal Service Actions
Upon receipt of the FLSA report:
a. The installation head should forward comments and recommendations related to the allegations and findings to the district Human Resources manager.
b. The district Human Resources manager should send copies of investigative reports and all related correspondence to Headquarters Compensation and the area law office.
In accordance with the Donovan vs. Postal Service settlement agreement, the Postal Service will be afforded the opportunity to rectify an FLSA violation prior to the filing of any complaint or other formal enforcement action by DOL.
Note: The installation head does not have the authority and cannot agree to any proposed remedial measure prior to consulting with the district Human Resources manager, Headquarters Compensation, and the Law Department.
* * * * *
We will incorporate these revisions into the next online update of the ELM, which is available on the Postal Service PolicyNet website:
n Go to http://blue.usps.gov.
n Under “Essential Links” in the left-hand column, click PolicyNet.
n Click Manuals.
The direct URL for the Postal Service PolicyNet website is http://blue.usps.gov/cpim.
— Compensation and Benefits,
Human Resources, 7-24-14
