Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

The fiscal impact could be $37.47 per hour ($281 per day) based on the average salary for higher education classified non-exempt employees working during holidays to $413,000 per holiday, depending on the circumstances. For non-exempt employees earning overtime pay for working on a weekend, the cost could be $24.98 per hour ($187.35 per day) based on the average salary for classified non-exempt employees to $275,000 per holiday, depending upon the circumstances. It is estimated that the annual estimated cost would be approximatley $1.7 million.

Fiscal Note Detail

Effect of Proposal	Fiscal Year
Effect of Proposal	2011 Increase/Decrease (use"-")	2012 Increase/Decrease (use"-")	Fiscal Year (Upon Full Implementation)
1. Estmated Total Cost	0	1,700,000	1,700,000
Personal Services	0	0	0
Current Expenses	0	0	0
Repairs and Alterations	0	0	0
Assets	0	0	0
Other	0	0	0
2. Estimated Total Revenues	0	0	0

Explanation of above estimates (including long-range effect):

There are 5,098 full-time equivalent higher education classified employees with an average salary of $32,751, which converts to $16.79 per hour using 1,950 hours in a work year. Of these employees, 1,469 are exempt from overtime with a $21.72 average hourly rate, using 1950 hours in a work year. This rate multiplied by 1.5 equals $32.58 per hour. There are two designations of higher education classified employees: (1) Non-Exempt Employees, those who are entitled to overtime benefits as outlined in federal and state law; and (2) Exempt Employees those who are not covered by the Fair Labor Standards Act (FLSA) for overtime purposes. (1) Non-Exempt Classified Employees: Under current policies and law, non-exempt classified employees who work more than 40 hours per week at the employer’s request, whether during the workweek (Monday through Friday), or on Saturdays and Sundays, are compensated at the discretion of the employee either by (1) being granted 1.5 hours of compensatory time for each hour worked over 40 hours per week; or (2) They are paid 1.5 times their hourly rate for each hour worked over 40 hour per week. If these employees work on a holiday, they are entitled to compensatory time at 1.5 times the number of hours worked or to be paid at 1.5 times their hourly rate. (2) Exempt Classified Employees: Under current policies and FLSA, exempt classified employees are not entitled to overtime pay for working more than 40 hours per week. They are, however, entitled to compensatory time for hours worked on holidays on an hour for hour basis. (3) Legal Holidays: Currently, there are twelve holidays stipulated in W. Va. Code, not counting election days. Pursuant to higher education policies, six holidays are to be taken on the calendar day. If HB 2389 were enacted, higher education institutions could potentially be liable to pay 1.5 times the hourly rate of each exempt classified employee working on a holiday. Based on the average hourly rate of $21.72 for the 1469 classified higher education employees, this would result in a fiscal impact of approximately $413,000 per holiday. ($359,000 in salary costs, plus $54,000 in benefits) if all classified employees are required to work. It is likely that no additional costs would be associated with the weekend provisions of the proposed legislation for non-exempt employees. If the legislation is enacted, the institutions may require employees to work one-half day or full day blocks on the weekends. The costs for exempt employees would be calculated at their regular hourly rate of pay. This would result in a fiscal impact of approximately $275,000 ($239,000 in salary costs, plus $36,000 in benefits). Costs could be minimized through the use of adjusted work schedules. It is estimated that approximately 5 perent on average of the exempt classified employees would receive additional pay as a result of this bill. The annual estimated cost would be approximatley $1.7 million.

Memorandum

Person submitting Fiscal Note: Ed Magee
Email Address: emagee@hepc.wvnet.edu