Wage Hour Definitions
The University Wage-Hour provisions conform to the requirements of both the Fair Labor Standards Act (FLSA) and the State’s “Policy on Hours of Work and Overtime Compensation.” It covers SHRA employees, both permanent and temporary. Deans, directors, department heads and other supervisory personnel are responsible for assuring compliance with Wage-Hour provisions. Violation of University Wage-Hour provisions may result in disciplinary action.
The Department of Labor and US courts interpret the FLSA regulations by first assuming that employees and positions are nonexempt. Therefore, the employer is required to demonstrate that exempt status can be substantiated based on the Department of Labor’s narrow exemption criteria.
At UNC-Chapel Hill, the Office of Human Resources’ Classification and Compensation Department make the determination of FLSA regulations status. The determination is based on the nature and the requirements of work performed and is not directly related to job title or to competency level. Failure to comply with the FLSA regulations carries substantial legal risk.
The work day is the 24-hour period beginning at 12:00 a.m. (midnight) and ending at 11:59 p.m.
Working more than eight hours in a work day does not necessarily constitute overtime. Overtime occurs only for time worked in excess of 40 hours in a work week.
For work shifts that cross the day-divide, the day of the week on which the majority of the hours on the shift occur shall be considered the work day for the purposes of determining work schedules, work weeks, overtime eligibility, and holiday pay eligibility.
Break periods are not required by the Fair Labor Standards Act (FLSA). However, as operational requirements permit and working conditions warrant, management may allow employees to take one 15-minute paid break during any work period of four consecutive hours. In certain occupations, as deemed necessary for safety and health reasons, management may allow more than one break period per four hours as needed or require break periods at specific times of the day. Break periods are counted as work time.
Break periods may not be combined with a defined meal period or with another break period, may not be used to report to work late or leave early, may not be used in conjunction with any type of leave. Break periods do not accrue. If breaks are not taken during their specified time frames, they are lost.
Neither Federal law nor University policy require a meal period for each employee. However, a typical employee work schedule provides for a meal period as determined by management and based on operational needs. Management may set defined meal periods for all employees as operational needs may warrant.
A “meal period” is defined as at least 30 consecutive, uninterrupted minutes free from work-related duties. (Management may approve meal periods of greater length; the standard University meal period is one hour.)
Management may allow employees to take their meal periods at their work stations or may require employees to take their meal periods away from their work stations.
If an employee is required (or is permitted) to perform work during his/her meal period, and if that work does not allow for 30 consecutive, uninterrupted minutes for the meal period, then all of the time that had been considered the meal period must be considered work time. This applies to all non-exempt employees, both permanent and temporary.
Management may approve adjustments the length of an employee’s meal period to accommodate the employee’s work/life events, so long as operational needs continue to be met.
- Minimum Hourly Rate
The minimum hourly rate for student employees (including College Work-Study Program students) is the Federal minimum wage ($7.25 an hour, effective July 24, 2009).
The minimum hourly rate for temporary and permanent SHRA employees is lowest hourly rate on the State Salary Plan ($10.61 per hour, effective July 1, 2007).
- Hourly Rate
The hourly rate for a permanent employee is calculated by Payroll Services. The rate is set based on the employee’s annual salary divided by the number of regularly scheduled work hours in the fiscal year (July 1 through June 30). Because the total number of work hours may vary from year to year, the hourly rate for the employee will also vary from year to year. This method ensures that employees receive their full annual salary amount each fiscal year.
- Regular Rate
The employee’s regular rate is determined by dividing the employee’s straight-time earnings for the work week (including any shift premium pay, on-call pay and longevity pay) by the total number of hours worked during that week. The regular rate is used in calculating overtime compensation.
The federal Fair Labor Standards Act sets guidelines for determining which employees are subject to the overtime provisions of the Act (FLSA non-exempt) and which employees are not subject to the overtime provisions of the Act (FLSA exempt). Non-Exempt and Exempt status are determined in the Office of Human Resources by the Classification and Compensation Specialist at the time a position is established or reallocated.
SHRA Non-Exempt Employees
Employees who are subject to the State Personnel Act (“SHRA” employees) and who are not exempt from the overtime provisions of the Fair Labor Standards Act (FLSA non-exempt) receive overtime compensation, calculated at the rate of time-and-one-half for all time worked in excess of 40 hours during a single work week. These employees are generally called “SHRA non-exempt” when discussing human resource policy issues.
SHRA Non-Exempt part-time employees
Employees who are regularly scheduled to work part-time hours may accrue “gap hours.” These hours are any time worked between their regular scheduled number of hours and 40 hours. These hours are paid on an hour-for-hour basis at their regular hourly rate. Departments should monitor gap hours in determining whether an employee’s regular schedule should be increased or decreased.
All SHRA temporary and student employees are non-exempt. A “student” is any person currently attending courses, or who is registered for classes for the next regular Fall or Spring semester, and who is not interested in (or available for) permanent, full-time employment at this time. Permanent employees who are also students are not considered students for the purposes of this policy.
SHRA Exempt Employees
Employees who are subject to the State Personnel Act (“SHRA” employees) and who are exempt from the overtime provisions of the Fair Labor Standard Act are not eligible to receive time-and-one-half compensation for overtime hours. These employees are generally called “SHRA exempt” when discussing human resource policy issues.
The exemption status is based on an evaluation of the duties and responsibilities, which may offer an exemption if the position is considered to meet both a salary threshold requirement and the position meets either an executive, administrative, professional (typically professionally licensed SHRA classifications) or a certain computer-related exemption.
Work schedules for each employee are defined by management based on operational needs. Each supervisor is responsible for managing hours worked through such measures as:
- Establishing and communicating work schedules for employees. Schedules should be established to meet departmental operating needs, but whenever possible should be flexible enough to meet employees’ needs as well.
- Managing work time so that Non-Exempt employees do not perform unscheduled work that results in an overtime liability. Because of wage-hour concerns, Non-Exempt employees must perform work only during their regular work schedule unless changes have been approved in advance by management or in the case of a bona fide emergency.
- Approving as appropriate any change of an existing work schedule, including overtime work, paid leave, flexible work schedules, or leave without pay. In most cases, changes should be approved in advance.
- Hours worked by an employee without management’s permission or knowledge normally will be counted as hours worked if department management knew or should have known of this work.
- Employees do not have the discretion to change their work schedules without advance approval of their management. Failure to follow an established work schedule may result in disciplinary action, up to and including dismissal.
The University’s official wage-hour records, required by the Fair Labor Standards Act, are retained by the Time and Attendance System. Department management has direct responsibility for maintaining accurate work time and leave records for its employees. A falsified “Employee Time Entry” violates State and University policy. Anyone who knowingly enters, certifies, or approves a falsified time-keeping record is subject to disciplinary action, up to and including dismissal.
Time Information Management (TIM) System
The Time Information System (TIM) is used to track work hours, special pay, and leave for University employees. All leave programs for both SHRA exempt and SHRA non-exempt employees are currently tracked through the TIM system.