Overtime & Compensatory Time Off for SHRA Non-Exempt Employees
Eligible employees who work more than 40 hours in a work week may be compensated in one of two ways: overtime pay or compensatory time off. It is management’s decision whether to provide overtime pay or compensatory time off based upon fiscal availability and operational needs of the work unit.
All SHRA permanent and temporary employees who are subject to the wage-hour provisions of the Fair Labor Standards Act (FLSA non-exempt) are entitled to overtime compensation.
SHRA Permanent Employees: The wage-hour status is based upon the FLSA exemption status of the employee’s position as determined by the Office of Human Resources. All permanent “SHRA non-exempt” employees are eligible to receive either overtime pay or compensatory time off. All permanent “SHRA exempt” employees are not eligible for overtime pay or compensatory time off under this policy. (However, see “Compensatory Time for SHRA Exempt Employees” in the “Related Subjects” section below.)
SHRA Temporary Employees: All SHRA temporary employees, including student employees, are FLSA non-exempt and are eligible to receive only overtime pay; they cannot receive compensatory time off.
EHRA Employees: EHRA employees, both permanent and temporary, are not eligible for overtime pay or compensatory time off.
Eligible employees earn time-and-one half for all hours worked in excess of 40 hours in a work week. An employee must actually work over 40 hours to earn overtime compensation. Paid time that is not considered time worked (eg, most leave or paid time off packages) does not count as time worked for the purpose of determining employee eligibility for overtime compensation.
Working more than eight hours in a work day does not necessarily constitute overtime. Overtime occurs only after working more than 40 hours in a work week.
Management should give as much advance notice as possible of the need to work overtime so that employees can make any arrangements necessary to enable them to perform the overtime work. Management must ensure that funds are available before authorizing overtime work.
Note: Some work units may require occasional or regular mandatory overtime as a condition of employment. Such a requirement must be explained to job candidates during the interview and selection process.
If an employee works more than his/her regular schedule on one day in work week, management may allow or direct the employee to take off an equal amount of time during the same work week (without charge to leave) so that the total work time does not exceed 40 hours for the work week. The University does not have a policy that allows equal time off (hour for hour) in another week.
(See Determining Time Worked)
When management selects the paid overtime option, an eligible employee who works more than 40 hours in a work week is paid overtime at the rate of “time-and-one-half” for all hours worked over 40. The overtime pay is determined using the employee’s regular rate of pay.
- See “Wage-Hour Definitions” in the Related Subjects section below for definitions of hourly rate and regular rate.
- See the “Calculating Overtime Pay” in the Related Subjects section below for examples of how overtime pay is calculated.
The additional pay is to be included in the paycheck for the pay period in which the overtime was worked. Lack of funds does not relieve a department from its liability to compensate overtime work at the rate of time-and-one-half.
If overtime pay is not possible due to budgetary constraints (or for other reasons), compensatory time off is a second option for compensating employees for overtime. Management considers existing workloads, staffing requirements, and availability of funds in deciding which compensation option will be used.
- All permanent SHRA non-exempt employees are eligible to receive either overtime pay or compensatory time off.
- All temporary SHRA employees are eligible to receive only overtime pay; they cannot receive compensatory time off.
Compensatory time off is paid time off equal to one-and-one-half times the amount of time worked in excess of 40 hours in a work week.
For example: An employee who works 44 hours in a work week would receive the 40 hours of pay and 6 hours of compensatory time off (4 hours x 1.5).
When the compensatory time option is selected, the time off must be scheduled by the supervisor. Every effort should be made to accommodate the preference of the employee when scheduling compensatory time off. Compensatory time off may be used for any purpose. (See “Determining Time Worked” for a prioritized list of leave/paid time off use.)
The maximum amount of compensatory time off an employee may carry at any time is 240 hours (160 hours of work x 1.5) pro-rated for part-time employees. Any overtime in excess of the 240 hour maximum cannot be considered compensatory time off; instead, the overtime must be paid in the employee’s next paycheck.
Compensatory time off must be taken 12 months of the date on which it was accrued. If management is not able to schedule the compensatory time off within this time period, the liability must be paid to the employee no later than in the next pay cycle following the end of the 12 months. (See “Determining Time Worked” for a prioritized list of leave/paid time off use.)
Note: If an SHRA non-exempt employee is scheduled for a period of leave (voluntary shared leave, Family & Medical Leave, leave without pay, etc.), and will not be able to use (or chooses not to use, if eligible) earned compensatory time off or other accrued paid time off due to expire during the absence, then all such paid time off must be paid out as its expiration date occurs. (Note that the employee cannot use other available leave if s/he has any available paid time off. See Determining Time Worked for details on prioritized application of leave and paid time off.)
When an employee leaves the University or transfers to another University department, the department the employee is leaving must pay the employee for all accumulated and unused compensatory time off.
Employees whose FLSA status changes from Non-Exempt to Exempt must be paid for all accumulated and unused compensatory time off at the time of the status change.
Each department is responsible for recording and monitoring paid overtime and compensatory time off for its employees.
See “TIM Website” in the Related Subjects section below for information on recording overtime pay or compensatory time off.
Paid Overtime: Overtime hours to be paid to an employee must be recorded on the Employee Time Record as hours worked.
Accrued Compensatory Time Off: When an employee accrues compensatory time off, the hours in excess of 40 must not be placed in the hours table on the Employee Time Record. Instead, the employee must note in the Explanation section of the Employee Time Record that additional hours were worked that have resulted in compensatory time off. The note should also include the amount of compensatory time off generated and the date by which the compensatory time off must be used.
Example: “3 additional hours worked on 09-10-2007 for a total of 4.5 hours of CT to be used by 09-15-2008 [the last date of the pay period].”
Coding Compensatory Time Off: When an employee uses accrued compensatory time off, s/he writes the number of hours in the “Coded Hours” column of the Employee Time Record and places “CT” in the “Code” column. S/he should also note in the Comments section from where the compensatory time off came and if any is remaining.
Example: “2 hours of compensatory time taken 10-31-2007; 2.5 hours remaining to be used by 09-15-2008.”
If you have questions about this policy, contact the Classification and Compensation Specialist in the Office of Human Resources assigned to work with your department.
See also: Overtime & Compensatory Time for SHRA Exempt Employees