6.17—Overtime Compensation and/or Compensatory Time Off

Policy Number: 6.17
Title: Overtime Compensation and/or Compensatory Time
Off Effective: 05/01/2015
Senate Proposal: No
Responsible University Officer: Vice President for Administration
Responsible Office: Human Resources

Policy Statement

Michigan Technological University complies with the Fair Labor Standards Act of 1938 (as amended) (FLSA) in calculating and paying overtime and compensatory time off for non-exempt employees who are not subject to a bargaining unit contract. Overtime is administered according to the following:

• Time and one-half the regular straight time rate will be paid for all time worked in excess of eight hours per day in their primary position at Michigan Tech and/or forty hours per week for any hours over forty.
• The overtime requirement may not be waived by agreement between the employer and employees under any circumstances.

Policy Requirements

1. All overtime work must receive prior approval from the supervisor before the hours are worked. However, when an employee works overtime even without approval of the supervisor, overtime will be paid in compliance with applicable laws.
2. Overtime work cannot be worked on a voluntary basis. Employee requests for overtime may or may not be granted at the discretion of the supervisor.
3. To meet business needs, in some cases supervisors may require an employee to work overtime. Supervisors should provide advance notice to the employee concerning the date and hours of overtime that would be required. In some circumstances, an employee may be required to work overtime without advance notice.
4. A supervisor has the option of offering to an eligible employee compensatory time off with pay, rather than overtime payment.  This arrangement must be mutually agreed upon and documented in writing. All hours granted as time off with pay for hours worked in excess of forty hours per week or 8 hours per day are to be considered as compensatory time off and scheduled as one and one-half hours for each overtime hour worked.
5. The employee decides whether they want to receive overtime pay or compensatory time off.  An employee should make a request for compensatory time off in lieu of overtime pay before the performance of an overtime assignment. A supervisor cannot require that an employee take compensatory time off. Compensatory time off must be paid out to an employee if the employee leaves the department or the University.
6. When an employee is employed by the University in more than one capacity, all time worked or paid must be combined, and total hours in excess of forty per work week must be compensated at the overtime rate.

Reason for the Policy

This policy ensures compliance with the FLSA with regard to overtime payment and compensatory time off for regular, non-exempt employees who are not subject to a bargaining unit contract as defined by the FLSA.

Related Policy Information

Calculating Overtime for Employees with One Position at Michigan Tech

Overtime compensation is paid at the rate of one and one-half times the regular straight time rate for all time worked in excess of eight hours per day in their primary position at Michigan Tech and/or forty hours per week for any hours over forty. (See Appendix A)

Calculating Overtime for Employees with Multiple Positions at Michigan Tech

When the employee’s multiple positions are overtime eligible, the hours worked in each position must be considered together in determining if the overtime threshold has been met and the overtime rate of pay paid. (See Appendix B).

Calculating Compensatory Time Off

The method of calculating compensatory time off is the same as calculating overtime. Records must be maintained in the department so that the supervisor and employee are aware of any remaining compensatory time off balances. Records must also be maintained detailing use of compensatory time off.  The records are managed by the supervisor and the employee.

The FLSA allows the accumulation of up to 240 hours of compensatory time off.

If an employee leaves a department or the University with a balance of compensatory time off, the time must be paid out to the employee at the one and one-half rate. The department that the employee is leaving is responsible for payment.

Exclusions

• Staff and faculty who are considered as exempt as defined by the FLSA are not covered by this policy.
• Casual/temporary, as well as seasonal and student employees, are not covered by this policy. However, Michigan Tech will follow the FLSA as it applies to these employees.
• Employees subject to a bargaining unit contract are not covered by this policy.
• If the employee and supervisor agree to a flextime working arrangement, overtime will not apply to hours worked in excess of eight hours per day and will be paid for hours worked in excess of forty hours in a work week.
• Faculty members are to refer to Appendix C of the Tenured/Tenured-Track Faculty Handbook and represented employees are to refer to their contract for overtime.

Contacts

Definitions

Compensatory Time Off – Leave time in lieu of overtime payment at the calculation of one and one-half hours for each hour of overtime worked. There is a written, voluntary agreement that is obtained before the compensatory time is earned.  Compensatory Time Off is managed within the department between the supervisor and the employee.

Exception Time – Leave time from work taken, which includes, but is not limited to: sick, holiday, bereavement, and vacation.

Non-Exempt Employees – Employees who are eligible for the overtime payment requirements of the FLSA.

Non-Exempt Hourly Employees – Employees who are covered by the overtime pay requirements of the FLSA are paid by the hour, and are required to account for all hours and fractional hours worked.

Non-Exempt Salaried Employees – Employees who are covered by the overtime pay requirements of the FLSA and are paid a salary that is deemed to cover 40 hours worked each week.

Overtime Payment – Compensation, either by earnings or compensatory time off, at the rate of one and one-half time and is based on time actually worked in excess of the first forty hours, and/or hours worked in excess of eight hours in a day in their primary position at Michigan Tech.

Overtime Work – Hours that a non-exempt employee is paid over the first calculated forty hours during a work week and hours worked in excess of eight hours in a day, which may include vacation, sick time, personal days, bereavement days, holidays, and official University closures.

Work Week – Seven consecutive days beginning at 12:01 a.m. on Sunday and ending 168 hours later at 12 midnight on the following Saturday.

Responsibilities

Department

• Records and maintains records of compensatory time for non-exempt employee
• If a non-exempt employee is leaving a department, that department is responsible for the payout of the compensatory time off payment

Non-Exempt Employee (Salaried and Hourly)

• Maintains a daily record of actual hours and specific times worked and exception time used, either using a time clock, time sheet, or online time entry
• Ensures all overtime is approved by their supervisor before the hours are worked
• Determines whether they want overtime pay or compensatory time off, if offered, and makes a request for compensatory time off in lieu of overtime pay before the performance of an overtime assignment
• Tracks earned and paid compensatory time off
• Monitors hours worked to avoid unintended overtime work and pay

Supervisor

• Ensures employees comply with this policy
• Confirms overtime hours worked have received prior approval
• Tracks earned and paid compensatory time off
• Monitors hours worked to avoid unintended overtime work and pay
• Certifies all reported hours are correct

Appendices

Appendix A - Calculating Overtime for Employees with One Position at Michigan Tech

Appendix B - Calculating Overtime for Employees with Multiple Positions at Michigan Tech

Adoption Date

Revisions