Overtime
Overtime is defined by the FLSA as time worked over 40 hours in a workweek. Overtime is not determined on a daily basis. Hours worked in excess of eight hours in a day are not considered overtime. Only hours worked over 40 hours in a workweek are considered overtime. For individuals who work part-time schedules, overtime pay is not accrued until more than 40 hours are worked. Time on leave such as annual, sick, bonus, holiday, military reserve duty, educational, and family and medical leave does not count toward the 40 work hours per week that is required for overtime pay. Supervisor approval is required prior to working beyond an employee’s assigned work schedule.
Example: Employee is regularly scheduled to work for 30 hours per week (.75 FTE). The employee works 41 hours. He / she would earn 40 hours straight pay + 1 hour of overtime or comp-time (one and one-half times the regular rate) is accrued.
Overtime Pay:
Overtime is paid at time and one-half the “regular hourly rate” after 40 hours of work in a workweek. This rate is a complex calculation which includes payment for longevity, shift premiums, and similar pay supplements. Supervisor approval is required prior to working hours beyond an employee’s assigned schedule.
Only non-exempt employees, who regularly report time, are eligible for overtime pay. However, at NC State, comp time is used in lieu of overtime pay in most cases.
Comp Time
Public universities, such as NC State, may compensate overtime-eligible employees through the use of compensatory time off (or “comp time”) in lieu of overtime pay. If an overtime-eligible public employee receives comp time instead of overtime pay, the comp time must be credited at 1.5 hours of comp time for each hour of overtime worked. Supervisor approval is required prior to working hours beyond an employee’s assigned schedule.
Example: An admissions counselor is scheduled to work Monday – Friday, 8:00 am – 5:00 pm, (40 hours per week). During a one-week period when admissions work is heavy, with supervisor approval, the advisor works 50 hours and accumulates a total of 10 additional hours of work during that week. This results in 15 hours of comp time (10 work hours x 1.5). The advisor then uses the comp time to take time off later in the year.
Comp time must always be used PRIOR to use of annual or bonus leave. Supervisors should encourage employees to take comp time as soon as possible; and use of comp time cannot be denied to an employee unless the comp time off will unduly disrupt operations.
If not used, comp time is paid out:
- 365 days after it is earned;
- If the amount earned exceeds 240 hours; or
- On a monthly basis at the discretion of unit leadership.
Steps to Control Overtime & Comp Time
Supervisors are responsible for compliance as well as control of overtime costs. Non-compliance puts the University at risk for lawsuits, back pay, and the loss of grant opportunities.
A supervisor may prohibit employees from working outside of their regular schedule. Supervisors must approve, in advance, any extra hours to be worked. However, if an employee works additional hours without approval, compensation must still be provided in comp time or overtime pay. Working additional hours without supervisor approval may result in disciplinary action.
To minimize overtime and comp time accruals and/or payouts, supervisors should work with their Human Resources departments to consider the following strategies:
- Review the overtime expenditures in your department for the current fiscal year to determine how much is being spent, and for which positions.
- Review job descriptions and tasks for positions. Some positions that are exempt may become non-exempt if taking on primarily non-exempt duties. Consider consolidating exempt-level duties into fewer positions to strengthen key positions in your organization.
- Ensure that employees are accruing and appropriately using comp time rather than being paid out.
- Consider hiring additional temporary or permanent employees to minimize overtime of current employees who consistently work more than 40 hours per week (if economically feasible). This may also prevent burnout and improve productivity and safety.
- Ensure that budget planning in grant proposals accounts for the additional costs of future overtime for employees.
- Use different work schedules and shifts to meet work demands. For example, change an 8:00 am – 5:00 pm schedule to 12:00 pm – 8:00 pm if regular responsibilities occur after normal business hours.
- Cross-train employees to reduce the dependency on employees who are required to work overtime due to their expertise in specific areas.
- Reduce FTE for positions where 40 hours are not regularly required to meet business needs.
- Use flexible scheduling to accommodate occasional hours outside of the typical scheduled workweek; for example, flex an employee’s schedule to meet weekly work demands, such as 8:00 am – 5:00 pm Monday, 1:00 pm – 9:00 pm Tuesday, 8:00 am – 5:00 pm Wednesday – Friday.
- Plan for cyclical and seasonal activity. If an employee works excessive hours in the summer but is not as busy in the winter, the employee can accumulate compensatory time in the summer and then take time off in the winter.
Extra Time
Extra time is earned during a week where the employee has worked less than 40 hours but has accounted for more hours than required for the week. Extra time accrues at an hour-for-hour (straight time) rate.
Example: if an employee is regularly scheduled to work 30 hours (0.75 FTE), but, he/she works 32 hours, then he/she would be compensated for the two hours at straight time because the threshold of 40 hours per week was not crossed.
Exemptions from Overtime
There are special provisions for some police and fire employees. These departments work with Human Resources to establish alternative work schedules and ensure proper payment.