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USA Operations Centers Overtime Pay & Flex Time May 2017
As this policy is reviewed, please note the following State/Area for which exceptions exist:
Alaska, California, Kentucky, Nevada
Specific details on each exception may be found within the General Information section of this text.
There may be occasions where an employee is asked, or volunteers, or is required to work additional hours beyond his or her regular work hours or additional days beyond his or her regular work week due to business needs or other requirements. This policy discusses overtime pay and flex time.
The general standard for overtime pay is that non-exempt/overtime eligible employees receive overtime pay (at 1½ times the employee’s regular rate of pay) for hours worked above 40 in the standard workweek. A few states – Alaska, California, Kentucky, and Nevada – have daily or other unique overtime pay requirements and managers in those states need to familiarize themselves with the daily or other overtime requirements of their respective states’ laws.
Who is eligible?
Non-exempt employees are subject to overtime requirements as a result of federal and state (as applicable) wage and hour laws. Therefore, non-exempt employees are paid for any overtime hours worked. These employees are referred to as “non-exempt/overtime eligible” in this chapter.
Exempt employees are employees who, because of their positional duties and responsibilities, are “exempt” from the overtime provisions of federal and state (as applicable) wage and hour laws and as such are not paid overtime.
Regular Rate of Pay For non-exempt/overtime eligible employees, the “regular rate of pay” generally is the employee’s agreed-upon compensation expressed as a rate per hour or hourly rate. The regular rate of pay is what is used to calculate overtime compensation. If during the same week when overtime pay is earned an employee is also receiving Bilingual pay and/or Shift Differential pay and/or Location Cost Differential pay for example, then these additional payments are included in the regular rate of pay in order to calculate the overtime pay due for that particular week.
Note: the Fair Labor Standards Act (FLSA) weighted average method is used to calculate overtime pay including when an employee receives shift pay for one or more days during the week and also has overtime for that same workweek. The FLSA weighted average method is also used to calculate overtime pay when an employee receives Bilingual pay or Location Cost Differential pay for example and also has overtime for that same workweek.
In summary, because this employee works in Alaska or California, he or she is eligible for “daily” overtime pay for the 2 hours worked beyond 8 hours on Monday. The employee will receive 39 hours of pay at the employee’s regular rate of pay and 2 hours of overtime pay for the 2 hours worked beyond 8 hours on Monday, for a total of 41:00 hours of pay this week. Note: If this employee worked in a state that did NOT have daily overtime laws, the employee would receive 40:00 hours of pay at the employee’s regular rate of pay (instead of 39 hours of regular pay) and 1 hour of overtime pay (instead of 2 hours of overtime pay) for a total of 41:00 hours of pay this particular workweek.
Public employers (such as government agencies) are allowed to offer “comp time” to employees, i.e., time off with pay in a future week in lieu of the employee being paid at their overtime rate of pay for hours worked beyond 40 hours in the current week. However, private organizations in the U.S., such as Joyner, are prohibited from offering “comp time”, i.e., paid time off in the future, in lieu of paying employees for their overtime hours worked over 40 hours in the week, even if the employee requests to exchange their overtime pay earned for hours worked beyond 40 hours in the current week for time off with pay in a future week.
Flex Time or Alternative Work Arrangements (AWAs) The prohibited practice of “comp time” or “banking overtime”, i.e., exchanging overtime pay earned for hours worked beyond 40 hours in the week for time off with pay in a future week, should not be confused with the legitimate use of flexible (“flex time”) or alternative work arrangements (AWAs).
Alternate Work Arrangements (AWAs) are a formalized form of “Compressed Workweek” arrangement which allow employees, with management approval, to work the equivalent of a five-day workweek in less than five full days or work the equivalent of a two-week pay period in less than ten full days. “Flex Time” is a less formal process that allows employees, with management approval, to work extra hours during the week due to a heavy work load, for example, and then take equivalent time off, i.e., “flex time” off without pay during the same week or same pay period, to offset all or some of the additional hours worked.
It’s preferable to take “flex time” off without pay during the same week when the additional hours are worked. However, with management approval, it is permissible to work additional hours in the first week of the pay period and then take time off without pay in the second week of the same pay period to offset some or all of the additional hours worked in the first week of the pay period.
It is acceptable to work additional hours and then take “flex time” off without pay, on another day WITHIN THE SAME PAY PERIOD as long as the following requirements are met:
The employee MUST receive pay for all hours actually worked during the pay period,
“Flex time” must be taken within the SAME PAY PERIOD when the additional hours are worked, AND
If the employee, for example, actually works more than 40 hours during the first week of the pay period, the employee MUST receive pay at the employee’s overtime rate of pay for any hours worked beyond 40 hours during the week, even if the additional hours worked are offset by taking “flex time” off without pay in the second week of the pay period. (In California, Alaska, and Nevada (In limited circumstances), daily overtime pay for hours worked over 8 would still apply.)
Flex Time Example: Full-time employee works 2 extra hours in week one of the pay period
A full-time non-exempt/overtime eligible employee in a state that does not have daily overtime generally works 8 hours per day Monday through Friday for a total of 40 hours per workweek and a total of 80 hours for the two week pay period. On Monday the employee is asked to work two additional hours for a total of 10 hours rather than his/her normal 8 hours.
Note: See the California State Exception Section below for information on "California Make-Up Time" pertaining to non-exempt/overtime eligible employees.
End of Overview
There may be occasions where an employee is asked, or volunteers, or is required to work additional hours beyond his or her regular work hours or work additional days beyond his or her regular work week due to business needs or other requirements. This policy discusses overtime pay and flex time.
Overtime Pay is determined by taking into consideration the following:
Employment Status
Time Worked
Time Not Worked
State Regulations
Federal Regulations
Eligibility
Part-time non-exempt/overtime eligible employees are eligible for overtime.
Full-time non-exempt/overtime eligible employees are eligible for overtime.
Exempt employees are not eligible for overtime.
Definitions
Non-exempt employees are subject to overtime requirements as a result of federal and state (as applicable) wage and hour laws. Therefore, non-exempt employees are eligible to receive overtime pay for overtime hours worked. These employees are referred to as “non-exempt/overtime eligible” employees in this chapter.
Exempt employees are employees who, because of their positional duties and responsibilities, are “exempt” from the overtime provisions of federal and state (as applicable) wage and hour laws and as such are not paid overtime.
Overtime Rate of Pay: The overtime rate of pay is the non-exempt/overtime eligible employee's regular rate of pay multiplied by 1 ½. In California, hours worked over 12 in a day are paid at twice the regular rate. When calculating overtime pay, any additional compensation such as Bilingual pay, Shift Differential pay or Location Cost Differential pay for example received during the same week when overtime pay was earned is also included in the overtime pay calculation. Note: The Fair Labor Standards Act (FLSA) weighted average method is used to calculate Overtime Pay, including when an employee receives Bilingual pay, Shift Differential pay or Location Cost Differential pay for example during the same week that overtime pay is received.
Overtime Hours: Those hours worked in excess of 40 hours per week, or hours worked beyond 8 hours per day in locations such as Alaska and California where daily overtime rates apply. Nevada employees who make less than one and one half times the Nevada minimum wage are also entitled to daily overtime pay.
Note: Kentucky employees are generally entitled to overtime pay for all work performed on the 7th day of the same workweek if they actually perform work on each of the seven consecutive days within the same workweek. However, even if the employee actually performs work on all seven days of the same workweek, if the total hours worked (including the hours worked on the seventh day) do not exceed 40 hours for the workweek, then the employee is not eligible for overtime pay for the hours worked on the seventh consecutive day of the same workweek. (See Kentucky Exception for more details.)
Overtime Threshold: The point at which the overtime rate of pay applies for hours worked. 40 hours per week, and/or 8 hours per day in Alaska, California, and in some instances Nevada.
Regular Hours: All hours worked that are paid at the regular rate of pay; i.e., straight time rate, including those worked between the Standard Workweek and the Overtime Threshold. Employees should have management approval anytime their work schedule varies from the Standard Workweek.
Joyner Standard Workweek: The workweek for all employees:
Begins on Saturday at 12:01 a.m.
Ends the following Friday at midnight.
Is 40 work hours in the U.S. for the majority of employees.
Joyner Overtime Threshold: The point at which Joyner pays 1 1/2 times the regular hourly rate of pay for hours worked (40 hours per week, or 8 hours per day for example in States such as Alaska and California, and in some instances Nevada, that have daily overtime rate requirements).
Compensatory Time The Fair Labor Standards Act (FLSA) currently permits public employers - i.e., governments and government agencies - to establish compensatory time systems. Since Joyner is not a governmental or public entity, we may not legally use a compensatory time program to compensate individuals for overtime worked. Compensatory time or "comp time" refers to the practice of compensating employees for overtime worked by awarding the employees paid time off to be taken at some future time. Central to the concept of comp time is the practice of allowing employees to "bank" the comp time awarded in lieu of cash compensation for overtime. The following summarizes the Company's position on compensatory time:
Comp time may not be used at Joyner in the U.S. to compensate non-exempt/overtime eligible employees for overtime worked
Banking of overtime is not permitted at Joynerin the U.S.
Employees who work a compressed work schedule cannot work their scheduled day off in order to "bank" time for future use
Any hours worked within a workweek must be counted and recorded as time worked during that same workweek and the employee must be paid for that time worked. The hours worked within one workweek CANNOT be carried over and counted in another workweek, even if the other workweek falls within the employee’s same two-week pay period.
For example: It is acceptable to work additional hours during week one of the pay period and, if workload permits, and with management approval, take time off without pay, during the 2nd week of the same pay period to offset some or all of the additional hours worked during the first week of the pay period. But, keep in mind that if employees work beyond 40 hours in the first week (or 2nd week) of the pay period, they MUST be paid at their overtime rate of pay for hours worked beyond 40 hours during the work week, even if the additional time worked beyond 40 hours is offset by taking flex time off without pay on another day (or days) within the same pay period.
Note: See the California State Exception Section below for information on "Make-Up Time" pertaining to non-exempt/overtime eligible employees.
“Retroactive Overtime Pay” Adjustment Overtime pay earned is not included in the “Current Annual Rate” of pay when calculating applicable incentive payments for the current performance period.
However, if a non-exempt/overtime eligible employee receives an applicable incentive and the employee also received overtime pay during the same performance period, then the employee’s “overtime rate of pay” and overtime pay owed must be recalculated to include an applicable incentive amount in the calculation for that performance period. This recalculation of the employee’s “overtime rate of pay” results in the employee receiving a “retroactive overtime payment”. This payment is generally received in the same pay check that includes the applicable incentive payment.
Alaska In Alaska, a non-exempt/overtime eligible employee’s regular rate of pay applies to the first 8 hours of time worked per day. Overtime rate of pay (1 1/2 times the regular rate of pay) applies to hours worked beyond 8 hours in a given workday. Overtime pay also applies to time worked in excess of 40 hours per week.
California In California, a non-exempt/overtime eligible employee is paid 1 1/2 times the regular rate of pay for hours worked over 8 hours per day. Overtime pay also applies to time worked in excess of 40 hours per week. If a non-exempt/overtime eligible employee works more than 12 hours in a day the employee receives 2 times the regular rate of pay for hours worked over 12 per day. In addition, if a non-exempt/overtime eligible employee works 7 consecutive days during the same workweek, the employee is paid 1 1/2 times the regular rate of pay for the first 8 hours and 2 times their regular rate of pay for hours worked beyond 8 hours on the seventh consecutive day of the same workweek. (Saturday through Friday) Note: For the “seventh consecutive day” premium pay to apply, the employee must actually perform work on each of the seven consecutive days of the defined workweek (Saturday through Friday). Paid absences do NOT qualify as “performing work”. For example, if during a workweek an employee works six of the seven days, but is off the entire day on one of the seven consecutive days for a Company Holiday, or takes a full day of Paid Time Off (PTO) then the “seventh consecutive day” premium does not apply. Note: If a non-exempt/overtime eligible employee in California works 9 hours on a particular day at a facility that has been declared officially closed, i.e., “Office Closed”, the employee is eligible to receive 9 hours of pay at the Office Closed premium rate of pay for the 9 hours actually worked at the Office Closed location. The employee would also be eligible to receive 8 hours of pay at their regular rate of pay for the first 8 hours worked at the Office Closed location and one hour of “daily overtime pay” for the one hour worked beyond 8 hours at the Office Closed location.
California Make-Up Time
California Wage and Hour provisions permit – but do not require – employers to allow, upon request from employees, the use of “make-up time” under certain conditions. “Make-up time” allows a non-exempt employee to request time off for a personal obligation and make up the time during the same workweek, without the employee receiving overtime pay.
If the use of make-up time for a personal obligation of the employee will result in a non-exempt employee working longer than an 8-hour workday, a Request for Make-Up Time for Non-Exempt Employees request must be submitted.
There are strict requirements for the proper use of the make-up time request:
The absence for which the make-up time is requested must be due to a personal obligation.
The make-up time form must be completed, submitted and approved in advance of the requested time off or having worked make-up time, whichever is first.
(Applies to California only) The make-up time worked must occur during the same work week as the requested time-off. The make-up time cannot be carried over to another work week. (The Joyner work week begins on Saturday and ends the following Friday.)
An employee can work no longer than 11 hours on another workday within the same week to make up time taken off.
An employee may work no more than 40 hours in a work week to make up the time taken off.
A separate form must be completed and approved for each incidence of make-up time request.
A verbal approval does not meet the requirements under this provision; therefore all steps listed under the requirements must be completed to be compliant under the California provisions.
Incorrectly submitted “Requests for Make-Up Forms’ will be returned to the employee and supervisor, indicating the form is incorrect and cannot be applied to the time-off or make-up time.
The form is not meant to be used for regular or ongoing time off requests, or as a method to circumvent our U.S. Compressed Workweek program and procedures in California.
Note: Due to California State wage and hour legislation, “Compressed Workweeks” are not an available “Alternative Work Arrangement” (AWA) option for non-exempt/overtime eligible employees in California. See the California State Exception Section of the Work Hours and Time Worked Policy for information on additional pay that may be owed to non-exempt/overtime eligible employees who do not receive a required meal break within the specified time period. Note: Joyner has made a business decision to apply California pay policies to non-exempt/overtime eligible, non-resident employees while they are temporarily working in California. Going forward, these employees will be expected to adhere to, and will be compensated pursuant to, Joyner's pay policies relevant to California.
Colorado In Colorado, non-exempt/overtime eligible employees in certain types of industries are eligible to receive “daily” overtime (1 1/2 times the regular rate of pay) for time worked after 12 hours on the same day. However, Colorado Department of Labor opinion letters and Advisory Bulletins state that Colorado daily overtime regulations do not apply to the insurance industry. Therefore, Joyner employees in Colorado do not qualify for daily overtime for hours worked beyond 12 hours in a day. But they are eligible for overtime pay (1 ½ times the regular rate of pay) for time worked in excess of 40 hours during the workweek.
Kentucky Non-exempt/overtime eligible employees in Kentucky are eligible to receive the overtime rate of pay (1 ½ times the regular rate of pay) for hours worked beyond 40 hours in a workweek. Kentucky’s wage and hour laws also have a provision that addresses non-exempt/overtime eligible employees who actually perform work on all seven days of the same workweek. Joyner’s “seven day” workweek begins on Saturday at 12:01 a.m. and ends the following Friday at midnight.
Note: For the “seventh consecutive day” overtime rate of 1 ½ times the employee’s regular rate of pay to apply to hours worked on the seventh day of the workweek, the employee must actually perform work on each of the seven consecutive days during the SAME workweek. Full day paid absences do NOT qualify as “performing work”. For example, if a non-exempt/overtime eligible employee works on 6 days of the same workweek, but is off an entire day during the same workweek for a Company Holiday, or takes a full day of Paid Time Off (PTO), then the “seventh consecutive day” rate of 1 ½ times the employees rate of pay will not apply for this particular week, since the employee did not actually work on all seven consecutive days of the same workweek. However, the overtime rate of pay will continue to apply to hours worked beyond 40 hours during the Saturday through Friday standard workweek.
Nevada In Nevada, the regular rate of pay applies to the first 8 hours of time worked per day. Overtime rate of pay (1 1/2 times the regular rate of pay) applies to hours worked beyond 8 hours in a given workday for non-exempt/overtime eligible employees who earn less than 1 1/2 times Nevada's Minimum hourly wage. The daily overtime laws do not apply to non-exempt/overtime eligible employees who earn more than 1 1/2 times Nevada's minimum hourly wage. Nor do the daily overtime regulations apply to hours worked beyond 8 hours per day for employees with “alternative workweek” arrangements. The overtime rate of pay of time and one half does apply to time worked in excess of 40 hours per work week for all non-exempt/overtime eligible employees.
Human Resources may be contacted if you have additional questions regarding specific state exceptions.
Non-exempt/overtime eligible employees need to appropriately and accurately complete a timesheet as applicable.
The supervisor explains overtime and overtime pay, including how to enter this time on the timesheet.
The supervisor must approve any overtime worked. However, if a non-exempt/overtime eligible employee works unapproved overtime, Joyner will pay this time unless any legal exception applies. Consult with Human Resources and/or the Legal Services to determine whether any exception applies to paying unauthorized overtime.
Supervisors are responsible for reviewing their direct reports’ timesheets for accuracy and timely submission.
Provide assistance to business partners as needed in understanding and applying Joyner’s Overtime Pay and Flex Time policy as outlined in this chapter. Also help ensure compliance with all wage and hour laws and regulations.