University Policy
Title
University of North Carolina at Chapel Hill Policy on Overtime and Compensatory Time Off
Introduction
Purpose
This policy addresses the requirements for providing Overtime and Compensatory Time Off for University of North Carolina at Chapel Hill (“University”) employees who are Subject to the State Human Resources Act (“SHRA”) and Exempt from the State Human Resources Act (“EHRA”).
Scope
This policy applies to all temporary and permanent SHRA and EHRA employees, including faculty, Exempt Professional Staff (“EPS”), Senior Academic and Administrative Officers (“SAAO”), and temporary SHRA student employees.
This policy does not apply to other student appointments, such as Research Assistants and Graduate Assistants, when they are engaged in research or teaching activities in the course of obtaining a degree and therefore not covered by the Fair Labor Standards Act.
Policy
Policy Statement
Each position at the University is assigned a status in relation to the Fair Labor Standards Act (“FLSA”). The position can be classified as either FLSA exempt or FLSA non-exempt. Permanent FLSA non-exempt employees may earn Overtime Pay or Compensatory Time Off; temporary FLSA non-exempt employees may earn only Overtime Pay. FLSA exempt employees may not earn Overtime Pay or Compensatory Time Off. When a manager allows scheduling flexibility within a Work Week, as described in this policy, that time is different from, and therefore tracked separately from, Overtime Pay or Compensatory Time Off.
FLSA Non-Exempt
FLSA non-exempt employees are paid by the hour. If an employee works more than their regular schedule on one day in a 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 permit employees to take equal time off in a different week.
When it is not possible to modify the employee’s schedule, management may compensate permanent employees who work more than 40 hours in a Work Week 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.
If Overtime Pay is not possible for reasons including but not limited to budgetary constraints, management may provide Compensatory Time Off to employees for time worked over 40 hours. Management must consider existing workloads, staffing requirements, and availability of funds in deciding which compensation option will be used.
Temporary employees who work more than 40 hours in a Work Week are only eligible to be compensated with Overtime Pay. These employees are not eligible to receive Compensatory Time Off.
Overtime
When management opts to provide Overtime Pay, eligible employees earn Overtime Pay for all hours worked in excess of 40 hours in a Work Week. Overtime Pay must be paid at the rate of time and one half of the employee’s regular rate of pay for all hours worked over 40. Paid time that is not considered time worked (e.g. sick time, vacation time) does not count as time worked for the purpose of determining employee eligibility for Overtime Pay.
Management is encouraged to 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 and must observe any rules and processes of the work unit related to overtime. Some work units may require occasional or regular mandatory overtime as a condition of employment.
The Overtime Pay will 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 obligation to compensate overtime work at the rate of time-and-one-half.
Compensatory Time Off
When management opts to provide Compensatory Time Off, eligible employees will earn 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 40 hours of pay and 6 hours of Compensatory Time Off (4 hours x 1.5).
Compensatory Time Off must be scheduled by the supervisor. The supervisor should make every effort to accommodate the preference of the employee when scheduling Compensatory Time Off. Compensatory time off may be used for any purpose.
The maximum amount of Compensatory Time Off an employee may carry at any time is 240 hours (160 hours of work x 1.5). Part-time employees are allowed a pro-rated maximum. Any time worked in excess of the 240 hour maximum must be compensated as Overtime Pay on the employee's next paycheck.
Compensatory Time Off must be taken within 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 unused accrued time must be paid to the employee no later than the next pay cycle following the end of the 12 months.
If an 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. 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, whether they are staying in the same position or transferring to a different position.
See "Determining Time Worked" for a prioritized list of leave and paid time off use.
FLSA Exempt
FLSA exempt employees, both EHRA and SHRA, are expected to work 40 hours (or their approved, pro-rated FTE) in a Work Week. However, unlike hourly-paid employees, FLSA exempt employees are accountable and compensated for their performance outcomes, rather than for time worked on an hour-for-hour basis. FLSA exempt employees occasionally put in some time and effort beyond the University's standard business hours in order to fulfill the generally expected professional responsibilities of their positions. Employees whose positions are classified as FLSA exempt do not earn Compensatory Time Off when they work more than 40 hours in a Work Week.
Compensatory Time Off is not to be accumulated, tracked, used, or paid out for FLSA exempt employees, except if specifically mandated by a state and/or UNC System policy, such as during a pandemic or communicable disease emergency.
Managers may, on a non-routine basis, extend scheduling flexibility within the same Work Week to employees who have worked more than 40 hours in the Work Week. Employees must use leave for all work absences not accounted for by management's approved flexibility.
Definitions
- Compensatory Time Off: paid time off equal to one-and-one-half times the amount of time worked in excess of 40 hours in a Work Week.
- Overtime Pay: compensation at the rate of time and one half of the employee’s regular rate of pay for all hours worked over 40 in a Work Week.
- Work Week: The University’s standard work week is from 12 am (midnight) Monday to 11:59 pm Sunday.
Related Requirements
External Regulations
University Policies, Standards, and Procedures
Contact Information
Office of Human Resources
Subject: SHRA Inquiries
Unit: Classification and Compensation
Email: compensation@unc.edu
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Subject: EHRA Inquiries
Unit: EHRA Human Resources
Email: ehranf@unc.edu