HUMAN RESOURCES

Effective Date: 12/19/00


Policy Statement 8: Federal Fair Labor Standards Act (FLSA)


General Policy

The Fair Labor Standards Act (FLSA) is a federal law which establishes standards for minimum wages, maximum hours, overtime pay, and child labor. The University is covered by the provisions of the FLSA, and is responsible for insuring compliance with the Act. It is important to note that being subject to the State Personnel Act has no bearing on an employee's wage and hour status under the Fair Labor Standards Act.

The State Personnel Commission dictates the policy for administering the FLSA within North Carolina State Government; and without exception, University administrators and supervisors at all levels of management must insure that the requirements of the Federal law are properly followed. No one has authority to promote or to enter into any arrangement or agreement which would deny any University employee his or her rights as provided under FLSA.


Employee Exemption

  1. Certain employees may be declared exempt from the Wage and Hour requirements that are described herein. Only the Department of Human Resources and the Office of State Personnel may determine those who qualify for exempt status. Employees who qualify for exempt status are placed in one of three categories: a) Executive Employees, b) Administrative Employees, c) Professional Employees.

  2. There are many factors that determine whether an employee is exempt from or subject to FLSA. A determination may be made only by a skilled Classification Analyst who is completely knowledgeable of all criteria set forth by the Office of State Personnel.

  3. The basic guideline and procedure for determination of either exempt or non-exempt is as follows:

    1. Consideration for exemption will be based upon all relevant employment factors such as duties performed, percent of time devoted to each job task, salary earned and other considerations that reflect the overall job.

    2. If at any time there is a change in the employment status of an exempt employee with regard to assigned duties, it is the responsibility of the department head to notify the Department of Human Resources for a wage and hour review of the job.


Key Employee Definitions for Wage and Hour Purposes

  1. Non-Exempt (Subject) Wage and Hour Employee

    An employee covered by the overtime provisions of the FLSA. This provision applies to any SPA employee paid by the University regardless of whether he or she holds a permanent, temporary or part-time appointment. (Being subject to the State Personnel Act has no bearing on exempt or non-exempt status under the Wage and Hour Policy.)

  2. Exempt Wage and Hour Employee

    An employee not covered by the overtime provisions of the FLSA. This provision applies to any SPA employee paid by the University regardless or whether he or she holds a permanent, temporary or part-time appointment. (Being subject to the State Personnel Act has no bearing on exempt or non-exempt status under the FLSA.)


Key Time Definitions

  1. Workweek

    The time span of seven consecutive twenty-four hour periods within which the University calculates overtime hours and corresponding pay for employees subject to the Wage and Hour Policy who work over 40 hours. The workweek begins at 12:01 a.m. on Sunday and ends at midnight on the following Saturday. This must not be confused with the "Work Schedule" defined below.

  2. Workday

    The period of twenty-four hours which begins at 12:01 a.m. and ends at midnight. The first workday begins at the time the workweek begins (12:01 a.m. Sunday) and the seventh workday ends at the time the workweek ends (midnight on the following Saturday).

  3. Work Schedule

    The standard work schedule for full-time employees subject to the Personnel Act is forty hours per week and the normal daily work schedule is five days per week, eight hours a day plus a meal period. Other schedules apply to part-time employees and some shift employees.

  4. Work Time

    All time the University requires, suffers, or permits an employee, who is subject to the Wage and Hour Policy, to be at duty, whether on campus, on other University premises, or at any other place. Also it may be referred to as "Hours Worked."

  5. Overtime Work

    Time worked "over 40" in a workweek by a non-exempt employee.

  6. Work Hour Units

    Work time recorded to the nearest quarter (15 min. = .25, 30 min. = .50 and 45 min. = .75). For example: 8 hours and 10 minutes = 8.25 hours; whereas, 8 hours and 5 minutes = 8 hours.


Key Pay Definitions

  1. Hourly Rate

    For a salaried employee, annual salary divided by 2080 (Hours).

  2. Overtime Pay

    One and one-half times an employee's Regular Rate. It applies to employees who are subject to the FLSA and is mandatory for work time over 40 hours in a workweek.


Work Schedule Requirements

  1. Standard Workweek

    1. The standard workweek for full-time employees subject to the Personnel Act is forty hours per week and the normal daily work schedule is five days per week, eight hours a day plus a meal period. Other schedules apply to part-time employees, some shift employees, and employees occupying positions which require a workweek other than five days due to the nature of the various University activities. Department Heads are responsible for determining appropriate schedules for their employees.

    2. Department Heads with approval of their Division Vice Chancellor may choose to utilize a variable work schedule that allows employees to choose a daily work schedule and meal period which, subject to department necessities, is most compatible with their personal needs. If the department chooses to utilize variable work schedules, this must be done as fairly and equitably as possible. Supervisors are responsible for arranging operating procedures that are consistent with the needs of the department and the public it serves, and at the same time can accommodate, as far as possible, the employee's choice of daily work schedule within the established limits. If a variable work schedule option is utilized by a University department, the following guidelines shall apply:

      (1) Each new employee must be given detailed information about the variable work schedule, and given the opportunity to select the schedule preferred prior to reporting for work. Work schedules are to be associated with individuals and not with positions, with the exception that there may be positions which must be filled on some predetermined schedule. In these cases, applicants must be informed of this predetermined schedule prior to any offer and acceptance of employment.

      (2) The employee and his/her supervisor must agree upon the schedule to be followed, consistent with the needs of the department.

      (3) Each supervisor must compile a record of the work schedules for all subordinates.

      (4) Department Heads are responsible for providing adequate supervision for each work unit during the hours employees are scheduled to work.

    3. At the discretion of the Vice Chancellor for Administration and Finance, a modified summer work schedule may be observed to help reduce utility costs for the University. A memorandum stating the provisions of the work schedule adjustment is distributed to all University employees.


Compensation

The employee is to receive straight-time pay for a standard 40-hour workweek, with the provision that an additional amount equal to time and one-half the employee's regular hourly rate times the number of hours worked in excess of 40 will be added to the base pay. Such payment must be made in form of monetary compensation or compensable time off. It is the policy of the State of North Carolina, whenever possible, to give compensatory time off in lieu of monetary compensation for hours worked in excess of 40 hours per work week. Compensatory time off shall be scheduled by management, although reasonable effort should be made to accommodate the employee as to such scheduling.

  1. An employee shall be given compensatory time off on the basis of one and one-half times the amount of time worked beyond 40 hours during a week; but such time off must be taken within 12 months from the date the overtime is performed. If compensatory time off is not given by the end of pay period following the 12 month period, the overtime pay must be paid. Overtime worked shall be recorded and compensated in units of one-tenth of an hour.

       1          2        3
    
       :00 - :05  = :00    = .0        Column #1:  Actual time worked beyond
       :06 - :08  = :06    = .1                    40 hours
       :09 - :14  = :12    = .2
       :15 - :20  = :18    = .3        Column #2:  Overtime earned (rounded)
       :21 - :26  = :24    = .4
       :27 - :32  = :30    = .5        Column #3:  Percent of one hour
       :33 - :38  = :36    = .6
       :39 - :44  = :42    = .7
       :45 - :50  = :48    = .8
       :51 - :59  = :54    = .9
    

  2. Each employee in a position subject to hours of work and overtime pay standards must sign a form acknowledging that it has been explained to him/her that it is the State's policy to give time off in lieu of monetary compensation, wherever possible, for hours worked beyond 40 in a workweek. Agreement to this is a condition of employment with the State and failure or refusal to sign such agreement will prevent employment of that person. This signed form shall be a part of the employee's personnel file and it must be kept for at least three years following the person's separation from State employment.

  3. Upon termination of employment, an employee shall be paid for unused compensatory time off at a rate of compensation not less than either the average regular rate received by such employee during the last three years of the employee's employment or the final regular rate received by such employee, whichever is higher.


Compensatory Time Off

The granting of time off in lieu of pay for employees who are subject to the FLSA because of overtime worked in excess of 40 hours per week.

  1. This must be at the rate of one and one-half hours as time off for each hour worked.

  2. The guidelines for granting the compensatory time off are as follows:

    1. Cannot be granted within the same workweek that the overtime is worked.

    2. Cannot be granted in advance of overtime either planned or anticipated.

  3. When compensatory time off is granted, it is considered as non-work time in counting hours worked for overtime purposes.


Responsibility for Administering the Wage and Hour Policy

  1. Department of Human Resources

    1. The Department of Human Resources is responsible for overall administration and interpretation of the FLSA, including compliance in:

      (1) Determining the existence of University-Staff employee relationships (in particular, Staff employee vs. Independent Contractor status).

      (2) Determining the exempt or non-exempt status of each staff employee.

      (3) Equal pay for equal work.

      (4) Minimum wage, work time, paid non-work time, overtime, compensatory time off, work schedules, and other wage-hour policy questions.

      (5) Child labor standards.

      (6) Rehabilitation Act.

    2. The Department of Human Resources is responsible for liaison with the Office of State Personnel on matters affecting University employees.

  2. Department Heads

    1. The department head is responsible for meticulous compliance with the policy with respect to all employees under his/her general or specific supervision.

    2. It is the department head's responsibility to make a determination in advance of overtime as to whether or not compensatory time off can be given within the 12 month time limit. If it is not possible, then the department head must secure approval in advance from their respective Vice Chancellor before proceeding to have the employee work overtime. This is necessary to insure the availability of funds for payment of overtime when it is known that compensatory time off cannot be given.


Employee Rights

Each employee has the right and is encouraged to raise questions, if any, about his Wage and Hour status or suspected changes in it, his pay, hours worked, or any other matter affecting him under this policy. Initially, he should be directed to the departmental representative responsible for handling Personnel-Payroll matters. The latter will answer the question or seek the correct answer from the appropriate department.

Any employee may, and should be encouraged to, consult the Department of Human Resources concerning pay status. The University will protect and uphold the employee's right.

An employee whose questions or complaints are not settled through informal means should be advised of appeal rights under the University Grievance and Appeal Procedure.


Equal Opportunity Provision

The FLSA is applied in each case without regard to any employee's race, creed, religion, sex, age, national origin or physical disability.


Wage and Hour Policy

  1. Work Time (Hours Worked)

    Work time or "hours worked" is all time an employee "is suffered or permitted to work." It is of no consequence where such work takes place, i.e., in the customary work place, at home, or anywhere else.

    Work time includes all time spent in physical or mental exertion, (burdensome or not) controlled or required by the University, and pursued primarily for the University and its "business." Work time includes most related preliminary or subsequent activities of the employee's principal duties. Examples include sharpening or cleaning tools, setting up equipment, waiting for instructions, moving about the campus to perform assigned duties, attending departmental meetings, changing clothes on University premises where special uniforms or clothing are required by the University, emergency medical treatment for an on-the-job accident, and other similar work-related activities.

    In addition to the activities included above as work time, employees who are subject to the FLSA must be paid for all time spent in activities which are defined as "work time" as follows:

    1. Rest or Break Periods

      It is a policy of the University that employees be granted a break period at the convenience of their work. The break period should not exceed fifteen (15) minutes at any one time; and when it is granted, it should be near the middle of the first and/or second half of the workday. The break period shall include any time taken in preparation for the break and in going to and from a specific break area. If for any reason the employee does not receive a rest or break period, it does not accrue to be granted at some later time or date. This means that the employee cannot combine two break periods nor can a break period be used to leave work early or to extend the length of a lunch period or vacation leave. The Department Head may suspend the privilege of a break period when abused by the employee but subject to approval by the respective Vice Chancellor.

    2. Meal Period

      While a meal period is not required by Federal or NC State law, supervisors should determine an employee's meal period when he/she works six hours or more per day. The meal period should occur near the mid part of the workday and may not be used to shorten the workday. When a non-exempt employee takes a lunch break, it must be for a minimum of 30 consecutive minutes during which the employee is completely relieved of duty. A lunch break of less than 30 consecutive minutes must be considered as hours worked for non-exempt employees as defined by the Fair Labor Standards Act. Please check with your supervisor regarding your scheduled lunch break.

    3. On Call Time

      (1) On call time is any time an employee is required to remain at or so near his place of work that he cannot use the time effectively for his own personal purposes.

      (2) On call time does not occur if the employee is not required to remain on the University's premises but is asked merely to leave word at his home or with his supervisor as to where and how he might be reached.

      (3) On call time, as defined here, is work time.

    4. Travel Time

      The following circumstances determine whether or not travel time is work time:

      (1) Travel from home to work before reporting time on an assigned workday and return home at the end of the workday is not work time.

      (2) Time spent by an employee in travel as part of his normal activities, such as travel from job site to job site during the employee's regular working hours, is work time and must be recorded as such for all employees who are subject to the State Wage and Hour Policy.

      (3) Travel time away from home overnight is work time when it cuts across the employee's regular scheduled workdays. The time is not only hours worked on regular working days during normal working hours but also during the corresponding hours on nonworking days. Therefore, if an employee regularly works from 8:00 a.m. to 5:00 p.m. from Monday through Friday, the travel time during these hours is work time on Saturday and Sunday as well as on other days. The regular meal period is not counted as work time. The time spent in travel away from home outside of the regular work schedule (8:00 a.m. to 5:00 p.m.) by automobile, airplane, train, or bus is not considered work time.

      For Example: An employee who is employed to work at East Carolina University leaves for Charlotte on Sunday afternoon at 2:00 p.m. and arrives in Charlotte at 7:00 p.m.

        (a) The 3 hours traveled between 2:00 p.m. and 5:00 p.m. is work time and must be included in the total hours worked within the week for computing overtime.

        (b) The 2 hours traveled between 5:00 p.m. and 7:00 p.m. are not considered as work time for the purpose of determining total hours worked. However, it shall be considered as compensatory leave earned and may be given as time off (paid non-work hours) at a later date on an hour for hour basis. (PLEASE USE FORM LR-2.)

    5. Time Adjusting Grievances

      (1) Time spent adjusting grievances under the University Grievance and Appeal Procedure, during regular hours of work, is work time.

      (2) Such time spent outside regular hours of work is work time only if the employee's attendance is required by the University.

    6. Attendance at Training Sessions and Other Meetings

      Required attendance at training and other meetings, whether during, before, or after the employee's regular work schedule, is work time.

      Voluntary attendance at training or other meetings whether during, before, or after the employee's regular work schedule, is not work time (attendance is "voluntary" only where an employee in fact is not led to believe that his or her working conditions or chance or continuing employment would be adversely affected by non-attendance).

      Caution: Reimbursement of employee's expenses or permitted use of State vehicle to voluntarily attend a meeting outside of normal work hours would imply duties performed for the benefit of the University; therefore, attendance would be considered work time.

  2. Controlling Work Time

    1. Department Head

      (1) Each department head is responsible for exercising adequate supervision to insure that employees are complying with established work schedules and that unscheduled work is performed only in bona-fide emergencies. The mere establishment or communication of work schedules does not relieve the department head of his responsibility for controlling work time. He must ascertain and insure that all such schedules are followed by the employee.

      (2) The department head is responsible for controlling starting and stopping times and all work time, whether within or outside the usual work schedule.

    2. Employee

      (1) It is the employee's duty to comply with departmental work schedules and to avoid performing work that is "unscheduled" or "non-directed," outside of such schedules, except in bona-fide emergencies.

      (2) This recognizes the department head's ultimate responsibility, which cannot be delegated or passed on to the employee. The department head is responsible for advising all employees of the FLSA.

  3. Recording Work Time (Hours Worked)

    1. Permanent Work Schedule and Record of Overtime (Form WH-l)

      (1) It is required that this form be completed and maintained for each SPA employee who is subject to the FLSA. This must be done by the department where the employee is permanently assigned. The primary purpose of the form is to record the employee's permanent work schedule as well as overtime hours worked by the employee for the University regardless of when and where it may occur.

      (2) It may be necessary because of operational needs to make a permanent change of an employee work schedule; and if so, another page of the Form WH-1 may be prepared with the new work schedule documented in Section I.

      (3) If at any time an employee who is subject to the FLSA works in excess of 40 hours per calendar week for the University, this must be documented as overtime in Section II of the Form WH-l. It is the responsibility of the employee's department head to insure that this information is properly recorded in a timely manner. This means that any actual work time performed in excess of 40 hours per calendar week that occurs outside of the permanent work schedule, or within an adjusted or modified work schedule, or for another department/activity known as dual employment must be recorded as overtime in Section II of the Form WH-1.

    2. Employee Weekly Time Record (Form WH-3)

      (1) In addition to the Form WH-1, the department where a non-exempt employee is permanently assigned must maintain daily time records to show all hours worked (both regular hours and overtime) for each workweek.

      (2) The Employee Weekly Time Record (Form WH-3) should be completed daily as follows:

        (a) Employee Name and Social Security Number.

        (b) Department and Job Classification.

        (c) Beginning and Ending dates of the Workweek.

        (d) Actual Work Time by Clock Hour - Use appropriate column identified as NSDP for those who do not receive shift differential pay or CSDP for those who do receive shift differential pay. This should show all hours worked including regular time and overtime. If employee is granted compensatory time off in lieu of overtime pay, it must be recorded as actual work time.

        (e) Meal Period (Column 5) - Actual clock hour when it began and ended.

        (f) Actual Number Hours Worked (Column 6) - Record total number of hours worked including regular time and overtime. Do not include the meal period. The workweek total may or may not exceed 40 hours. All hours in excess of 40 in Column 6 for the workweek must be recorded on Form WH-1.

        (g) Paid Non-Work Hours (Column 7) - Record number of hours and minutes for reasons coded at the bottom of Form WH-3.

        (h) Code (Column 8) - Enter the appropriate code next to the number of paid non-work hours.

        (i) Total Daily Paid Hours (Column 9) - Should include all actual work hours and non-work hours for which the employee is to be paid. (The sum of Column 6 and Column 7.)

        (j) All employee time records are to be held for a three-year period by the department where the employee is assigned. All records must be maintained in proper order for review by the Department of Human Resources, University Auditor, State Auditors, and U.S. Department of Labor. It is essential that all employee time records agree with University payroll records.

        (k) Work time must be recorded exactly the way it is worked, as to date and amount. "Doctoring" or otherwise falsifying time records clearly violates Federal, University, and State policy, and will subject the responsible person(s) to appropriate disciplinary action.

        (l) Beyond all the possible legal and policy complications, falsified time records violates the University's need for equity in its pay and benefits practices among employees in any department.

  4. Paid Non-Work Time

    1. This includes the following that can never be counted as hours worked nor can such time be counted for the purpose of calculating overtime pay in a workweek. (Do not record the following on Form WH-1.)

      (1) Paid Vacation Time

      (2) Paid Civil Leave

      (3) Paid "Equal Time Off" for Holiday worked

      (4) Actual Non-Work Time for which Emergency "Call-Back Pay" is received

      (5) Paid State Holiday

      (6) Paid Military Leave

      (7) Paid Compensatory Leave when granted on the basis of an hour for each hour worked

      (8) Paid Sick Leave

  5. Overtime Work Limitations

    1. Overtime work assigned to an employee by his or her supervisor must consist of tasks and duties (1) normally assigned to, and performed by, the employee, or (2) be of a type customarily characteristic of the employee's position classification, and (3) that are part of the department's normally required activities. No University department may engage the services of another department's employee for "temporary work" (even though overtime is to be paid) except as may be approved in advance, by the department head where that employee is permanently assigned.

    2. Overtime work which does not meet these conditions cannot be assigned to an employee without prior consideration and approval by the Department of Human Resources. It is the responsibility of the department head to obtain such approval prior to assigning overtime work not in accordance with Paragraph 5-a, (1) or (2) and (3) above. Overtime work not in accordance with the requirements may constitute a violation of the FLSA.

  6. Adjusting Work Schedules to Limit Work Hours

    1. Adjustments Within the Same Workweek

      Even though an employee works more than 8 hours on a workday, his or her work schedule may be adjusted so that he or she does not work "over 40" in that workweek.

      Example: A heavy workload makes it necessary for an employee to work a total of 12 hours on Monday. The supervisor, in his discretion, offsets these extra hours by scheduling the employee off for 4 hours on Wednesday. The supervisor could have elected to schedule the employee off on Thursday or Friday. In any event, there is no overtime pay when time off is scheduled on an hour-for-hour basis in the same workweek. However, overtime work results and overtime pay is mandatory for all work time "over 40" in that or any other specific workweek.

    2. Should it be necessary to adjust a work schedule to limit work hours, please follow the guidelines given below:

      (1) Work schedule changes that are only essential to the needs of the job are made.

      (2) Changes in work schedule should be permanent when possible.

      (3) Give reasonable notice to the employee when work schedule changes are anticipated.

      (4) Temporary work schedule changes intended to limit work hours within a workweek should be documented daily on Form WH-3, and the change should not be made without the consent of the employee.

  7. Payment for Work at Different Rates

    Overtime for an employee working in two positions with different rates of pay is paid at the rate for the position in which the overtime occurs.

    Example: If an employee is appointed to work 20 hours each workweek (4 hours daily, Monday through Friday) in Department A, at a rate of $5.00 per hour, as an Office Assistant. She also is appointed to work 20 hours each workweek in Department B (4 hours daily, Monday through Friday) at a rate of $3.50 per hour, as a Processing Assistant. During the period that she is required to work half-time for each department, Department B will have her work two (2) additional hours each day Monday through Friday. This will require that Department B must either give compensatory time off within 12 months or insure that the employee is paid at the rate of $5.25 (time and one half) for each hour of overtime worked.

  8. Retroactive Pay Changes

    Any overtime pay for all involved workweeks is recalculated and adjusted by the Payroll Department where a subsequent pay change is made retroactive.

  9. Work Time Occurring When Daylight Savings Time Begins or Ends

    1. Employees on the job when time is changed from Eastern Standard Time to Daylight Savings Time will normally loose an hour for pay purposes, and they must be held accountable for the hour that no work is performed. This means that you must charge the hour to (1) Vacation Leave, or (2) permit the employee to make up the time within the calendar week. When possible, the employee should be given a choice between the two alternatives.

    2. Employees on the job when time is changed from Daylight Savings Time to Eastern Standard Time will normally work an additional hour. The University must compensate for this additional hour unless there is an adjustment of the work schedule to limit total hours worked not to exceed 40 hours for the calendar week.

    3. If actual work time exceeds 40 hours for the calendar week, the employee must receive compensatory time off or be paid at the rate of time and one-half.