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Nov03

Comp Time for Exempt Employee

Our exempt employees usually have time spent above the 40 hours because of events we have at our facility. Sometimes 20 hours over their 40…is it permissible to give comp time in Ohio at the discretion of the Director and limit the hours or at least to say in our Handbook we may limit hours that can be used? Is it possible just to say she has a flexible schedule and keep her hours under or at 40…changing the days that need to be worked? Thanks

The federal Fair Labor Standards Act (FLSA) establishes compensatory guidelines for employees. Employers in Ohio are subject to the FLSA.

Exempt employees under the law receive a fixed predetermined salary for any workweek during which work is performed regardless of the quality or quantity of work performed.

Though exempt employees are expected to work as many hours as it takes to get the job done, employers are able to compensate exempt employees for time worked over their regularly scheduled hours. Doing so shows an appreciation for the work performed above and beyond their normal responsibilities or during periods of high business demands. Such additional compensation is often offered to retain good talent and encourage productivity amongst employees.

The additional compensation may be paid on any basis i.e. flat sum, bonus payment, straight-time hourly amount, time and one-half or any other basis. As long as the additional compensation is occasional and the employee otherwise meets the criteria for exempt status, the status will not be jeopardized.

Though additional compensation can be paid at an hourly rate, it’s often advised not to do so in an effort to limit the risk of a FLSA violation. Awarding additional hourly compensation to exempt employees could show negatively towards an exemption argument if a misclassification claim is filed. Thus, it’s more common to pay an exempt employee a flat sum or bonus payment to reward them for their additional work.

Comp time refers to the practice of allowing an employee to take time off from work in lieu of additional compensation. Comp time is permitted for exempt employees under the FLSA and can be granted in any way the employer chooses. Further, an employer is able to place any cap or no cap at all on comp time accruals. It’s completely at the employer’s discretion. Whatever practice you choose, it’s best to apply it to all similarly situated employees to avoid the perception of discrimination.

It’s also possible to allow an exempt employee to work a flexible schedule. With a flexible schedule, she would only work 40 hours a week but her daily schedule would change as necessary. This will be easier from a payroll perspective but may only work for certain employers depending upon the operational needs of the business. HTH!

This entry was posted on Tuesday, November 3rd, 2015 at 10:16 am and is filed under
Compensation, Labor Laws.
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