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When Work Time is >40 hours/week: Compensatory vs. Overtime

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Presentation on theme: "When Work Time is >40 hours/week: Compensatory vs. Overtime"— Presentation transcript:

1 When Work Time is >40 hours/week: Compensatory vs. Overtime
When an employee works greater than 40 hours per week, they are due payment for their time. There are two types of payment: Overtime Payment: Is pay at 1.5 times an employee’s regular rate of pay for the hours worked over 40 hours in a week Compensatory Time (aka, Comp Time): A form of compensation that is provided in lieu of pay for overtime worked.  The purpose of compensatory time is to allow employees to have time off at a later date and as such it is to be scheduled and taken. Compensatory time is earned at 1.5 times of the time worked over 40 hours in a week. As a reminder, Comp Time is a form of compensation that can be provided in lieu of pay for overtime worked. Specifically, the purpose is to allow employees to have time off at a later date within a reasonable amount of time Like overtime, Comp Time is calculated at a rate of 1.5x the regular rate of pay. The risk with Comp Time is three-fold: That the employee doesn’t take the comp time because their work demands remain too heavy to allow for it If an employee is working overtime, minimally taking their regular vacation – which is a trend we see in some areas at the university – and not taking their due comp time, have we been supporting their health and well-being to sustain strong energy, engagement and capability on the job If employees do not use the comp time, then in August annually, the University pays out unused comp time up to certain limit. This has budget implications for departments

2 Managing Overtime Eligible Employees
The Tools Available: Contract Clarity Compensatory (Comp) Time Agreement: Ratified Sept. 22, 2016 Definition for Compensatory Time: A form of compensation that is provided in lieu of pay for overtime worked Purpose: To allow employees to have time off at a later date and as such it is to be scheduled and taken Implementation: Supervisors will review work demands and scheduling considerations so as to only permit the accrual of comp. time which may be reasonably utilized and scheduled Employee requests to use accrued comp. time shall be granted within a reasonable period after making the request so long as such request does not unduly disrupt operations In the event an employee is not scheduling accrued comp. time, supervisors shall first meet with the employee to remind them of opportunities they have to use the time and the purpose of comp. time. If after this conversation the employee does not schedule their accrued comp. time, the supervisor may schedule the employee to take time off. The supervisor shall consult with the employee before finalizing the schedule The ratification calls for an Implementation Pilot Program to run through August 31, 2018, to allow for a full academic year of experience Due to these dynamics, it is necessary that when a department uses comp time is that the department manager and employee will be realistic in considering its use in the first place and will be diligent in ensuring the time is used. Supervisors should review work demands and scheduling considerations so as to only permit the accrual of comp time which may reasonably be utilized and scheduled. For instance, in the event an employee is not scheduling or taking their accrued comp time, supervisors shall meet with the employee to remind them. If after that reminder an employee still does not schedule to take the time, the manager may then schedule the employee to take the time off, consulting with the employee before finalizing that schedule This approach is supported and outlined explicitly within the September 22, 2016 ratified UMPSA section dedicated to comp time Both UMPSA and the University selected to implement this approach as a pilot program to encompass one entire academic year. The Implementation Pilot Program will run through August 1, 2018 and will allow assessment around the success of this strategy

3 Managing Overtime Eligible Employees The Tools Available: Comp Time
UMPSA Compensatory (Comp) Time Agreement: Ratified Sept. 22, 2016 Implementation Pilot Program to run through August 31, 2018 to allow for a full academic year of experience: Managers may elect to compensate employees for overtime worked by utilizing up to 60 hours of comp time (which translates to 40 hours of work time). The decision to accrue over 60 hours will be made with mutual agreement of the employee and manager In high utilization areas at all campuses (residence life, enrollment management/admissions, and athletics) managers may elect to compensate employees for overtime worked by utilizing up to 180 hours of compensatory time The decision to use compensatory time vs. pay for overtime worked will be applied consistently among similarly classified employees in a work unit In August 2017, any compensatory balances in excess of 60 hours will be paid out to bring such balance to 60 hours Should the pilot expire with no subsequent agreement, all compensatory time balances will be paid out fully - annually in August - starting August 2018, with managers limited to allowing employees only 60 hours of comp. time The Implementation Pilot program is an excellent example of strong workforce planning. It demonstrates awareness and consideration that certain functions may have a higher utilization than other business functions. It also places a limit on comp time use to protect employee interests and outlines payout processes in the case were comp time is not scheduled and used Specifically, the agreement says: Managers may elect to compensate employees for overtime worked by utilizing up to 60 hours of comp time (which translates to 40 hours of work time). . The decision to accrue over 60 hours will be made with mutual agreement of the employee and manager High utilization areas as all campuses (residence life, enrollment management/admissions, and athletics) may elect to compensate employees for overtime worked by utilizing up to 180 hours of compensatory time The decision to use compensatory time vs. pay for overtime worked will be applied consistently among similarly classified employees in a work unit In August 2017, any compensatory balances in excess of 60 hours will be paid out to bring such balance to 60 hours Should the pilot expire with no subsequent agreement, all compensatory time balances will be paid out fully - annually in August - starting August 2018, with managers limited to allowing employees only 60 hours of comp. timeDue to these dynamics, it is necessary that when a department uses comp time is that the department manager and employee will be realistic in considering its use in the first place and will be diligent in ensuring the time is used. Supervisors should review work demands and scheduling considerations so as to only permit the accrual of comp time which may reasonably be utilized and scheduled. For instance, in the event an employee is not scheduling or taking their accrued comp time, supervisors shall meet with the employee to remind them. If after that reminder an employee still does not schedule to take the time, the manager may then schedule the employee to take the time off, consulting with the employee before finalizing that schedule This approach is supported and outlined explicitly within the September 22, 2016 ratified UMPSA section dedicated to comp time Both UMPSA and the University selected to implement this approach as a pilot program to encompass one entire academic year. The Implementation Pilot Program will run through August 1, 2018 and will allow assessment around the success of this strategy

4 Managing Overtime Eligible Employees
Comp Time: How to Use It When is Comp Time a tool that works well vs. not the best choice? Comp Time is best used for job roles and functions where the nature of the job has a regular and consistent wave of on-and-off busy-and slow-times Important Facts: Employees’ regular accrual of vacation and sick time does not change If Comp Time is not used, then it is paid out at the rate of 1x an employee’s regular rate Therefore, if there are no slow times, then Comp Time is ineffective because an employee is not able to take the Comp Time and utilize their vacation time as well Based on UMS data, a large percentage of our employees already have high vacation leave balances It is likely that in a circumstance where your function is always busy, you will end up paying the employee the overtime pay because there will be no time for the employee to use the Comp Time So, if we recognize that comp time is a tool, it’s important to consider in what circumstances it makes sense to use it as compared to when it provides little-to-no value Comp Time is best used for job duties and functions where the nature of the job has a regular and consistent wave of on-and-off busy-and-slow-times. That way comp time can be accrued and genuinely taken without putting work outcomes at risk A great example might be Admissions Officers who have a very busy and condensed travel recruiting season in the fall followed by a slower season as students choose to apply to the University. Someone in Enrollment might accrue quite a bit of time during the travel season and realistically be able to take time off after that without negatively impact enrollment, which is obviously a critically important function for our Universities On the other hand, our Information Technology department may say that their overtime- eligible roles are regularly busy; that there is no slow time during the year. In this instance, comp time is not a worthwhile tool to utilize because the energy to implement and schedule it only to cancel it, cancel it again, etc. will be wasteful and have a negative impact on morale to the employee regularly looking forward to and cancelling vacation time due to an inability to take it

5 Managing Overtime Eligible Employees
Comp Time: How to Use It A manager and employee(s) together consider the regular schedule of busy/non-busy times for an individual’s job role and the department/function overall Together, with the manager having the final approval, they estimate when peak work times may occur and comp time could be earned. They also discuss when there may be less peak times when comp time could be used. For example: In work unit A, the nature of work sees peak work hours at the beginning of the month when comp time could be accrued. When considering the month there are also times at the end of the month when this earned comp time could be used. In work unit B, the nature of work sees 4 months during the fall semester that experience peak work hours when comp time could be accrued. When considering the remainder of the year there are 4 months in the late Spring / early Summer when this comp time could be used. It is important for the manager and employee to discuss the nature of work and scheduling of work It is important for the manager and employee to be aware of compensatory time accrued, prior discussions of when the time could be used, and to schedule the time off Employee requests to use accrued compensatory time shall be granted within a reasonable period after making the request so long as such request does not unduly disrupt operations.  In the event an employee is not scheduling accrued compensatory time, supervisors shall first meet with the employee to remind them of opportunities they have to use the time and the purpose of compensatory time.  If after this conversation the employee does not schedule their accrued compensatory time the supervisor may schedule the employee to take time off.  The supervisor shall consult with the employee before finalizing the schedule. If, upon listening to the information about comp time you feel this is a feasible option within your department, the first step is initiating a conversation A manager and employee(s) together consider the regular schedule of busy and non-busy times for an individual’s job role and the department/function overall. With the manager ultimately deciding if it is reasonable to accrue compensatory time. Ideally, planning takes place at regular intervals based on the nature of work so as to assist in prioritization and determination of the manner to schedule . It is recognized that last minute circumstances can occur, especially if factors impact an original plan such as, but not limited to, FML, etc. As the two examples show, the anticipation of peak and non-peak work times can depend on the nature of the work being performed. For some work units peak and non-peak times occur in the same month. For others there are certain times of the year. It is important for the manager and employee to be aware of compensatory time accrued, prior discussions of when the time could be used, and to schedule the time off Employee requests to use accrued compensatory time shall be granted within a reasonable period after making the request so long as such request does not unduly disrupt operations.  In the event an employee is not scheduling accrued compensatory time, supervisors shall first meet with the employee to remind them of opportunities they have to use the time and the purpose of compensatory time.  If after this conversation the employee does not schedule their accrued compensatory time the supervisor may schedule the employee to take time off.  The supervisor shall consult with the employee before finalizing the schedule. Remember, The purpose of compensatory time is to allow employees to have time off at a later date and as such it is to be scheduled and taken. 


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