RAQs: Recently Asked Questions

Topic: Salaried/Non-Exempt Employees and Compensatory Time - 11/14/2018
It is not uncommon in small non-profits and higher education institutions to find an employment cl...
Posted: Wednesday, November 14, 2018 Permalink


It is not uncommon in small non-profits and higher education institutions to find an employment class called Salaried/Non-Exempt. If this person is not paid annually above the minimum salaried/exempt threshold AND their standard work hours fall below 40 hours, what are the laws governing the hours between standard work hours and 40 per week, and how are they applied?

For example: A library manager paid $32,000 per year, paid bi-weekly whose standard work week is 32 hours. If this manager works above 32 hours but less than 40, the library pays the manager compensatory time. 

How long after the accrual of this time is the library legally required to pay for the hours worked - either through time used or in money? 
And if in money, is it the hourly rate gained by annual "salary" / (standard work hours x 52)?

Finally, what if the library manager sought compensatory time over financial compensation as the better benefit? Do they have a choice?


This is a complicated array of questions, involving a high-stakes area of law…so we’ll take this in stages.


The member starts by evoking an interesting phenomenon: “Salaried/Non-Exempt” employees; workers entitled to mandatory overtime, but paid via a salary.

This is an employment category that, for a variety of reasons[1], is moving out of fashion…but it is still widely used in 2018.

For purposes of the member’s first question, the important thing to know is: behind the scenes, a “Salaried/Non-Exempt” employee still has an hourly rate.  This is true whether they work a regular week of 20 hours, 32 hours, 40 hours, or even 45 hours (a concept called “straight time”).  The hourly rate is determined “by dividing the total hours worked during the routine week into the employee's total earnings.”[2]

So, as asked by the member, what are the laws governing “Salaried/Non-Exempt” workers who routinely work under 40 hours?  The same laws that apply to those who work 20, 40, or 45.  And one of those laws is the Fair Labor Standards Act.


The Fair Labor Standards Act[3]

The Fair Labor Standards Act (of “FLSA”) is a nation-wide law that ensures certain basic protections for certain types of workers.  One of its many protections is requiring time-and-a-half payment for covered employees working over 40 hours a week.

“Non-exempt” is the awkward but generally accepted term for an employee protected by the FLSA.  The phrase “non-exempt” arose from the FLSA’s “exemption” of many employee categories[4] from its protections…meaning those employees don’t have to be paid for overtime.  

The Byzantine nature of the FLSA’s exemptions and inclusions can be confusing. For example,  an “administrative” position with sufficient authority, meeting minimum salary levels (with no pro-rating for those who work under 40 hours[5]), may be classified as “exempt” under the FLSA.  But another job that sounds just as “professional” might be “non-exempt.” 

But the member’s questions pertains specifically to those who are “Salaried/Non-Exempt,” so the rest of this response pertains only to employees entitled to overtime.


Comp time

The second half of the member’s submission deals with comp time.  What is that?

Under both state and federal law, “Compensatory Time”—or “comp time”—is paid time off earned by government employees in lieu of FLSA-mandated overtime.

How does this work?  If their employer offers it, non-exempt employees of municipal employers can bank time off, working 45 hours one week, 35 the next…and get paid the same for both weeks.

The “comp time” exception was added to the FLSA in 1985 to help states and municipalities confronted by the need to pay overtime.  It is a tool to stabilize civil service budgets (NOTE: although the member referenced private not-for-profits and education institutions, FLSA-governed comp time is not a tool available to private employers).

How long does a qualifying library have to pay out the comp time?   Per the FLSA, one base-line rule is that after 240 hours have accrued, the employee must simply be paid time-and a half[6].  But check out the plethora of compensation memos on file with the New York State Comptroller!  The contract or policy implementing it can set a wide variety of different terms for using it, and for cashing it out.   So there is no base-line answer, except to say: an employer must follow not only the law, but the rules they set…and should have a good system for ensuring both are followed (and again, that is only for public employers).

And as for the member’s last question: what if a librarian—any librarian—simply wants to choose “comp time” over mandatory overtime?  If FLSA-governed comp time is not available, a non-exempt employee cannot waive the requirements for mandatory overtime.  New York likes its workers to have certain basic protections, and this is a big one. 


Final take-aways

Private employers must pay salaried/non-exempt employees their guaranteed salary, and must also compensate such employees for hours in excess of the hours of a regular pay period (based on their established hourly rate).  In addition, hours in excess of 40/week must be compensated with time-and-a-half.  And finally, any "time-shifting" that might be allowed within a pay period cannot go beyond the pay period.  Extra hours worked in a week cannot be swapped from one paycheck to the next; non-exempt employees must be paid for the time they work, within the appropriate pay period.  

But this is generic, base-line guidance. Any library grappling with questions like those posed by the member should use the services of a lawyer or HR professional (who knows when to call a lawyer) to resolve them. 

After all, libraries operate as centers of information and transparency!  Confidence about the clarity and legitimacy of employee working conditions should be considered mission-critical.


[1] Mostly having to do with the mandatory base salary levels set by the state and federal governments.

[2] Part 142 of Title 12 of the Official Compilation of Codes, Rules, and Regulations of the state of New York (Cited as 12 NYCRR 142), § 142-3.14

[3] This is the law the employees in the member’s question are “non-exempt” from…meaning they fall under its protections…one of which is to be paid overtime rates when hours in a given workweek exceed 40.  The inclusions and exclusions are found in https://www.law.cornell.edu/uscode/text/29/207.

[4] Too many to list here.

[5] See U.S. Department of Labor Advisory Letter FLSA2008-1NA.

[6] See 29 U.S.C. §207 (o)(a)(3).


Tags: Management, Salary, Employee Rights

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