Human Resources Policy Manual (HRPM) Reference Material Use of Compensatory Time Off for Fair Labor Standards Act (FLSA) Exempt Employees: Questions and Answers
Use this HRPM Reference Material in conjunction with: Policy Bulletin #50: Use of Compensatory Time Off for FLSA Exempt Employees (link to filename: PB50CompTimeExemptweb) Effective Date: February 17, 2008
Q1. Why is a new policy being implemented? A. New Government-wide regulations, effective May 14, 2007, require consistency in payroll action for unused compensatory time if not used within 26 pay periods. Q2. What is the Fair Labor Standards Act? A. The Fair Labor Standards Act (FLSA) of 1938 establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full and part-time employees in the private sector and in the Federal, State, and local governments. Q3. What does it mean to be exempt from the FLSA? A. An FLSA exempt employee is one who is not covered by the minimum wage and overtime provisions contained in the Act. To be considered exempt, employees must meet certain minimum tests related to their primary job duties. Q4. What does it mean to be nonexempt from the FLSA? A. An FLSA nonexempt employee is one who is covered by the minimum wage and overtime provisions of the Act. Q5. How do employees know if they are exempt or nonexempt from the FLSA? A. Employees' earnings and leave statements provide this information in the block entitled "Basic Information." Q6. Are nonexempt and exempt employees treated differently under the new limits for using earned compensatory time? A. Yes, payment for unused compensatory time differs depending upon whether an employee is exempt or nonexempt from the FLSA. See Questions 7 and 9 below. Q7. What is the timeframe for use of accrued compensatory time off? A. Accrued compensatory time off must be used by the end of the 26th pay period after the pay period during which it was earned. Q8. What happens to an employee's unused accrued compensatory time off balance after th the 26 pay period during which it was earned?
A. FLSA exempt employees will forfeit the unused compensatory time after the 26 pay period following the pay period during which it was earned. Q9. Are there any exceptions to the forfeiture requirement of unused compensatory time th for FLSA exempt employees after the 26 pay period following the pay period during which it was earned? A. Yes, if the failure to take the compensatory time off is due to an exigency of the service beyond the employee's control, the employee receives overtime payment for the unused amount of compensatory time off. Q10. What happens to an employee's unused accrued compensatory time off balance if the employee transfers or separates from Federal service before the 26 pay periods? A. With three exceptions (see Questions 11, 12, and 13 below), FLSA exempt employees forfeit any unused compensatory time off when they transfer or separate from Federal service. Q11. What happens to an employee's unused accrued compensatory time off balance before the 26th pay period if separated or placed in a leave without pay (LWOP) status to perform service in the uniformed services? A. Both FLSA exempt and non-exempt employees are paid overtime for the unused compensatory time off balance if separated or placed in a LWOP status to perform military service. Q12. What happens to an employee's unused accrued compensatory time off balance before the 26th pay period if separated or placed in a LWOP status due to an on-the-job injury with entitlement to injury compensation? A. Both FLSA exempt and non-exempt employees are paid overtime for the accrued unused compensatory time when placed in a LWOP status due to an on-the-job injury with entitlement to injury compensation. Q13. Is there a grandfather clause for compensatory time balance earned prior to implementation of this policy? A. Yes, the unused compensatory time earned prior to February 17, 2008, has been grandfathered for purposes of this policy. The grandfathered compensatory time that remains unused at the time of retirement, transfer to another agency, or departure from the Federal Service will be paid overtime at the rate it was earned. Q14. What rate is used to pay the liquidated compensatory time off? A. When the accrued unused compensatory time is liquidated, employees are paid at the overtime rate in effect when the compensatory time was earned. Q15. Prior to implementation of the new policy, compensatory time was used from the lowest rate (and usually earliest) earned. Does this change under the new policy? A. Yes, compensatory time will be deducted from compensatory hours with the earliest expiration date. Q16. How will employees know that they have compensatory time hours about to expire? A. A message will be displayed upon the Statement of Earnings and Leave three pay periods prior to the expiration of the compensatory time.