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Hiring Non-exempt Employees to Exempt Positions

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									INTERNAL CLA HR AND FISCAL PROCESS DOCUMENTATION (Updated 04/28/2011)

Guidelines Regarding the Appointment of Non-exempt Employees to a Second Exempt Position, and
Overtime Pay Calculation

Background: When any U of MN employee holds a 100%, non-exempt (usually civil service or bargaining unit)
appointment, and is appointed to a second exempt appointment (e.g. teaching a course, or any other exempt
duties), resulting in hours worked beyond 40 in a work week, the University is required to account for and pay
a special overtime rate for the additional hours worked over 40 in the second appointment and treat both
appointments as nonexempt.

Note: If someone holds a 100 percent time exempt appointment and is asked to teach an additional course,
this would be paid as overload from the department’s single allocation rather than overtime because both
appointments are exempt. CLA discourages a department from employing 100 percent time non-exempt
employees into secondary exempt appointments due to the cost.

      The determination of exemption requires an examination of an employees’ job as a whole. Due to
       the majority of work and time being classified as non-exempt, the employees are considered non-
       exempt under the Fair Labor Standards Act (FLSA) exemption tests.

      FLSA requires records kept of all hours worked for non-exempt classified employees, even the hours
       worked in a secondary appointment classified as exempt, because the employee is considered non-
       exempt when reporting employee data to the Department of Labor.

      The University must identify specific rates of pay for each appointment; the primary, non-exempt
       appointment and the secondary appointment as an Instructor or other types of exempt
       appointments.

      Non-exempt employees must be paid for each hour worked, with time and a half for hours worked
       over 40 hours in each work week. A work week is typically defined as Monday through Sunday
       (though it is possible to work with OHR compensation to create a unique workweek for a department
       or unit with documentation). This method of pay calculation requires an hourly rate of pay for both
       the 100% appointment and the secondary exempt appointment.

      According to University Policy, Hiring Non-Academic Staff to Teach, located at
       www1.umn.edu/ohr/toolkit/hiring/academic/teach, all overtime pay is based on the higher pay rate
       of the two appointments.


REQUIRED DEPARTMENT ACTIONS

A.      Determine Hourly Rate

The CLA department employing the individual must work with CLA Human Resources and CLA’s Financial
Analyst to determine an hourly pay rate for an “overtime” secondary appointment. Factors for determining
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the hourly rate of pay for the secondary appointment include market data, internal equity, pay relationships
within the department, and the department’s budget, employee performance, education and experience.
Determine an hourly wage for comparable exempt work, paid to exempt employees who have similar
education, skills, knowledge, experience and length of service as the non-exempt employee being hired into
the exempt second appointment. The department must also determine the approximate number of hours
per week typically required for an exempt employee to complete the work.

Example for an Instructional Second Appointment:
There are 19.6 weeks in fall semester, and 19.4 weeks in spring semester. For this calculation we use an
average of 19.5 weeks. For an instructional appointment the work might include classroom instruction, hours
in planning, picking a new text book, student coaching etc. A department typically pays a new exempt z-term
P and A Teaching Specialist $5425 per semester, and the work is anticipated to require 10 hour per week.

For one semester, 19.5 weeks x 10 hours = 195 hours.
$5425 divided by 195 hours = $27.82 per hour
$27.82 divided by 1.5 = $18.54 This is the hourly rate that is entered into the employment system. The
employee system will then multiply the hourly rate by 1.5 for any hours worked over 40 by the employee.

To verify the hourly rate at time and one-half for the anticipated hours per week is correct, take $18.54 x 195
hours = $3615.30 x 1.5 = $5422.95.

If the non-exempt employee’s hourly rate in the primary 100 percent time non-exempt position is higher
than the overtime hourly rate of $18.54 for the second instructional appointment, the hourly rate paid for
the second appointment will be at the higher rate.

B.       Complete AHA Form

Once the hourly rate has been determined, use the academic hiring authorization (AHA) form for
documentation and authorization of this hire. In response to the question on the form, “how was the
compensation determined for this appointment?” please document how you calculated the hourly rate. In
response to “base/lump sum”, indicate the per hour rate. For the example above you would insert “$18.64
per hour.” For “Appointment Term”, Z-term is defined as “hourly, summer term or lump sum”, so the z-term
can be used for this hourly appointment. Submit the AHA form to the CLA-HR email account for approval.

C.      Draft Appointment Letter

The appointment letter must indicate that the hours over 40 will be paid at one and one-half times
the new hourly rate, and that a time card must be kept for all hours worked over 40. Submit a draft
appointment letter to CLA-HR email account for review and approval. The appointment letter should
state, “This second appointment has a base hourly rate of $X, paid at the rate of time and one-half for
hours over 40. You need to keep a time card of all hours worked.” In addition, the appointment letter
should include the language stipulated in section D.




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D.       Employee Keeps Time Card

The employee is required to keep a time card of all overtime hours worked and submit the hours
according to the University payroll schedule. In the example above, if the hours worked are more or less
than the 10 hours per week anticipated, the employee must be paid for actual hours worked. The
employee should be informed at the time of the appointment of the anticipated hours required to
perform the work. The appointment letter should state, “Over the course of the semester, we
anticipate that this position will require you to work a maximum of (insert number) hours. We
understand that the hours worked will vary on a weekly basis. However, you must talk with (insert
name/title of supervisor) before you work more than (insert #) hours in a week.”

Additional Information

        An employee cannot be paid for simultaneously working two positions. An employee who
         teaches from 9-10 a.m. on Wednesday, cannot work or be paid for their 100% appointment at
         the same time (9-10 a.m.) If the employee is regularly scheduled to work at 9-10 a.m. in the 100
         percent position, then the employee must be on vacation, flex time, or unpaid time.

        There is no holiday premium for performing academic work on a University holiday.

        If the employee calls in sick on the primary appointment, say from 8 a.m. to 4:30 p.m., but
         teaches that evening, there is no change in pay (either sick pay or the pay for the teaching
         appointment).

        http://www1.umn.edu/ohr/toolkit/hiring/academic/index.html (From Manager’s Tool Kit on
         this topic):

Hiring Non-Academic Staff to Teach

The following procedures provide for hiring Civil Service staff to perform a teaching function. Teaching
as used in this context includes providing classroom instruction for courses that supplement the faculty
offerings and/or expertise of the faculty. Classroom instruction may be for credit and non-credit
courses, workshops, seminars and conferences. Requirements for overtime pay are also addressed in
conjunction with these procedures.

Hiring a current civil service employee on an additional appointment to perform a teaching function

The civil service employee should be hired in the teaching specialist job code/title series or the lecturer
series. Determination should be based on appropriate qualifications in alignment with the teaching
specialist and lecturer classification descriptions. Employees must meet the minimum qualifications for
the class that is chosen. The appointment type of annual renewable contract (K) is to be used if the
instruction is for credit coursework. If the instruction is for non-credit coursework, an appointment type
of non-credit teaching/other professional work (Z) is to be used. An appointment term of flexible hourly,
summer research, lump sum (Z) is to be used.


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Overtime pay

If the civil service employee's primary job is exempt, there is no overtime pay required. If the civil service
employee's primary job is non-exempt, then all work the employee performs will be considered non-
exempt and overtime pay is required for work in the teaching appointment. Overtime is to be paid out
at the higher amount whether it is the non-exempt or exempt appointment. Because of the requirement
to pay overtime, this appointment cannot be paid out as a lump sum, but rather set up as an hourly rate.

Documenting a teaching function when the employee's civil service position includes some percentage
of teaching

The employee's civil service position may incorporate some teaching responsibility. This function would
typically be no more than 20 to 30 percent of the individuals job duties. In order to report the teaching
function, a courtesy title in the teaching specialist job code/title series or lecturer title series, depending
on qualifications, is to be used. The appointment type of other (0) is to be used with the courtesy title




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