HR MATTERS E-TIPS
THIS WEEK’S E-TIP: Compensatory Time Off for Nonexempts Q&A
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^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ THIS WEEK’S E-TIP: Compensatory Time Off for Nonexempts Q&A Here’s an interesting idea – instead of paying overtime rates to nonexempt employees, how about giving them extra time off instead? While this may sound like a “win-win” for everyone involved, the FLSA generally does not allow this practice outside of the public sector. |
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Special Notice: USCIS Issues New Form I-9 for Immediate Use The U.S. Citizenship and Immigration Services (USCIS), the federal agency that enforces employment verification requirements, has issued a revised Form I-9. (All employers must verify that every new employee is either a U.S. citizen or authorized to be employed in the U.S. by filling out the Form I-9, Employment Eligibility Verification, for each new employee. The form must be filled out within three days of hire and retained for at least three years, or one year after termination of employment if that time period is longer.) This update is the first to the form since 1991 and implements the changes Congress made in 1996 to the list of documents that employers may accept to verify a new employee’s authorization to work in the U.S. Regulations were issued in 1997 to implement these changes but were never finalized and the Form I-9 was not revised to incorporate the changes. The USCIS fact sheet explaining the Form I-9 changes indicates that the new form should be used for all individuals hired on or after November 7, 2007, although the agency also gives employers a 30-day transition period to begin using the new form. Still, you should switch to the new form immediately to ensure compliance. For your convenience, a copy of the new Form I-9, marked in the lower right hand corner of the form as “Form I-9 (Rev. 06/05/07) N,” is available here. You also will find a copy of the revised USCIS Handbook for Employers, Form M-274, which explains the I-9 process in detail and includes questions and answers on filling out the form, examples of the acceptable documents, and a copy of the Form I-9. |
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THIS WEEK’S E-TIP: Compensatory Time Off for Nonexempts Q&A Q: May we give “comp time off “ instead of paying our nonexempt employees overtime when they work more than 40 hours in a week? A: As a general rule, you cannot give nonexempt employees compensatory time off instead of paying them overtime if you are a private sector employer. The Fair Labor Standards Act (FLSA) requires that you pay nonexempt employees (those covered by the overtime and minimum wage provisions of the Act) at least one and one-half times their regular rate of pay for each hour worked over 40 in a single workweek. Accordingly, private employers may not offer or require the use of compensatory time off (or “comp time off”) instead of overtime pay. However, special amendments to the FLSA permit certain state and local government employers to grant comp time off at a rate of not less than one and one-half hours for each hour of overtime worked, instead of paying overtime cash compensation. However, this practice is permitted only when the public employer and employee agree on it before the work is performed, either through individual or collective bargaining agreements. Even then, additional restrictions apply regarding the amount of comp time that may be accrued and when it may be used. (These provisions are explained in the FLSA regulations found at 29 C.F.R. §§553.23 – 553.27.) Note, that in certain cases in the private sector where the pay period is more than a week, it may be possible to provide the equivalent of comp time off, instead of overtime, as long as the extra hours worked are offset within the same pay period that they are earned. So, for example, in a two-week, 80-hour pay period, if a nonexempt employee works 45 hours in the first week, he should work only 32.5 hours in the second week, taking 7.5 hours as paid time off. The 7.5 hours would represent the five hours of overtime worked in the first week times 1.5. Thus, as a practical matter, the employee receives overtime for the extra five hours worked in the first week because he is still being paid for 80 hours although he has worked only 77.5 in the two-week period. However, the nonexempt employee should not be allowed to accrue the paid time off for use in another pay period since this practice could violate the FLSA. |
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