Compensatory & Overtime

Who is eligible for overtime?
All University positions are defined as "exempt" or "nonexempt" in order to comply with the federal Fair Labor Standards Act (FLSA) and State Wage and Hour regulations. The FLSA governs overtime requirements. An "exempt" position is not subject to the provisions of the FLSA with respect to overtime. "Nonexempt" applies to those individuals employed in positions that are subject to the FLSA provisions and are thereby eligible for overtime. The determination of whether a position is exempt or nonexempt is made by Human Resource Services based on the duties performed, reporting relationships, FLSA guidelines and interpretive letters, and recent court decisions.

When is an employee eligible for overtime?
When a nonexempt employee is required to work in excess of 40 hours per week, unless specifically defined otherwise in a collective bargaining agreement, the employee is eligible for overtime at the rate of 1 ½ times the regular rate of pay for all overtime hours worked.

What is the difference between overtime and compensatory time?
Nonexempt employees are entitled to earn overtime. However, upon mutual agreement between the employee and the supervisor, a nonexempt employee may receive compensatory time in lieu of overtime. Both overtime and compensatory time accrues at the rate of 1½ for each one hour of overtime/compensatory time worked.

Exempt employees are not entitled to payment of overtime. Upon agreement of the employer and the employee, a non-union exempt employee may receive compensatory time in lieu of overtime.  A non-agricultural excempt employee, who is a member of FOCUS-MFPE, is entitled to accrue compensatory time (please see applicable bargaining agreements for other union members not mentioned).  Exempt employees accrue compensatory time on an hour-for-hour basis for all authorized time worked in excess of 40 hours per week.

Contract administrators, contract professionals and faculty are not eligible to earn and use compensation time (UM Policy 801).