Hiring Non-exempt Employees to Exempt Positions


INTERNAL CLA HR AND FISCAL PROCESS DOCUMENTATION (Updated 02/17/2016)

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 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. If a department typically pays a new exempt part time 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. 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. Please include on how you calculated the hourly rate. 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 C.
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