Overtime/comp pay for exempt employees

Currently, we pay exempt supervisors $100 for every Saturday where they work at least four hours that Saturday and have worked at least 40 hours during the week (for a total of 44+ hours for the week). Human Resources would like to get away from this practice as we do not feel this should be necessary for exempt employees (because it tends to cause an hourly mentality where the supervisors are only working the minimum necessary to get the extra money). However, an argument is being made that it helps morale and doesn't violate any FLSA regulations due to the 2004 changes.

What are people's thoughts on the practice of paying exempt employees a flat rate for working over 40 hours/week? Are there any FLSA regulations we should consider with our decision? How do other organizations reward exempt employees for working beyond their regular "schedule"?


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  • We let our exempt supervisors decide between getting straight pay for any time worked over 40 or participate in the year-end bonus pool. DOL has reviewed this policy and approved it. It helps keep morale up when they are working long hot hours in the field. They all seem very happy with it. If they accept the straight hourly pay though, you have to watch for abuse. Some of them seem to work a lot more hours once they get into that pay class!
  • Around here, if you're salaried, you work how ever many hours it takes to get the job done, no compensation for overtime. However, all profit center managers are on a quarterly bonus program.
  • We also work all kinds of hours and consider it part of our duties for the pay (non-exempt workers work by the hour, exempt workers work by the job). However, when someone has truly gone above and beyond the call of duty, we either give them a day off without hitting their PTO bank, or we give them a small bonus. Paying someone for hours worked can be considered a bonus, if you handle it as such.

    Good luck!

  • We do 'bout the same. Exempt employees are expected to put in ever how many hours it takes to get the job done. If someone putting in lots of additional time due to a special project or opportunity we will pay them a spot bonus and or give them additional paid time off.
  • We pay straight time for all hours worked over 44 for the week to our exempt ee's below the director level. The first 4 hours are expected and not compensated. This can create problems because there is a sense of entitlement and sometimes complaints about not getting paid for the first 4 hours. When that happens I remind them that at most places there is absolutely no additional compensation for OT. There are some other major employers in the area that do something like we do or more of a flat rate such as your employer does.
  • All of our exempt employees receive 80 hours of administrative leave per fiscal year (in addition to vacation leave and three floating holidays). The employee can cash-out up to 40 of those hours. The administrative leave is "use it or lose it" and does not carry over from year to year. Employees are very positive about this as it recognizes the extra hours they put in during the year.
  • Nothing wrong with paying a salaried person "extra" for above and beyond such as working on a Saturday when they normally would not work on a Saturday. I hear salaried people say all the time "I have put in my 40 hours a week" or "I work an eight hour day". This is not the mindset of a salaried individual.

    We also do not dock salaried individuals PTO time if they work a partial day. I know the law allows this, but we only dock PTO if an individual is out a full day. This is one way that we acknowledge that salaried people often work long hours. (You have to keep a lid on this as we have had some salaried individuals cruise in for an hour to avoid the PTO "dock" and then leave). Most are professional enough not to do this.

    We sometimes require a salaried person come in on Saturday to attend training classes. We do not credit them a PTO day for this,but simply let them take a day off at a later time.

    Most of our salaried individuals work a week of at least 45 hours and some work as many as 60 hours/week. We try to be as flexible as possible within reason as long as the job gets done.

  • We do not dock an Exempt Employee's PTO bank if they work a partial day, so this makes up for overtime that they work. They don't take undue advantage of this free time off, but if they did, we would have a talk. How would I know if they are taking unfair advantage? We have an automated leave system that I can run a report on every 6 months. It will list all the exempt employees, and any time off they took. It will identify the time off as vacation, personal, or short term leave. Short term is the "free time" an exempt employee can take off for working just a partial day. O.K., now back to the "we would have a talk." I would point out the amount of "free time" they have taken, and ask if there is a significant reason for all of the "free time" they have been taking. If there is no legitimate reason, I would let them know that I think the "free time" is being abused, and if it continues I will move to an houly employee who is eligible for overtime pay. I suspect that would work very well, because seldom do our exempt employees work more than an hour or two over 40 in a week, if at all, plus they don't punch in or out. The exempt employees value this A LOT!

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