Compensatory and Overtime Leave Policy

Title: Compensatory and Overtime Leave Policy
Effective Date:  December 9, 2016
Revision Date: First Version
Responsible Office:  Human Resources 

I.  Scope

This policy applies to non-exempt Operational and Professional employees and Hourly employees of William & Mary and the Virginia Institute of Marine Science (the university).   

This policy does not apply to exempt employees, except as provided in Section VIII. This policy does not apply to Classified employees, who are covered by State policies on compensatory leave and overtime leave (DHRM Policies 3.10 and 3.15). 

II. Purpose

The purpose of this policy is to provide uniform guidelines for the accrual, use, and payment of compensatory leave and overtime leave.   This policy works together with the Hours of Work and Overtime Policy to compensate non-exempt employees for overtime worked and helps the university comply with the Fair Labor Standards Act. 

III.  Definitions

Compensatory Leave:  Compensatory leave is paid leave earned by non-exempt employees at a rate of one hour for every eligible hour worked (an hour-for-hour basis) when an employee is required to work on a scheduled university holiday, during authorized university closings (e.g. inclement weather), or when total paid hours in a work week exceed 40 hours but actual hours worked are less than 40 hours, as provided in Section IV.

Exempt Employee and Non-exempt Employee: An exempt employee is an employee paid on a salaried basis who is not subject to the minimum wage and overtime provisions of the Fair Labor Standards Act (“FLSA”).  Exempt employees are typically Professional employees.  Non-exempt employees are typically Operational or Classified employees.  (For definitions of the different categories of employees, see the Classification Policy.)

Overtime Leave Overtime Leave is paid leave earned by non-exempt employees who work in excess of 40 hours in the university designated workweek that is accrued as overtime leave at a rate of one and one-half hours for every hour of overtime worked.

Workweek:  As defined in the Hours of Work and Overtime Policy, the workweek is the period used to determine overtime pay for Hourly and Non-exempt employees. 

IV.  Compensatory Leave

A. Earning Compensatory Leave.  Compensatory leave can be earned:

  • for working on a university holiday.  If an employee is required to work on a scheduled university holiday the employee is paid for the hours worked plus the employee receives one hour of compensatory leave for each hour worked.  Compensatory leave is also accrued if a holiday falls on an employee’s regular day off.
  • for work required when the university or their department is official closed, as provided in the Emergency Closing Policy.  The employee may instead earn overtime pay or leave, if overtime is worked. 
  • when total hours in the work week exceed 40 but the employee has not physically worked 40 hours.  Example:  An employee works 34 hours and uses 8 hours of sick leave in the workweek.  The total hours in the workweek are 42.  In this case, the employee would be paid for 40 hours and would earn 2 hours of compensatory leave.

B. Accruing and Using Compensatory Leave.  Compensatory leave must be taken before any accrued vacation, personal, family or sick leave. Compensatory leave must also be used within 12 months of the date it is earned or it will lapse.  Employees may not accrue more than 40 hours of compensatory leave.

All compensatory leave hours must be earned prior to use.  Employees must request and receive approval from their supervisors to use compensatory leave, as provided in Section VII.

V.  Overtime Election; Overtime Compensatory Leave

A. Overtime Election: Overtime Pay or Overtime Leave.  Non-exempt employees must elect the method of overtime compensation for hours worked beyond 40 in a workweek. Each non-exempt employee must elect during the election period and no later than January 9 of each calendar year whether he or she wishes to receive Overtime Leave at a rate of 1.5 hours for each hour worked over 40 in the standard workweek or cash wages, paid in accordance with the Hours of Work and Overtime Policy. The election is made by completing the Overtime Leave Agreement and sending the form to Human Resources during the stated election period.  The employee’s election is considered irrevocable until the next election period. If the employee makes an election, that election will be applied unless the employee later changes the election in an election period. If the employee does not make an election, the university will default the employee to overtime leave, which means that the employee will receive overtime leave in lieu of overtime pay.

B. Accruing and Using Overtime Leave.  Each non-exempt employee may accrue not more than 120 hours of Overtime Leave in any leave year. Once the employee reaches the maximum accrual, any additional overtime hours must be paid as cash wages for the remainder of that leave year.   At the beginning of a new leave year, the employee may again elect Overtime Leave, and the employee may accrue an additional 120 hours of Overtime Leave up to a maximum of 240 hours. Overtime leave balances do not expire; the hours are either used by the employee or paid out to the employee upon separation or termination (See Section IX below).

All overtime leave hours must be earned prior to use.  Employees must request and receive approval from their supervisors to use overtime leave as provided in Section VII.

VI.  Record Keeping; Time-Keeping

Compensatory leave and overtime leave earned (overtime worked or additional hours worked) must be recorded on the employee’s timesheet at the time that it is earned.  University procedures prohibit tracking employee time “off the record.” Employees must enter the exact number of hours worked on their timesheet. 

Employees must record in their timesheets any use of compensatory leave or overtime leave.  

VII.  Supervisor Approval

Employees must request and receive approval from their supervisors to use compensatory leave or overtime leave. If the supervisor does not approve the use of compensatory leave or overtime leave because the absence would unduly disrupt the operations of the department or unit, the supervisor should approve an alternative date within a reasonable time after the request. Supervisors may also, based on business needs, schedule the use of overtime leave or compensatory leave for employees. 

VIII.  Elective Use by Active Military

Employees on active military duty may use their leave balances to be:

  • Applied to the period of absence due to military service;
  • Paid up to the allowable accrual limit at the time of placement on leave without pay; and/or
  • Retained until reinstatement from military leave without pay.

IX.  Exempt Employees

Exempt employees do not receive overtime, compensatory leave or overtime leave for additional hours worked.  Managers may, with the approval of Human Resources, provide compensatory leave approval to an exempt employee for an excessive amount of additional work or adjust the work schedule within the workweek to offset additional hours that have been worked.  See Hours of Work and Overtime Policy. 

X.  Transferability

Non-exempt employees will retain their accrued overtime or compensatory leave balance if they move to different positions within the university.

XI.  Payment Upon Termination of Employment

Employees will be paid a lump sum for the full amount of their accrued overtime and/or compensatory leave balance when they terminate their service to the university. This termination includes separations by resignation (including resignation from layoff status), retirement, layoff, discharge, death or transition into LTD or inactive status.

XII.  Authority, Interpretation And Amendment

This policy is approved by the President.  The President has delegated to the Senior Vice President for Finance and Administration the authority to revise or amend this policy at any time.

The Office of Human Resources is responsible for the administration and implementation of this policy.

XIII.  Related Policies, Procedures, And Other Documents

Overtime Leave Agreement
Hours of Work and Overtime Policy
DHRM Policies 3.10, Compensatory Leave, and 3.15, Overtime Leave (for Classified Employees)
Compensation Policy (for Professionals and Operational Employees)
Emergency Closing Policy