What are Exempt Staff?
Compensatory Time Guidelines for Exempt Employees in Montana Municipalities
‐ Municipalities may also establish a comp time policy for exempt employees, although it is not
required under the Fair Labor Standards Act. Some factors municipalities may wish to consider as they design their comp time policy for exempt employees are:
• How many hours will an employee work in a workweek before they are eligible to earn comp time?
• Does the municipality want to limit the total amount of comp time that an employee can accrue at any given time?
• At what rate will employees earn comp time? One hour of comp time for each eligible hour worked?
• The policy should specify that comp time earned by exempt staff has no cash value upon termination or the end of the accrual period.
• At the end of the accrual period, does the municipality want to include a “use it or lose it” clause. An example would be that at the end of the accrual period (possibly fiscal year end), all comp time balances will be returned to zero. In many cases, exempt staff may work in excess of 40 hours per week. They tend to be management staff, committed to the organization and critical to the organizations’ mission. Many municipalities allow these exempt staff to earn and use compensatory time in a more flexible manner than non‐exempt staff. It is a challenge to employers when employees pose the idea that they are misclassified exempt, and were treated as non‐exempt, therefore creating overtime and pay obligations for the municipality. It is critical that exempt positions are reviewed and classified exempt with the greatest of caution and are treated exempt in all possible scenarios. Keep good documentation as to why you made the position exempt. Delineating through policy the way the two different categories of employees earn time and use time is one way to ensure differentiation that successfully defends the municipality. After considering these issues, if the employer elects to allow employees the option to earn comp time, document a compensatory time policy and communicate it to municipal employees. Employers must remember that employees who are subject to union contracts may be subject to different rules and policy implementation processes if specified by a collective bargaining agreement.
required under the Fair Labor Standards Act. Some factors municipalities may wish to consider as they design their comp time policy for exempt employees are:
• How many hours will an employee work in a workweek before they are eligible to earn comp time?
• Does the municipality want to limit the total amount of comp time that an employee can accrue at any given time?
• At what rate will employees earn comp time? One hour of comp time for each eligible hour worked?
• The policy should specify that comp time earned by exempt staff has no cash value upon termination or the end of the accrual period.
• At the end of the accrual period, does the municipality want to include a “use it or lose it” clause. An example would be that at the end of the accrual period (possibly fiscal year end), all comp time balances will be returned to zero. In many cases, exempt staff may work in excess of 40 hours per week. They tend to be management staff, committed to the organization and critical to the organizations’ mission. Many municipalities allow these exempt staff to earn and use compensatory time in a more flexible manner than non‐exempt staff. It is a challenge to employers when employees pose the idea that they are misclassified exempt, and were treated as non‐exempt, therefore creating overtime and pay obligations for the municipality. It is critical that exempt positions are reviewed and classified exempt with the greatest of caution and are treated exempt in all possible scenarios. Keep good documentation as to why you made the position exempt. Delineating through policy the way the two different categories of employees earn time and use time is one way to ensure differentiation that successfully defends the municipality. After considering these issues, if the employer elects to allow employees the option to earn comp time, document a compensatory time policy and communicate it to municipal employees. Employers must remember that employees who are subject to union contracts may be subject to different rules and policy implementation processes if specified by a collective bargaining agreement.