The provisions of the federal Fair Labor Standards Act (FLSA) determine which employees in the workforce qualify for overtime pay. The positions that qualify for overtime pay are called “non-exempt” (the employees in these positions are not exempt from the overtime provisions of the Act) or “overtime eligible.” Those positions that do not qualify for overtime pay are called “exempt” (the employees in these positions are exempt from the overtime provisions).
In some states there are both federal and state exemption requirements. Where state and federal regulations vary, the regulations imposing the higher standard generally apply. Massachusetts law tracks the federal FLSA regarding exemption requirements and the calculation of overtime pay.
A. Exemption from Overtime Requirements
Administrative/professional/executive positions as defined by the FLSA are legally exempt from the overtime requirements of the FLSA and the University’s overtime policy. The local human resources office or the Harvard Human Resources Compensation Department, using the appropriate FLSA tests, makes determinations of exempt status.
Exempt employees are not eligible for compensatory time.
B. Salary Basis Policy
Exempt employees must be paid on a “salary basis,” meaning that such employees regularly receive a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work. Subject to exceptions listed below, an exempt employee must receive the full salary for any workweek in which the employee performs any work, regardless of the number of days or hours worked. Exempt employees need not be paid for any workweek in which they perform no work. If improper deductions are made from an employee’s predetermined salary, that employee is not paid on a “salary basis.”
Deductions from pay are permissible:
- In the initial or terminal week of employment
- For absences from work of one or more full days for personal reasons other than sickness or disability
- For absences of one or more full days due to sickness or disability when made pursuant to a sick pay policy that provides pay for salary lost due to illness (including deductions for full-day absences once the employee has exhausted the paid leave allowance)
- To offset amounts employees receive as jury or witness fees, or for military pay
- For unpaid disciplinary suspensions of one or more full days for workplace conduct rule infractions (see Employee Conduct Policy) or for violations of safety rules of major significance
- For unpaid leave (either partial day or full day) under the Family and Medical Leave Act
It is Harvard’s policy to comply with the salary basis requirements of the FLSA. Employees are advised that the University does not allow deductions that violate the FLSA, and that making any improper deductions from the salaries of exempt employees is not permissible.
An employee who believes that an improper deduction has been made to his or her salary should immediately report this information to his or her supervisor, local human resources office, or the Office of Labor and Employee Relations. Employees may also raise the issue under the Procedures to Resolve Work-related Problems.
Reports of improper deductions will be promptly investigated. If it is determined that an improper deduction has occurred, the employee will be promptly reimbursed for any improper deduction made.
C. Overtime Policy for Overtime-Eligible, Non-Bargaining Unit Employees
Generally, overtime-eligible non-bargaining unit employees may only work overtime with their supervisor’s approval and/or in accordance with the overtime policy of the local human resource department.
Harvard’s standard workweek begins on Sunday morning at 12:01 a.m. and ends the following Saturday at 12:00 midnight. Overtime compensation requirements apply to all overtime-eligible non-bargaining unit employees of the University, including student employees and overtime-eligible temporary and less than half-time employees.
- An employee who works more than 40 hours during a particular workweek will be paid at time and one-half the regular rate for all hours worked over 40 in that workweek.
An employee who works more hours than their regular schedule but not more than 40 hours during a particular workweek may either:
- Be paid straight time (regular hourly rate) for these additional hours; or
- Assign to him/herself the right to receive compensation for these hours at a future date by banking these hours in a non-interest bearing compensatory time-off account for future use as paid time off. Such time off must be arranged in advance with the supervisor. The employee may at any time elect to receive the payment instead of the compensatory time off.
Employees cannot accrue more than 40 unused compensatory hours. Although these hours may be carried over from year to year, they must be paid out at termination and will ordinarily be paid out at the current rate of pay at the time of transfer to another position outside the department or school.
If an employee works extra straight time hours and is given the same amount of time off (flex time, not compensatory time) during the same workweek and the hours worked in that week do not exceed 40 hours, that employee is not entitled to overtime pay at the time and one-half rate. (Under Harvard policy, time “paid” is considered time “worked” when it covers a paid absence, e.g., a holiday, sick, vacation or personal leave, with the exception of compensatory time off.)
D. Definition of Hours Worked
In calculating hours worked for overtime pay purposes, all hours “paid” are considered hours “worked” as a matter of Harvard policy. That is, if an employee is paid for extra hours in a workweek that includes a paid absence (e.g., a holiday, sick, vacation or personal leave), the paid absence must be considered time worked and the employee must be compensated according to the overtime policy. The exceptions to this rule would be payment for hours included in the compensatory time-off account.
Last updated: 05/21/2008