Department of Human Resource Management Policies and Procedures Manual
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Policy Number: 3.15 - Overtime Leave
Efft. Date: 8/16/93 Rev. Date: 6/10/07

PURPOSE

This policy provides guidelines to agencies for awarding overtime leave in lieu of overtime compensation when appropriate.
Definitions
Fair Labor Standards Act The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.
Non-Exempt Employee Non-Exempt employees are covered by the minimum wage and overtime requirements of the FLSA.  All classified employees whose annual salaries are less than $23,660 are non-exempt. Classified employees with salaries of $23,660 or higher are also non-exempt unless they are exempted from the requirements under Section 13, (a), or (b) of the FLSA. All hourly employees are non-exempt unless they are engaged as lawyers, physicians, teachers, or as computer employees paid $27.63 or more per hour.
Workweek

Describes period of time for which employees receive compensation.

Standard Workweek

The regular workweek for full time positions, which consists of a 5-day 40 hour per week schedule for every seven calendar-day period.

Alternate Workweek

Schedules that differ from the standard 40-hour workweek schedule. Alternative work schedules may include, but are not limited to, four 10 hour days, rotating shifts, flexible hours and job sharing.

FLSA Workweek

The FLSA requires that a fixed workweek or a work cycle (ex. 28 day work cycle) be established in order to determine overtime pay for non-exempt employees. An FLSA workweek includes 7 consecutive 24-hour periods, or 168 consecutive hours. Agency management has the discretion to establish that workweek. Where no other workweek has been established, the workweek will begin at 12:01 a.m. Sunday, and end at midnight Saturday. When establishing or changing the workweek, an agency should consult with DHRM.
GENERAL PROVISIONS
Earning Overtime Leave

Agencies may elect to grant overtime leave instead of overtime pay when an employee covered by the FLSA (non-exempt) works more than 40 hours in any workweek. Only hours physically worked are used to determine if compensation for overtime is required.

NOTE:  As provided in Section 7, (k) of the FLSA, overtime for employees in hospitals, law enforcement (including corrections officers and game wardens), and fire protection who work an alternate workweek or work cycle will be compensated after the required work period has been actually worked.
Notification

Agencies must provide written notification to affected employees of the decision to grant overtime leave prior to the performance of the overtime work. It is not necessary to inform employees each time they work overtime, if there is an agency policy that states when overtime leave will be granted in lieu of overtime pay and if that policy is clearly communicated to all affected employees.

Agencies do not need to adopt the same agreement or understanding with different employees and may choose, based on business needs, to provide overtime leave to some employees and overtime pay to others. However, agencies must compensate similarly situated employees consistently for overtime hours worked.
Conditions of Employment

An agency may require acceptance of overtime leave as a condition of employment. The agency may do this by including language to this effect in its overtime leave policy and communicating it to applicants when they are offered employment. The person must knowingly and voluntarily agree to acceptance of overtime leave as a condition of employment and the agency must inform the employee that overtime leave may be preserved, used, or cashed in a manner consistent with the provisions of Section 7, (o) of the FLSA.

Note:  Agencies can discontinue a policy of compensating non-exempt employees with overtime leave for overtime hours worked. However, if an agency has adopted a policy of granting overtime leave, even in specific situations, the agency must follow its policy consistently until a revised policy is issued and communicated to all non-exempt employees in the agency.

Documentation

Communication of the agency policy or condition of employment must be documented. For example, the employee may be asked to sign a statement indicating understanding of the policy, or the agency may retain a copy of a written policy transmittal or a signed acceptance of the letter offering them employment. If the policy is communicated orally, the agency must document the discussion with the employee. The agency also may retain an orientation check sheet indicating communication of the policy with the date and names of the parties involved. Documentation should be part of the official personnel file.
ACCRUAL OF OVERTIME LEAVE
Rate of overtime leave The rate of overtime leave is one and one-half hours of leave for every hour worked over 40 in any workweek. As noted, agencies may adopt an alternate workweek or work cycle for employees in hospital, law enforcement (including corrections officers and game wardens), and fire protection positions, pursuant to the FLSA.
Limitation

Employees may not have an overtime leave balance in excess of 240 hours, unless the employee holds a non-exempt public safety, emergency or seasonal position, in which case his or her overtime leave balance shall not exceed 480 hours. However, maintaining a maximum balance of 480 hours increases the agencies liability. Employees whose overtime leave hours have reached the 240- or 480-hour limit must be compensated with time and one-half overtime pay for additional overtime hours worked until the overtime leave balance has been  reduced through the use of leave or the payment of leave hours.

NOTE: Public Safety positionsinclude law enforcement, fire fighting or related activities; Emergency response positions includes dispatching of emergency vehicles and personnel, rescue work and ambulance services; Seasonal activity positions include work during periods of significantly increased demand, which are of a regular and recurring nature.
Establishment of Agency Accrual Limit Agencies may establish a lower limit of overtime leave that employees are allowed to accrue. As with the statutory limit, when the employee accrues the agency limit of overtime leave, he or she will not be allowed to accrue additional overtime leave until the balance is reduced, but will be compensated with overtime pay for overtime hours worked past the established limit.
Duration of Leave Overtime leave does not lapse, but is subject to a maximum accrued amount, as described above.
APPROVAL TO USE OVERTIME LEAVE
Supervisor Approval

Employees must request and receive approval from their supervisors to use overtime leave. Failure to obtain approval, however, will not remove the agency’s obligation to compensate an eligible employee for overtime worked.

Leave Approval

Agencies must approve the use of overtime leave as requested by the employee, or approve an alternate date within a reasonable time after the request, unless the absence would unduly disrupt the operations of the agency. Mere inconvenience to the agency, such as the need to schedule other employees to work overtime hours to provide coverage, is an insufficient basis for denying a request to use overtime leave.

Scheduling Leave Usage

  • Agencies may choose to schedule an employee’s use of overtime leave in order to manage overtime leave liability; and
  • Agencies can adjust an employee’s work schedule temporarily within a workweek to avoid overtime liability or to meet operational needs.
Paying Down Overtime Leave Balances In order to manage its overtime leave liability, an agency may pay a part or all of an employee’s overtime leave balance at any time, based on the employee’s regular hourly rate at the time of the payment.
IMPACT OF STATUS CHANGE
Movement Within the Agency Employees will retain their accrued overtime leave if they move to different positions within their agencies.
Leaving State Service or transferring to a different agency Employees are paid a lump sum for the full amount of their accrued overtime leave balance when they transfer to another agency or separate from state service. This includes separations by resignation (including resignation from layoff status), retirement, layoff, discharge, death, or transition into LTD.
Payment Upon Death Payment shall be made to the Administrator or Executor/Executrix of the employee’s estate. If there is no Administrator or Executor,
payment shall go to the surviving spouse, or if none, to the next of kin in accordance with section 64.1-123 of the Code of Virginia.
Rate of Payment When employees separate from state service, overtime leave balances must be paid at the employee’s last hourly pay rate (regular rate) or the employee’s average hourly pay rate over the last three continuous years of employment, whichever is higher.
Military Leave

Employees on active military duty have options available for use of their overtime leave balances. Leave balances may 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.
NOTE: At the employee’s option, payment may be made in either:
  • Lump sum, or
  • Through the regular payroll schedule.

AGENCY RESPONSIBILITY

Agencies are responsible for:

  • Developing and communicating their policies for compensation of overtime, as described above;
  • Providing supervisors with appropriate training necessary to manage employees, including training on the impact of the FLSA.
AUTHORITY
The Department of Human Resource Management issues this policy pursuant to the authority provided in Chapter 12, Title 2.2 of the Code of Virginia.
INTERPRETATION

The Director of the Department of Human Resource Management is responsible for official interpretation of this policy, in accordance with section 2.2-1201 of the Code of Virginia.

Questions regarding the application of this policy should be directed to the Department of Human Resource Management's Office of Agency Human Resource Services.

The Department of Human Resource Management reserves the right to revise or eliminate this policy at any time.
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