Overtime Pay

Non-exempt staff members will be paid overtime compensation at one-and-one-half their regular rate of pay for all hours worked in excess of 40 hours in a workweek. Only time worked (not exception time) is counted toward the 40 hours per week required for overtime at one-and-one-half the regular rate of pay. (Staff represented by a collective bargaining unit should consult their agreements concerning overtime.)

Weekly Overtime: Covers most non-exempt staff (see SPG 201.38)

Pay for all qualifying overtime hours (more than 40 hours of actual time worked) is paid at one-and-one-half times the staff member’s regular hourly rate of pay.

Exception time such as vacation, sick, PTO, holiday, military, reserve duty, season days, educational time, funeral, extended sick, and time for jury duty is not counted toward the 40 hours/week of time worked that is required for overtime pay.

Pay for working more than 8 hours in a day will be at the staff member's regular hourly rate until at least 40 hours of time worked have accumulated in that week.

Below is a complete list of the time reporting codes for categories of time worked that count toward the 40-hour per week threshold required for pay at one-and-one-half the regular hourly rate.

ECW - Emergency Closing-Worked

Used to report time for hours worked on an emergency closure day.  Also adds time to vacation/PTO leave balances.

ESW - Extended Sick Half-Work Hours

Used when an employee reports both extended sick-half hours and work hours in the same pay period, to ensure the employee receives the correct pay.  This time reporting code is entered by the Payroll Office and replaces the REG that was reported.

HPB - Hospital Business

Used to report time away for Hospital business (salaried employees).

OTR - OverAppt Regular 1.0

For part-time non-exempt employees, used to report hours paid in excess of base pay hours, if total hours are less than or equal to 40 hours in the workweek.

For full-time non-exempt employees, used to report hours worked during a week in which exception time is also reported, and the total hours reported exceed 40 hours for the workweek. For this scenario, the exception time hours have been reported using Time Reporting Codes that are not considered “time worked” for the purpose of calculating overtime (OTP) for the workweek.

REG - Regular

Used to report hours worked.

SEW - Season Time Worked

Used to report time for hours worked on a Season Day. Also adds time to vacation/PTO leave balances.

Questions and Answers About Overtime Administration

Do sick, PTO or vacation hours accumulate toward the 40 hours required for overtime?
No. The categories are examples of exception time, which is not counted toward the 40 hours required for overtime pay at time-and-one-half the regular hourly rate.
What if a staff member works on a holiday?
Hours actually worked on the holiday will count toward the 40-hour requirement for overtime pay. The staff member will be paid according to the University Holiday (SPG 201.26-0).
When do part-time employees receive overtime pay?
Employees on a part-time appointment (fractional appointment) are paid at their regular hourly rate for each hour above their weekly appointed hours until they reach a total of 40 hours for the week. Hours beyond 40 per week are eligible for pay at time-and-one-half the regular rate.
What if an employee works on his/her lunch break?
Departmental lunch breaks when unpaid are either 30 or 60 minutes and are scheduled by the department. During this time, the staff member cannot be required to continue to perform job duties unless he or she is paid for the work time. When the lunch period is a paid portion of the regularly scheduled work day, it can't exceed 20 minutes. In these cases, staff members are expected to eat lunch as time and work schedule permit.
If an employee is called back to work, is that time included as time worked for the purposes of calculating overtime?
If the employee actually works when being called back, yes. If the employee is sent back home without working, he/she receives call back pay but those hours do not count toward the 40/week because they are not actually hours that are worked.
Does an employee need to be paid overtime if the supervisor did not approve it?
Yes. If non-exempt employees perform work, they must be paid for it. However, supervisors have discretion to establish overtime approval processes. If an employee continues to work overtime without supervisor approval, then the supervisor could begin taking possible disciplinary action with the employee.
Can a supervisor require overtime?
Yes, overtime can be required. Supervisors are encouraged to give as much notice as possible to staff members.
Can a supervisor request or require that a non-exempt employee work over 8 hours in a day or 40 hours in a week?
Yes. Extra hours worked by a non-exempt staff member must be paid at a straight or overtime rate according to SPG 201.38.
Can a supervisor request or require that a non-exempt employee work over 8 hours in a day or 40 hours in a week and offer compensatory (comp time) instead of overtime?
No. A compensatory time arrangement occurs when an employee works more than 40 hours in one workweek, e.g. 46. Rather than be paid for the additional six hours at one and a half times the employee’s regular rate, s/he is given 9 hours (one and one-half times the hours worked) off during some other workweek. This is not permissible. Non-exempt employees must be paid for overtime.
Is overtime pay a requirement by law or our policy?
Overtime pay to non-exempt staff is required both law and University policy when more than 40 hours per workweek are actually worked.
Can a non-exempt employee waive overtime?
No, employees don’t have the option of waiving the legal requirements.
If evening work is required for a special need, can a non-exempt staff member’s daytime hours be reduced and replaced with evening hours?
Yes, the schedule of an employee can be changed to meet the needs. This is called an “alternate” or “special” schedule. Advance notice should be provided to the employee. If an employee works an alternate or special schedule, and the total hours worked do not exceed 40 in a single workweek, no overtime is incurred.
Can work schedules be changed by the unit?
Yes. Although schedules should not change from day-to-day, work schedules can be changed to accommodate the needs of the unit and to avoid a special need for additional work hours and overtime compensation. According to SPG 201.67 regarding Work Schedules, regularly recurring consecutive hours of work should be provided whenever practical.
Must overtime be paid if a non-exempt staff travel overnight on business outside of regular working hours?
  • If an employee travels during regular working hours, yes, the regular pay continues. In other words, the employee should not suffer a loss of regular compensation.
  • If the traveling occurs outside of normal working hours, there is no additional compensation unless there was work performed at the same time (i.e., working on a plane or train.)
  • If work (or training) on the trip is over 40 hours, all of the additional time worked is paid as overtime.
  • If travel is required on the weekend that is within normal daily work hours (typically 8 to 5 for most), it must be paid.
  • (Note: The rules governing compensation while on overnight business travel for non-exempt staff are complex. Please speak with your HR Consultant for guidance based on specific circumstances.)
What if an employee must work at an event outside of regular working hours (i.e., entertaining donors at an evening social function)?
A staff member working outside of regular working hours is still working. The time is considered time worked and counts toward the 40 hours per week requirement for overtime pay.

Sample Timesheets for Overtime Reporting

40-hour appointment and normal schedule is five 8-hour days, Monday through Friday, with scheduled PTO time reported.

Work week SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 8 8 8 8 8 40
Actual Hours 8 8 PTS 8 PTS 8 PTS 8 PTS 8 48
Report Hours As 8 REG 8 PTS 8 PTS 8 PTS 8 PTS 8 OTR 8 REG, 32 PTS, 8 OTR

24-hour appointment and normal schedule is three 8-hour days, Monday/Wednesday/Friday.

Work week SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 8 8 8 24
Actual Hours 10 8 8 26
Report Hours As 10 REG 8 REG 6 REG
2 OTR
24 REG, 2 OTR

40-hour appointment and normal schedule is five 8-hour days, Monday through Friday, with Jury Duty time reported.

Workweek SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 8 8 8 8 8 40
Actual Hours 8 8 8 JRD 10 10 44
Report Hours As 8 REG 8 REG 8 JRD 10 REG 6 REG
4 OTR
32 REG, 8 JRD, 4 OTR

40-hour appointment and normal schedule is five 8-hour days, Sunday through Thursday, and the holiday Monday is not worked.

Workweek SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 8 8 8 8 8 40
Actual Hours 8 8 HOL 8 8 8 6 46
Report Hours As 8 REG 8 HOL 8 REG 8 REG 8 REG 6 OTR 32 REG, 8 HOL, 6 OTR

40-hour appointment and normal schedule is five 8-hour days, Monday through Friday, and the holiday Monday is not worked.

Workweek SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 8 8 8 8 8 40
Actual Hours 8 HOL 8 8 8 8 10 50
Report Hours As 8 HOL 8 REG 8 REG 8 REG 8 REG 8 OTR
2 OTP
32 REG, 8 HOL, 8 OTR, 2 OTP

40-hour appointment and normal schedule is five 8-hour days, Sunday through Thursday, and the holiday Monday is worked.

Workweek SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 8 8 8 8 8 40
Actual Hours 8 10 8 HOL 8 8 8 50
Report Hours As 8 REG 8 HOL 10 OTP 8 REG 8 REG 8 REG 32 REG, 8 HOL, 10 OTP

40-hour appointment and normal schedule is four 10-hour days, Monday through Thursday, with Funeral Time reported.

Workweek SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 10 10 10 10 40
Actual Hours 10 FRL 10 10 12 42
Report Hours As 10 FRL 10 REG 10 REG 10 REG 2 OTR 30 REG, 10 FRL, 2 OTR

40-hour appointment and normal schedule is four 10-hour days, Monday through Thursday, with Sick Time reported.

Workweek SUN MON TUE WED THUR FRI SAT TOTAL
Work Schedule 10 10 10 10 40
Actual Hours 10 SCK 10 10 10 10 50
Report Hours As 10 SCK 10 REG 10 REG 10 REG 10 OTR 30 REG, 10 SCK, 10 OTR

Administration of Overtime for Non-Bargained-for Employees

As administered by the U.S. Department of Labor, non-exempt employees covered by the Fair Labor Standards Act (FLSA) must receive overtime pay (one and one-half times their regular rate of pay) for hours worked over 40 in a workweek.

The employees who are required to receive overtime compensation are called non-exempt. You are required by law and U-M policy to pay them overtime.

Frequently Asked Questions about FLSA and Changes in Exemption Status at U-M

What is FLSA?
The Fair Labor Standards Act (FLSA) establishes certain minimum wage, overtime pay, record-keeping and child labor standards for employers. Regulations issued by the federal government guide employers in determining whether a position should be “exempt” (not entitled to overtime pay) or “nonexempt” (entitled to time-and-one-half overtime pay), commonly known as the FLSA designation or FLSA exemption status.
What does FLSA exemption status determine?
It determines whether a position is eligible for time-and-one-half overtime pay. At U-M, FSLA status also determines whether an employee is paid monthly or biweekly, the accrual rate for paid vacation time or Paid Time Off (PTO) for Health System employees, and how staff report time worked.
If my position is changing from exempt to nonexempt, will I begin to be compensated for overtime?
Yes. Nonexempt staff are required to receive time-and-one-half overtime (including shift premium, if applicable) for time worked in excess of 40 hours in a calendar week (unless working a special schedule). All staff members must seek approval from their supervisor prior to working overtime.
Am I still entitled to receive overtime pay if my position is changing from nonexempt to exempt?
No. Exempt employees are not entitled to overtime pay. Please talk with your supervisor to determine workload expectations for your position and whether there are any compensation or reward plans to recognize extraordinary contributions.
What impact does FLSA status have on time reporting?
Exempt staff report time monthly, with exceptions reported in half-day increments.
Nonexempt staff report time biweekly with exceptions reported to the nearest one-tenth of an hour.
How will my pay period frequency change as a result of a change in FLSA status?
Exempt staff receive a monthly paycheck. Nonexempt staff are paid biweekly.
Is anything else affected by changes in FLSA exemption status?
No. Base pay rate, current job duties, and benefits are not affected by FLSA exemption status changes.
I am used to having flexibility in my work hours. Can this continue?
Yes. Special or alternate scheduling is allowed within the same workweek. For example, if you normally work 8 hours a day, and have a personal appointment on Monday that only allows you to work 6 hours, you and your supervisor can agree that you will make up the time later in the same workweek. Another example would be if your typical schedule is 8 hours a day during the day, and your department needs you to work a special event for 4 hours during the evening. Your schedule may be changed to give you 4 hours of time off at another time during the same workweek. Note: Special or alternate schedules must be within a single workweek.
Will I still get a paycheck if I don't turn in my time report on time?
You must report hours worked and exception time for each pay period before the cutoff. If an unusual event occurs and you are unable to submit your time report before the deadline, you will be paid for your base hours. However, the Payroll Office will not be able to process exception time (i.e., overtime, vacation time, PTO) without your time report. Any exception time will be processed in a future payroll. Therefore, you need to submit time reports prior to the cutoffs to avoid a delay in pay for all hours worked within the pay period and to ensure your leave balances are up-to-date.
How many times per year will I get paid?
If you are changing from exempt to nonexempt, you will be paid 26 times per year. There will be two months each year in which you will receive three (3) paychecks (when there are five Fridays in the month). During the rest of the year you will receive two checks per month. The months with three pay dates change from year to year based on the calendar. All biweekly pay dates can be viewed on the Payroll Office website.
If you are changing from nonexempt to exempt, you will be paid monthly, or 12 times in a year. Monthly pay dates can be viewed on the Payroll Office website.
If I am changing from exempt to nonexempt, how will my deductions be affected?
Deductions will be taken based on the table below. For instance, if your medical insurance co-premium is $100 per month, the first two checks of each month will have $50 deductions taken from each to cover your total monthly contribution to medical insurance.

Deduction Types and Frequency for Biweekly-Paid Staff

Taken Over 26 Biweekly Pay Periods

  • 5% Retirement Contribution
  • Supplemental Retirement Account
  • Gifts to the University of Michigan
  • Garnishments, Tax Levies, and Friend of the Court
  • Other Miscellaneous Deductions for Non-Benefit Items

Taken Over 24 Biweekly Pay Periods (2 Times Per Month)*

  • Medical (Health, Dental, Vision)
  • Life Insurance
  • Long Term Disability
  • Long Term Care
  • Flexible Spending Accounts for Medical Reimbursement and Dependent Care

Taken Once Each Month (2nd check unless otherwise indicated)

  • U.S. Savings Bond
  • United Way
  • Parking
  • Athletic Tickets

Deductions that are taken over 24 biweekly pay periods are taken in the first and second biweekly paychecks each month.  During months with three biweekly paychecks, these deductions are not taken from the third paycheck.

If I am changing from nonexempt to exempt, how will my deductions be affected?
Deduction Types and Frequency for Monthly-Paid Staff
Taken Once Each Month
  • Medical (Health, Dental, Vision)
  • Life Insurance
  • Long Term Disability
  • Long Term Care
  • Flexible Spending Accounts for Medical Reimbursement and Dependent Care
  • 5% Retirement Contribution
  • Supplemental Retirement Account
  • U.S. Savings Bond
  • United Way
  • Gifts to the University of Michigan
  • Parking
Will changes in pay frequency impact my Basic Retirement Plan contributions?
No. Your 5% contribution and the 10% U-M match under the Basic Retirement Plan will automatically adjust to deduct according to your pay frequency rate.
Will changes in pay frequency impact my Supplemental Retirement Account (SRA) contributions?
Yes. The scheduled contribution to your Supplemental Retirement Account (SRA), if you have one, is a fixed amount that is deducted each time you are paid, rather than as a monthly total. If your pay frequency is changing to a biweekly schedule, to maintain the same monthly total, you will need to reduce the current amount by one-half. Otherwise, the total extra or SRA amount taken each month will double from your current monthly amount since it will be deducted with each biweekly paycheck. It will be deducted three times during the two months each year with three biweekly paydates.
If your pay frequency is changing to a monthly schedule, you will need to double your current amount in order to maintain the same monthly total. Otherwise, the total extra or 403(b) SRA amount taken each month will be one-half of what was previously deducted biweekly.
To change the amount of your 403(b) SRA contribution to adjust for changes to pay frequency, you may make changes to your contribution amount in Wolverine Access
When will my monthly vacation or PTO accrual be credited? Is it available for use immediately?
Vacation/PTO time is available for use at the beginning of each pay period that includes the first of the month in which it is accrued.