Employee Handbook

110. Exempt/Non-Exempt Employee Status  

Policy No. 110
Exempt/Non-Exempt Employee Status

Responsible Department: Human Resources
Responsible Administrator: Chief Human Resources Officer
Effective Date: April 2011
Reviewed/Updated Date: January 2023
Date of Scheduled Review: January 2027

PURPOSE

To define exempt and nonexempt employee status and to provide guidelines for

determining this status in accordance with federal regulations.

SCOPE

This policy applies to all employees of Abilene Christian University.

DEFINITIONS

Exempt Employees are individuals not subject to overtime pay laws. In general, overtime laws require that exempt employees:

• Receive a pre-determined weekly salary that is not subject to change based on the employee’s work quality or quantity;
• Receive a salary that is at least equal to the salary level set by law; and
• Meet the requirements of an exempt job classification.

The federal Fair Labor Standards Act (FLSA) sets the most common set of overtime exemption standards. However, additional state and local laws may also apply. Under the FLSA, the salary level is $684 per week ($35,568 per year) and exemptions exist for administrative, professional, or management positions. Certain outside salespersons and a few other job categories are also exempt.

Non-Exempt Employees employees who do not meet all criteria for an overtime exemption and are generally not exempt from overtime pay requirements.

PROCEDURE (OR PROCESS)

1. All job descriptions for newly created positions and for replacement positions will be reviewed and classified by the Office of Human Resources before they are posted to the University’s employment website.
2. In cases where a position’s exempt/nonexempt status is in doubt, the supervisor may request Human Resources review the classification. The Human Resources office will review these decisions by reviewing an updated job description and conducting interviews. Human Resources is responsible for making final decisions in all cases.
3. From time to time, the Office of Human Resources may conduct internal audits of a class of positions in an effort to ensure ongoing compliance with the FLSA.

Policy No. 111
Supplemental Payments
Responsible Department: Office of Human Resources
Responsible Administrator: Chief Human Resources Officer
Effective Date: June 2011
Reviewed/Updated Date: May 2016
Date of Scheduled Review: May 2020

SUPPLEMENTAL PAYMENTS

I. PURPOSE

To establish parameters for when it is and is not permissible to compensate an employee with a lump-sum, one-time or supplemental payment. See “Policy 210. Pay Days, Pay Arrangements and Hours of Work” for information on base pay for exempt and nonexempt employees. To ensure compliance with state and federal laws concerning minimum wage, overtime compensation, and pay days.

II. SCOPE

This policy applies to all employees of Abilene Christian University.

III. DEFINITIONS

Sporadic/Sporadically: Work that is occasional or intermittent and performed on a part-time basis. Assignments must be infrequent, irregular, or occurring in scattered instances (assignments may not be regular or recurring). Additional nonexempt duties performed by exempt employees for more than 10% of their work time will not be considered sporadic.

Supplemental payment: Also referred to as “one-time payments” or “lump-sum” payments. These payments are paid out to an employee without regard to hours worked. Supplemental payments may be for: a bonus, extra compensation for an employee’s hard work, a particular project an employee completes for a department, or another similar service.

IV. PROCESS

A. A nonexempt employee may on occasion be asked to perform work for a department other than their home department. In such situations, the employee will need to first get permission from their primary supervisor to perform such work. If approved, the employee must log the hours on their timesheet for their home department. The two departments may then work together to complete a journal entry to move money as needed.

B. In some cases it may be appropriate to pay a nonexempt employee with a supplemental, one-time payment. All one-time pays must be submitted on a nonexempt payroll basis (e.g. 15th or 29th for staff and the 8th or 22nd for students), and will be paid along with their nonexempt paycheck. If the supplemental payment is for hours worked, a time sheet must accompany the Personnel Action Form (PAF), and the payment must be discussed with Payroll or the Human Resources office before it is submitted to Payroll. It should be noted that if the supplemental payment is for hours worked, this payment will increase the employee’s base rate that is used to calculate overtime for the pay-period in which the supplemental payment falls. If the supplemental payment is not for hours worked, the PAF must have a very detailed description of what the supplemental payment is for. Examples of one-time, supplemental payments that do not affect a nonexempt employee’s base rate include but are not limited to the following:

1. Sums paid as gifts to reward service, the amounts of which are not measured by or dependent on hours worked, production or efficiency
2. Sums paid in recognition of services performed during a given period if the fact the payment is to be made and the amounts paid are determined solely by the supervisor at or near the end of the period, and the employee does not expect them on a regular basis

C. Exempt employees may on occasion be asked to perform work for a department other than their home department. In such situations, the employee will need to first get permission from their primary supervisor to perform such work. If approved, the exempt employee may receive one-time, supplemental payment if such work occurs sporadically. If the work will occur on a regular basis, please consult with the Human Resources office to determine the best method of compensation.

D. Student employees are considered to be nonexempt employees under the Fair Labor Standards Act (FLSA). Student employees should never be compensated solely with supplemental or one-time payments, unless they are listed out below as an exception.

1. Graduate Assistants are not considered to be employees under the FLSA if they are performing research in their field of study, performing work as a part of their training, or serve in a teaching capacity either as a requirement of their degree program or as a consequence of being enrolled as a graduate student at the University. Since Graduate Assistants do not have an employer-employee relationship with the university, they must be compensated using one-time payments.
2. Interns of the University are not considered to be employees under the FLSA. Interns cannot receive one-time payments through Payroll, but they may receive a stipend through Accounts Payable.

E. All temporary employees must be paid hourly.

F. No employee can receive one-time, lump-sum payments as their primary form of payment.

V. COMPLIANCE

Ongoing compliance with current laws and regulations will be monitored. This policy is subject to change when those laws and regulations change.