Overtime

Exempt vs Non-Exempt

Cities cannot simply make an employee “salaried” (paid a set amount per pay period regardless of the hours worked) unless the employee fits certain categories established by the Fair Labor Standards Act (FLSA). While commonly referred to as “salaried” or “hourly” the legal terms are “exempt” or “non-exempt.”  

A non-exempt employee is subject to the recordkeeping and overtime provisions of the FLSA and is entitled to overtime pay (or compensatory time). For most non-exempt employees this would require payment of 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. Governmental employers are permitted to give their employees compensatory time off instead of cash payments for overtime at a rate of 1.5 hours of time off for each hour of overtime worked. In most cases if a non-exempt employee works more than 40 hours they are required to be paid overtime or allowed compensatory time; the employee cannot volunteer their time or negotiate a lower overtime rate. An employer cannot have a policy that states they will not pay overtime or give compensatory time; if it is worked it must be paid or given. Instead, unauthorized overtime should be treated as a disciplinary matter.

An exempt employee is not subject to most recordkeeping or the overtime provisions of the FLSA. In most cases an exempt employee must be paid on a salary basis, not subject to reduction based on the quality or quantity of work performed. There is a salary basis test which, as of November 15, 2024, requires a minimum salary of at least $684 per week or $35,568 per year to qualify.  

In addition to the salary test, the employee must fit into one of the following three categories: executive, professional or administrative. Job descriptions should accurately reflect the work performed and outline how that position qualifies for one of the exemptions.

Executive employee exemption requires:

• Management of city or department.
• Direct supervision of two full-time employees or the equivalent.
• Ability to hire, fire or ability to make recommendations that carry significant weight.

Professional employee exemption requires:

• Performance of work requiring advanced knowledge.
• Performance of work in a field of science or learning.
• Knowledge acquired by a prolonged course of intellectual study.

Administrative employee exemption requires:

• Primary duty involves office or non-manual labor.
• Exercise discretion and independent judgment with respect to matters of significance.

Wage and Hour Issues for Non-Exempt Employees

On-Call Time: The determining factor if on-call, stand-by or call-back time is compensable is whether the time is spent predominantly for the employer’s benefit or the employee’s benefit. According to federal regulations an employee who is required to remain on the employer’s premises or so close thereto that they cannot use the time effectively for their own purposes is working while ‘on-call’. While an employee who is merely required to leave word where they may be reached is generally not considered to be working while on-call. 

Breaks: The FLSA does not require that breaks be given to employees. If however, an employer does give its employees breaks and/or rest periods of less than 20 minutes, the FLSA requires that the time be counted as hours worked.

Meal Time: Meal time or breaks may be excluded from hours worked if the meal period is at least 30 minutes, the employee is completely relieved of all duties and is free to leave their duty posts during the time.

Travel Time: Ordinary travel from home to work (commuting) is not counted as time worked. The exception is if the employee goes home after the normal work day and is called back to handle an emergency; this travel time is generally counted as hours worked. Travel outside the city is covered by two sets of rules depending on if an overnight stay is required. If an employee is given a one-day assignment in another city and does not stay overnight, the travel time is generally counted as time worked. If the assignment requires an overnight stay, time spent traveling to the other city is counted as hours worked only to the extent that it coincides with the employee’s regular workday. If, on the other hand, the travel on an overnight trip occurs during hours that are outside the employee’s regular workday it need not be counted as hours worked unless the employee actually performs work for the employer while traveling during those regularly unscheduled hours.

Compensatory Time: Law enforcement, fire protection and emergency response personnel and certain employees engaged in seasonal activities may accrue up to 480 hours of compensatory time; all other local government employees may accrue up to 240 hours. An employee must be permitted to use compensatory time on the date requested unless doing so would “unduly disrupt” the operations of the agency. It is advisable to create lower limits, as unused compensatory time is a liability that is paid out in full when an individual is no longer employed with the city. Payment is based on the current hourly rate and not the rate in which it was earned over time.  

This information is provided as general information on the subject of overtime. Due to the complexities of the FLSA, it is recommended that you consult with your city attorney or the Wage and Hour Division of the U.S. Department of Labor when making personnel decisions or policies. The Des Moines District Office of the U.S. Department of Labor can be reached at (515) 284-4625.​​​​​​