Overtime Pay vs. Compensatory Time

See UNL’s Attendance and Work Schedules policies.

Example:

John is hourly and works 42 hours in a work week
Overtime Pay = John is paid for 43 hours for the work week
Compensatory Time = John is paid for 40 hours for the work week and banks 3 hours of compensatory time earned (CME) to be used in the future as an approved absence or time off.

Time Entry

Overtime pay is automatically calculated by ESS Time. Any hours worked over 40 will be paid at one and one-half the employee’s hourly rate, and the hours do not need to be coded as OTD for the employee to receive overtime pay.

Compensatory time earned is coded as CME. The additional hours worked over 40 must be coded as CME in ESS Time. The system will multiply hours coded as CME by one and one-half and the total will be added to the employee’s CME balance. Employees must have a signed Compensatory Time Agreement (direct download) on file to accept compensatory time in lieu of overtime. The time coordinator is responsible for verifying the form has been completed when auditing payroll and CME is used.

Compensatory time earned that has been banked must be used in a future biweekly pay period and the absence hours are coded as CMU (compensatory time used) in ESS Time. Compensatory time earned does not expire or have to be used within a certain time period.

Additional Resources

Employment Law Essentials: Hours Worked Compliance
A Supervisor's guide to stay in compliance with the Department of Labor's Fair Labor Standards Act (FSLA) for hourly employees.
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