Accounting for Uncompensated Time Policy

PURPOSE

To state the Company policy regarding the accounting for uncompensated time for exempt employees.

POLICY

It is GovC policy to account for uncompensated time in a manner that reflects a fair distribution of the exempt employee's labor costs among multiple cost objectives, while not discouraging employees from devoting extra time to the Company's business. Exempt employee compensation is based upon the accomplishment of assigned responsibilities rather than working a specific number of hours. Some variability of hours is inherent in all salaried positions. Accordingly, the working of occasional overtime by exempt employees is not to be construed as an extended workweek for which additional compensation is paid.

DEFINITIONS

Standard workweek shall consist of forty hours of five consecutive eight-hour days, commencing on Monday. However, there may be situations where an employee is scheduled to work a different number of hours or different schedule, whether permanently or for a period of time. In such cases, the Standard Workweek corresponds to the actual schedule. For the purposes of this policy, the forty-hour standard workweek will be used throughout.

Base salary is the hourly salary rate times 40 for a forty-hour week, exclusive of any supplementary compensation for work performed during the normal workweek.

Payroll week is a seven-consecutive-day period beginning at 12:01 a.m. Monday and ending at midnight on the following Sunday.

Exempt Employees are those personnel who qualify for exemption from the mandatory overtime payment provisions of the Fair Labor Standards Act.

Nonexempt Employees are those personnel who are subject to the overtime and other provisions of the Fair Labor Standards Act, and/or state labor laws as applicable.

Overtime for exempt employees is the time worked beyond the standard forty-hour week schedule.

Uncompensated Overtime is incidental or unscheduled overtime hours worked, with or without specific direction, to accomplish work objectives on authorized projects. Except as described below, all "Uncompensated Overtime" hours must be recorded.

Policy

It is GovC policy that all time worked be recorded.

Procedure

The Corporate Business Office will allocate employee labor costs to each cost objective by computing a separate average labor rate for each week, based on salary paid the employee divided by the total hours worked (both paid and unpaid). The salary cost will then be distributed to each cost objective worked during the week based on this average rate.

Example: Employee #150's weekly salary is $1,000. In a normal forty (40) hour workweek, this employee's hourly rate is $25. If this employee works a fifty (50) hour workweek and only gets paid for forty (40) hours, his average rate per hour has been reduced to $20. All charges to cost objectives worked on by this employee during the week would be at the $20 rate.