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rsmith

Overtime without Premium Pay on a Cost type contract

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I've read the regulations and DCAA's CAM regarding overtime, but most of it refers to premium pay.

On a cost type contract, is there an issue with paying exempt employees straight time overtime? These are salaried employees that typically work 40-45 hours a week, however for a few weeks they'll have to work 50-60 due to a surge in activity and some people leaving the department. 

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How about uncompensated overtime?  That’s legal.

A cost-reimbursement contractor should have a disclosure statement that explains how it treats costs.  Its treatment of overtime pay for exempt employees should not vary from contract to contract.

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37 minutes ago, ji20874 said:

How about uncompensated overtime?  That’s legal.

A cost-reimbursement contractor should have a disclosure statement that explains how it treats costs.  Its treatment of overtime pay for exempt employees should not vary from contract to contract.

We have plenty of uncompensated overtime that's properly accounted for. However, this is a special case of an unexpected surge in workload where people that typically don't work much uncompensated O/T are going to be required to work extra hours and we would like to compensate them for it. 

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1 minute ago, ji20874 said:

Does your existing disclosure statement cover your situation?  

Just that O/T premium is direct, however in this case we wouldn't pay a premium, just straight time. 

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Does your contract include the clause at FAR 52.222-2, Payment of Overtime Premiums?  You might have to get approval before incurring any overtime, whether or not compensated, depending on the reason for the overtime and/or the amount of the overtime premium.

If you are allowed to pay overtime premiums under the contract (a YES or NO question), then the method of payment to your employees is governed by your disclosure statement.  If your disclosure statement is silent, then generally any reasonable common or customary approach can be justified.  You can get the government's approval up front, such as by updating your disclosure statement or entering into an advance agreement (FAR 31.109).  Or, you can wait and get the government's approval after you incur the costs and submit your voucher or invoice.

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The contract says any OT premium above $0 has to be approved. Originally my thought was that premium represented the portion above straight time, but reading through it again I can see how any OT pay, even straight time could be considered premium. 

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54 minutes ago, rsmith said:

We have plenty of uncompensated overtime that's properly accounted for. However, this is a special case of an unexpected surge in workload where people that typically don't work much uncompensated O/T are going to be required to work extra hours and we would like to compensate them for it. 

What you are describing is commonly called "Extended Work Week" and, in accordance with your HR Policy regarding EWW (assuming you have one), exempt salaried employees that work approved EWW may be paid for hours in excess of 40 at straight-time rates. The contract clauses cited do not prohibit doing so, since no premium pay is involved.

Have at it.

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24 minutes ago, here_2_help said:

What you are describing is commonly called "Extended Work Week" and, in accordance with your HR Policy regarding EWW (assuming you have one), exempt salaried employees that work approved EWW may be paid for hours in excess of 40 at straight-time rates. The contract clauses cited do not prohibit doing so, since no premium pay is involved.

Have at it.

Thank you! that's very helpful. 

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2 hours ago, rsmith said:

Thank you! that's very helpful. 

So you're saying that my username checks out

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18 hours ago, here_2_help said:

What you are describing is commonly called "Extended Work Week" and, in accordance with your HR Policy regarding EWW (assuming you have one), exempt salaried employees that work approved EWW may be paid for hours in excess of 40 at straight-time rates. The contract clauses cited do not prohibit doing so, since no premium pay is involved.

This is not an uncommon practice so it should not be viewed as an aberration to experienced and knowledgeable contracting officers.

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I work on a contract that allows this IAW their disclosure statement.  I have heard over the cubes that some folks working for the KTR are grumbling as some exempt employees get the straight time whereas others do not.  A good way to lose quality folks, if you ask me.  I often wonder if the USG is getting billed for those over and above hours and not paying the employees putting in the hours.

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12 minutes ago, GtarJohn said:

I work on a contract that allows this IAW their disclosure statement.  I have heard over the cubes that some folks working for the KTR are grumbling as some exempt employees get the straight time whereas others do not.  A good way to lose quality folks, if you ask me.  I often wonder if the USG is getting billed for those over and above hours and not paying the employees putting in the hours.

Indeed, paying some folks for EWW (straight-time) while requiring others to put in "casual overtime" (aka "sweat equity") is a great way to destroy esprit de corps. Use of EWW needs to be justified. At one company (long ago) it was justified on the basis of a large number of required OT hours to be put in over a long duration. There were certain standards -- i.e., had to be at least 5 OT hours/week over at least 8 weeks, if I recall correctly. (Related note: at this time my entire project team put in a minimum of 50 hours/week each week for more than a year. As I recall, my average work week was Monday - Friday @ 11 hours/day plus Saturday @ 8 hours plus Sunday @ 4 hours. For more than a year. Including holidays. So, yeah: pay me.)

There are contract clauses that discuss "uncompensated overtime" intended to protect USG from contractors getting a competitive advantage from the use of it. Moreover, DCAA (or equivalent) is always available to review a contractor's practices in this area; and I suggest that more COs who have concerns in this area should task DCAA to address those concerns. That said, remember that, on a T&M contract, the contractor does NOT have to compensate the employees for the hours to be billable. The hours simply have to be incurred to benefit the project, whether or not the employee is getting paid for them. So concerns about this issue with respect to a T&M contract may be misplaced.

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4 hours ago, GtarJohn said:

I often wonder if the USG is getting billed for those over and above hours and not paying the employees putting in the hours.

What does this mean?

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16 hours ago, Retreadfed said:

What does this mean?

Exactly what it sounds like (assume cost reimbursable contract or task order).

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Are you wondering if contractor’s are submitting false payroll information on cost reimburse contracts or task orders? 

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Folks,

Assuming a cost-type contract, the answer to GtarJohn's question could be, possibly, yes. And it would be appropriate for a contractor to do so in certain, limited, circumstances. So what? That's why you government folks have DCAA. Use them to address your concerns, please.

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5 hours ago, GtarJohn said:

Exactly what it sounds like (assume cost reimbursable contract or task order).

It sounds like mumbo jumbo.  Read what you wrote again.  It doesn't make sense.

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5 minutes ago, Retreadfed said:

It sounds like mumbo jumbo.  Read what you wrote again.  It doesn't make sense.

It does not and you obviously are gaining some kind of personal gratification by trolling every one of my responses.  I'm done with posting on this site...admin can delete my profile if they so choose. 

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4 hours ago, GtarJohn said:

It does not and you obviously are gaining some kind of personal gratification by trolling every one of my responses.

I'm sorry that you feel you are somehow being "trolled" by someone who is simply asking for clarification of a statement that is not clear.  Frequently, questions or statements posted here are not clear and require clarification.  If you follow the discussions here with any frequency, you will see that that is a common occurrence.

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Quote

 I'm done with posting on this site...admin can delete my profile if they so choose. 

There is no reason for any account to be removed.  Seeking clarification is not trolling.

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Gtar, I’m sorry that Retread has been a bit blunt, here. I know that I can be, too.

I didn’t understand your point, either. Especially when you referred to cost reimbursement contracts.  That's why I was seeking clarification, too. 

H2H did address your concern to an extent. IF DCAA is available, they MIGHT be of some assistance on a CR contract. 

However, other than the embedded DCAA auditors with the Corps of Engineers in Saudi Arabia, I’ve never been very assured that they are available or thorough enough to do much other than sample claimed or proposed costs, unless specifically directed by me to look at something. We  were primarily requesting DCAA on FFP contract actions for military and Civil Works projects.

We had to fund any Civil Works DCAA support.  They were never available for us in my experience on CW projects, when we would request their assistance on a funded basis. 

Years ago we had USACE auditors for civil works, who ran circles around DCAA. 

 

 

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