I am managing a Cooperative Agreement issued from USAID. The award doesn't stipulate any restrictions regarding overtime payment. I was wondering whether we can pay overtime. Overtime will be considered anything above 40 hours of work per week.

I know that cooperative agreements are governed by 22 CFR 226, 22 CFR 228 and cost rules . We are also a Commercial entitiy so hence we should use our own cost principles and policies under a Cooperative Agreement as same as FAR part 31, that said all of these regulations are silent regarding payment of overtime.

I would really appriciate you guidance/thoughts on this subject!

rose2010,

Interesting question because my attorneys tell me that exempt employees CANNOT work "overtime" under FLSA. At most, they can work "extended work hours" and only non-exempt and hourly employee can work "overtime". In fact, non-exempts and hourly employees MUST be paid for ALL hours worked.

Since we know that non-exempt and hourly employees must be paid for all hours worked, your real question must be "can I pay my exempt, salaries, employees for all hours worked" -- right?

How did you estimate labor costs under the Agreement?

More importantly, what do your compensation policies say?

Hope this helps.

here_2_help,

In looking at the DOL site for the Fair Labor Standards Act, I couldn't find where exempt employees "CANNOT work 'overtime' under FLSA". It appears that they are exempt from the mandatory overtime provisions of FLSA. But why can't a company pay overtime or pay for extra hours worked to those employees who are exempt from the FLSA overtime rules?

EDIT: Army civilian employees who are rehired annuitants are "exempt employees". I assume that means that they are exempt from at least the overtime provisions and holiday pay provisions (if any) of FLSA. However, the Army pays rehired annuitants only for actual hours worked up to the statutory limits for civilian employee compensation per pay period/per year/etc. We were told to enter all time beyond 8 hours per day and all time beyond 40 hours per week as "overtime" on our time sheets. Our pay receipt will show the number of both "regular" and "overtime" hours, which are paid at the equivalent hourly rate (I think it is equivalent full-time salary divided by 2080 hours per year). It's weird when regular hours may be less than 40 but there will be overtime for any day longer than 8 hours worked.

joel,

My point was that when salaried exempt employees get reimbursed for working additional hours, my attorneys (who are labor attorneys) tell me it's not called "overtime". It's called something else, but not overtime.

H2H

Beyond the debate on whether you should be paying/calling extra hours overtime I have a couple of thoughts regarding your questions.

First and foremost I would suggest reaching out to the appropriate Agency representative that is administering the Cooperative Agreement (CA) with regard to the specifics of your question as the agency in fact has the final say as to your direct costs that you will want to claim under the CA related to personnel compensation.

As to the word "overtime" specifically you may find this website handy to determine exactly where, within the "Super" OMB Circular that overtime is addressed as a personnel compensation matter. To do so go to the Text Comparison on Cost Principles, pull up this cross walk up and then do a search on the word "overtime".

Policy regarding the "Super" OMB Circular - http://www.whitehouse.gov/omb/grants_docs

The cost comparison cross walk - http://www.whitehouse.gov/sites/default/files/omb/fedreg/2013/uniform-guidance-cost-principles-requirements-text-comparison.pdf

PS - Agencies, in fact have until Dec, 2014 to implement the new guidance and in many cases may be running to get fully up to speed on the Super Circular. You may need some patience in reaching out to the agency CA administrator when attempting to get your specific questions answered.