| Effective Date: 07/01/05 |
Supplements to Regular Wages
It is the policy of the State of North Carolina that certain types of pay will be utilized by the payroll system which differentiates between appointment type and years of service. Certain employees receive supplements to regular wages. These supplements are processed as specified by the Central Payroll Division.
G.S. 126 State Personnel System G.S. 143B-426.39 Powers and Duties of the State Controller State Personnel Manual
Supplemental wages are paid to full-time and part-time permanent and temporary employees for compensation in excess of a standard work week, subject to the Fair Labor Standards Act (FLSA), and for completing qualifying long-term service as State employees. Categories of supplements to regular wages include:
Bonus pay results from legislative action. It is a one-time payment of a legislatively determined amount to eligible salaried employees. Bonus pay is programmatically added to the employees' pay as a salary split by the Central Payroll technical staff. It is taxed according to the employees' State and Federal tax exemption elections and, at the legislature's discretion, may be subject to withholding for retirement. Payroll staff are not required to key bonus payments into the Central Payroll System for eligible employees except in the following situations:
Bonus pay is recorded using the same chart of accounts as the employee's regular salary account.
The longevity benefit is designed to reward eligible employees that have provided at least ten years of service to the State of North Carolina. Longevity payments are processed annually for eligible employees and represent a percentage of an employee's annual salary as of the employee's anniversary date. The percentage of annual salary used to calculate longevity payments is based on years of service, as shown below:
Longevity pay is keyed as a separate payment code, but is programmatically merged into the monthly salary payment type as a payroll split. It is paid in the month of the employees anniversary date if the date allows for service credit in that month.Service credit is given for any month in which an employee is in pay status for one-half or more of the workday and holidays in the month. If the date does not allow service credit for the month, then longevity is paid in the subsequent month. Longevity pay and is taxed according to the exemptions claimed on the monthly salary payment. There are two sources of authorization for the payment of longevity:
Longevity pay is processed as a non-repeating payroll and is recorded using the following accounts:
Longevity payments are only processed on the monthly payroll cycle unless the eligible employee has been separated from the agency and the employee's last payment is not processed on the monthly payroll. Longevity processed separately from the employee's last monthly salary payment is considered to be supplemental pay and must be taxed using the flat withholding rates, see: http://www.ncosc.net/sigdocs/sig_docs/payroll/OSCPXA09_2005_Quick_Tax_Calculation_Sheet.pdfLongevity pay is included in determining an employee's regular hourly rate of pay for the purpose of calculating overtime payments.
The weighted premium payroll provides for the payment of shift differentials in eligible employment fields and compensation for time worked in excess of a salaried employee's normal schedule. Only employees normally paid on the monthly payroll cycle can receive this type of payment. Overtime worked is recorded and compensated in units of one-tenth of an hour. Categories eligible for reimbursement include the following:
All premium pay is processed on a non-repeating payroll and is paid on the monthly payroll cycle. It is taxed according to the exemptions an employee claims for the regular monthly payroll. Premium pay adjusts an employee's rate of pay based on a weighted average and is automatically adjusted for any longevity percentage that is applicable. Multi-Pay Shift Differentials Additional compensation is provided to certain employees that are regularly scheduled to work on either an evening or night shift, or on a weekend shift. Shifts are defined within the individual agency based on operating requirements and work environment. Each agency that pays according to work shifts should adopt a policy that defines the appropriate hours for shift premium pay. Shift premium pay is available to all eligible full-time and part-time (half-time or more) permanent, probationary, trainee or time-limited employees. The OSP, in conjunction with the individual agency, determines the classes of employees that are eligible for shift premium pay and the appropriate rates of payment for each class. The Central Payroll System provides for the payment of multi-shift pay differentials. These pay differentials range from 5% to 30%, based on a 5% difference between each shift category. Shift premium pay is recorded using the following accounts:
Shift premium pay is included in determining an employee's regular hourly rate of pay for the purpose of calculating overtime payments. Overtime Overtime is paid to eligible employees for hours worked in excess of 40 hours within a week, with the exception of those employees that are considered to be exempt. The exempt or non-exempt status of any particular employee is determined on the basis of whether duties, responsibilities and salary meet the requirements for exemption. It is the responsibility of the agency head to determine whether the exemption is applicable to particular employees. A workweek consists of 168 consecutive hours in the form of seven consecutive 24-hour periods. Each agency must adopt a policy that defines when the workweek begins and ends. It is not necessary that it coincide with the calendar week and may begin any day of the week and any hour of the day, but once defined must be applied consistently. Paid vacations, holidays, and sick leave are not considered to be time worked for determining entitlement to overtime, except when a designated holiday falls on an employee's day off. In this case, the holiday is paid as additional straight time and is not counted toward overtime hours. Overtime is recorded and compensated in units of one-tenth of an hour. The rate that is used in computing overtime is referred to as the regular hourly rate. The regular hourly rate includes the following:
This payroll is a non-repeating payroll that is paid at a rate of 1-1/2 times the employee's hourly rate and should be recorded against the following accounts:
For information on overtime that is not paid, but rather is accumulated as compensatory time earned, refer to the heading "Compensatory Time" in this section of the policy manual. Additional Straight Time Additional straight time is paid when an eligible employee meets the following conditions:
An example of additional straight time pay would be an employee that works 35 hours in a week that includes a holiday. The employee is paid for the three additional hours worked at the straight time rate of pay. The rules for eligibility are the same as for overtime, as stated above. This is a non-repeating payroll that is paid at the employee's regular hourly rate. Additional straight time should be coded to the following accounts:
Holiday Premium Pay Employees who are required to work on designated state holidays are given, in addition to regular salary, premium pay equal to one-half of their regular straight-time hourly rate for hours worked on state holidays. Instead of calculating 1/2 the employee's hourly rate, the total number of hours worked is entered into the Central Payroll System which automatically divides the hours entered as time worked by two before computing the amount of holiday pay. If an agency or unit has regularly established work shifts that change at a time other than midnight, the time of shift change closest to midnight will set the hour limits of the day for the purpose of computing holiday premium pay. Holiday premium pay is paid in addition to any overtime pay due. Holiday premium pay is recorded using the following accounts:
Premium pay for holiday work is not included in determining an employee's regular hourly rate of pay for the purpose of calculating overtime payments. On-Call Pay Additional compensation is paid to designated employees, regardless of appointment type, who are required to serve in "on-call" status. On-call compensation may be in the form of pay or compensatory time. The rate of each is determined by the Office of State Personnel based on survey data of prevailing practices in the applicable labor market. The current rate of $0.94 applies when calculating on-call pay unless an agency elects to change the rate based on the following:
If compensatory time is used, it may be accumulated up to a maximum of 240 hours and must be taken within twelve months from the date earned. If compensatory time off is not given by the end of the twelve-month period, it must be paid in the employee's next regular paycheck. Refer to the heading "Compensatory Time" in this section for more information. On-call pay is recorded using the following accounts:
On-call compensation is included in determining an employee's regular hourly rate of pay for the purpose of calculating overtime payments. Extended Duty Extended duty pay is applied to FLSA exempt employees in medically related areas that work on evening and weekend shifts to meet workload requirements. Extended duty is paid on a straight-time basis at the employee's regular rate of pay, or at a lower or higher rate as determined by the nature of the duties to be performed. The number of extended duty hours allowed is limited to 20 hours per week. A list of professional medical-related classes eligible to receive straight-time for extended duty beyond forty hours per week must be approved and maintained within the Office of State Personnel. Extended duty is recorded under the following account:
Emergency Call Back Emergency call back is paid to eligible employees when they are called back to work after their normal work schedule. It is keyed as straight time into the Central Payroll System. Emergency call back pay is recorded to the following accounts:
Emergency call back pay is included in determining an employee's regular hourly rate of pay for the purpose of calculating overtime payments. Compensatory Time Compensatory time may be used for overtime or on-call compensation. Only employees that are non-exempt from the state’s provisions for overtime pay are eligible to receive payment for compensatory time. Compensatory Leave for Exempt Employees No employee whose position is designated as exempt from overtime compensation provisions is paid in any way for hours worked in excess of forty in a workweek unless a specific exception has been approved by the State Personnel Office. Exempt employees, however, may be granted straight time compensatory leave, Compensatory leave is not cumulative beyond a twelve-month period and may not be transferred to any other type of leave. Compensatory leave cannot be transferred to another agency and is lost when an employee is separated from state service. Compensatory Time A non-exempt employee that does not receive overtime pay for hours worked beyond a standard 40-hour workweek is eligible for compensatory time off on the basis of one and one-half times the amount of time worked beyond 40 hours during a week. Compensatory time may be accumulated up to a maximum of 240 hours (160 hours straight time). Any overtime worked above this amount must be paid in the employee's next regular paycheck. Compensatory time must be taken within twelve months from the date the overtime is performed and is taken before any vacation leave. If compensatory time off is not given by the end of the twelve-month period, the overtime pay shall be included in the employee's next regular paycheck. Individual agencies may adopt stricter guidelines for payment of compensatory time. Upon transfer to another agency or termination of employment, a non-exempt employee is paid for unused compensatory time earned at a rate of compensation not less than either the average regular rate received by the employee during the last three years of the employee's employment or the final regular rate received by the employee, whichever is higher. Compensatory time pay is keyed into the Central Payroll System as Overtime pay and uses the same chart of accounts.
This policy applies to all State entities using the Central Payroll System.
An exception exists to the regular holiday pay rate for the Department of Corrections. Questions regarding this exception should be directed to Central Payroll Division.
There are no special terms for this policy.
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