Policies,Administrative,UWMF,UWMF-wide,Human Resources

Exempt Pay Policy (108.027)

Exempt Pay Policy (108.027) - Policies, Administrative, UWMF, UWMF-wide, Human Resources


Human Resources
Exempt Pay Policy

Effective Date: 06/09/2014
Supersedes Policy Date: 04/15/2009


The Exempt Pay Policy is designed to clarify the definition of an exempt employee,
permissible deductions from pay and reporting time.

EXEMPT: An exempt employee is “exempt” from the overtime requirements of the Fair
Labor Standards Act, which requires overtime payment for hours worked in excess of
40 per week. An exempt employee is compensated for the general value of the
services performed, not the amount of time spent on the job. These employees are
paid on a salaried basis; that is, paid a predetermined amount that is not subject to
reduction because of the quality or quantity of work. As a general rule, an exempt
employee should be compensated for an entire week in which work is performed.

Full Time Equivalency (FTE): For the purpose of standardization and consistency with
the Fair Labor Standards Act, one week of work for a full time employee is defined as
40 hours. An employee’s FTE is therefore determined by taking the weekly number of
hours that are required to perform the service (as defined by the Supervisor) divided by
40. For example an employee whose work is expected to take 32 hours to complete in
a week would be a 0.8 FTE (32/40). Exempt employees at any FTE, however, are
subject to variations in schedule that are necessary to accommodate business needs.
FTE and salary do not adjust for short term changes in work expectations.



Absences from work should be recorded in full or half day increments when using
salary time off (STO). Full or half day increments are based on the employee’s regular
work schedule. For example, if an employee with a 1.0 FTE works four, 10 hour days,
and takes a half day off, 5 hours of STO should be used. Absences of less than a half
day should not be recorded.

Pay reduction is only permissible for the below situations:

1. Absences in increments of full days and only for vacation, sickness or
accident, and for personal reasons if STO is unavailable.
2. If an employee is suspended for violating a written work rule.

3. Time can be recorded for less than a week during the initial hire week or the
final week of work.
4. If an employee meets the requirements and applies for Family and/or Medical
Leave (FMLA), reductions in pay or STO are permissible for absences in one
hour or less increments. The employee will receive reduced compensation
consistent with the hours actually worked, unless the employee has requested
STO or reserve time. Any accrued STO or reserve time the employee may
have at that time may be paid to the employee during the period of partial leave
otherwise unpaid leave will be recorded.

Again, the employee is compensated for the value of work, not the time spent
performing these functions. This does not mean that absenteeism and tardiness are
acceptable performance. Employees must still abide by the established procedures for
requesting time off and reporting unscheduled absences. Patterns that are disruptive to
the operations of the department should still be addressed with the supervisor.


A. Deductions for absences of less than one day are not allowed for jury duty,
testimony as a witness, or temporary military leave. However, the employee’s
pay will be offset by the amount received for these services. Please see Time
Off Policy for more information.

B. Likewise, deductions for lack of work during a week in which the employee was
available to perform work are not allowed. In such an event, University of
Wisconsin Medical Foundation (UWMF) will make every attempt to find suitable
work for the employee.


A. Exempt employees are not required to keep a record of hours worked. However,
the employee’s schedule should be kept on record through the Kronos time
keeping system (i.e. M-F 8am to 5pm).

B. Time off requests that are in increments of full or half day may be requested and
approved through the Kronos time keeping system. If employee’s have a work
schedule that is outside an 8 hour day, time off requests must be submitted and
recorded by Payroll.