#07 - Payroll and Compensation Policy Update

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PAYROLL & COMPENSATION If an employee believes that an improper deduction or overpayment, or another type of error, has been made, they should immediately contact their supervisor. If the city determines it has made an improper deduction from a paycheck, it will reimburse the employee for the improper amount deducted and take good faith measures to prevent improper deductions from being made in the future. In cases of improper overpayments, employees are required to promptly repay the city in the amount of the overpayment. The employee can write a personal check or authorize a reduction in pay to cover the repayment. The city will not reduce an employee’s pay without written authorization by the employee. Once the overpayment has been recovered in full, the employee’s year to date earnings and taxes will be adjusted (so that the year’s Form W-2 is correct) and the paying department will receive the corresponding credit. When an overpayment occurs, the repayment must be made within the same tax year. In the exceptional situation where the overpayment occurs in one tax year and is not discovered until the next year, the overpayment must be repaid in the year it is discovered, but there will be additional steps and paperwork required. Any overpayments not repaid in full within the calendar year of the overpayment are considered “prior year overpayments” and the employee must repay not only for the net amount of the overpayment, but also the federal and state taxes the city has paid on their behalf. The city is able to recover the overpaid Social Security and Medicare taxes. Accordingly, the city will not require the employee to repay those taxes provided the employee provides a written statement that he/she will not request a refund of the taxes. The overpayment amount will remain taxable in the year of the overpayment since the employee had access to the funds. The employee is not entitled to file an amended tax return for the year but may be entitled to a deduction or credit with respect to the repayment in the year of repayment. Employees should contact their tax advisors for additional information. TIME REPORTING Full-time, non-exempt employees are expected to work the number of hours per week as established for their position. They will be paid according to the time reported on their time sheets. To comply with the provisions of the federal and state Fair Labor Standards Act, hours worked, and any leave time used by non-exempt employees are to be recorded daily and submitted to payroll on a bi-weekly basis. This is done electronically through the City’s payroll software. Time sheets should be entered and approved by the employee and approved by the employee’s immediate supervisor. Approving and submitting electronic time sheets acts as a signature. Reporting false information on a time sheet may be cause for immediate termination. OVERTIME / COMPENSATORY TIME The City of Lake Elmo has established this overtime policy to comply with applicable state and federal laws governing accrual and use of overtime. The city administrator (with input from the administrative services director) will determine whether each employee is designated as “exempt” or “non-exempt” from earning overtime. In general, employees in executive and professional job classes are exempt; all others are non-exempt. Non-Exempt (Overtime-Eligible) Employees For most employees the workweek begins at 12:001 a.m. on Saturday and runs until the following Friday night at 11:59 pmmidnight. Supervisors may establish a different workweek based on the needs of the department, subject to the approval of the city administrator. The employee’s supervisor must approve overtime hours in advance. An employee who works overtime without prior approval may be subject to disciplinary action. Overtime-eligible employees will be compensated at the rate of one time-and-one-half (1.5) times their hourly pay rate for all hours worked over 40 in one workweek. Paid holidays do count toward “hours worked.” Career firefighters will be compensated at the rate of onetime-and-one-half (1.5) times their hourly pay rate for all hours worked over 159 in the designated 21-day cycle. Firefighter Holiday Leave hours do not count towards “hours worked.” For any overtime hours worked on a City holiday Career Firefighters shall be paid two (2) times their hourly pay rate.