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CONSENT ITEM - 8D <br />,!r, <br />-`iIVEN HILLS <br />MEMORANDUM <br />DATE: July 28, 2025 <br />TO: Honorable Mayor and City Councilmembers <br />FROM: Jessica Jagoe, City Administrator <br />SUBJECT: Personnel Policy Amendment — Non -Exempt (Overtime Eligible) Employees <br />Budgeted Amount: Actual Amount: Funding Source: <br />N/A N/A N/A <br />Council Should Consider <br />Motions to approve, table, or deny the following: <br />• The proposed personnel policy amendment to Overtime/Compensatory Time for Non -Exempt <br />(Overtime Eligible) Employees. <br />Discussion <br />Earlier this year there was a request from a non-exempt employee for use of compensatory time. <br />During the review of this request, city staff consulted with the League of Minnesota Cities (LMC) on <br />our current personnel policy language on overtime compensation (i.e. cash payment or compensatory <br />time in lieu of cash payment) and accrual. A recommendation of LMC was to discuss with the City <br />Attorney the current language in the personnel policy for when the non-exempt employee elects how <br />to be compensated for overtime, carryover of banked compensatory time, and timing of automatic <br />payouts to ensure compliance with IRS regulations for annual reporting of wages. <br />The City Attorney reviewed and confirmed that modifications to the personnel policy would be <br />necessary. Three options were given to the Personnel Committee to consider. Two of the options <br />would have modified the personnel policy to require the employee to make an irrevocable election <br />"prior to" having worked any hours over 40 as payment or compensatory time in lieu of payment. <br />The third option allows the employee the flexibility to make an election "after" hours are worked on a <br />time -card by time -card basis for compensation. In all three options, the City would also need to <br />amend this same section of the personnel policy to address the timing of when any unused <br />compensatory time would be automatically paid. <br />Based on this information, the Personnel Committee has made a recommendation to proceed with <br />Option Three since that allows the employee to continue in the same manner as they are doing so <br />today with the flexibility to go between electing payment of overtime hours or accrual of <br />Page 1 of 2 <br />