Policy HR105 REDUCED FTE SCHEDULES

POLICY'S INITIAL DATE: July 1, 2017
THIS VERSION EFFECTIVE: July 1, 2017

Contents:

  • Purpose
  • Definitions
  • Full-time Equivalency
  • Reduced FTE Schedules
  • Setting Salary Rates
  • Payment Frequency
  • Benefits
  • Retirement Contributions
  • Educational Privileges
  • Vacation and Sick Leave
  • Holidays

  • PURPOSE:

    To outline expectations for full-time staff employees on a reduced FTE schedule.

    DEFINITIONS:

    Full-time Equivalency (FTE):

    The percentage of full-time (40 hours per work week) effort worked during the standard work week or over the course of a given appointment [for example, 75% full-time equivalency (FTE) equals 30 hours of work per work week, or 40 hours of work per week for 9 months of the year].

    Reduced FTE Schedules:

    The following options are available for employees working less than 100% FTE:

    Examples of 75% or greater FTE schedules include:

    1. A position scheduled for 40 hours per week, 10 months a year = 83.3% FTE
    2. A position scheduled for 30 hours per week, 12 months a year = 75% FTE
    3. A position scheduled for 40 hours per week, 9 months a year = 75% FTE

    Positions may be created which are scheduled to work reduced FTE schedules when University business needs dictate. Although the University encourages supervisors to consider all other flexible scheduling options, including use of available paid time off, prior to approving an incumbent employee’s request to work a reduced FTE schedule, supervisors may place an employee on a reduced FTE schedule if the incumbent employee voluntarily accepts a reduction in work schedule and salary.

    All arrangements require appropriate work unit approvals and in all cases supervisors are responsible to ensure that University business needs are efficiently and effectively met. The University may increase a reduced FTE schedule at its sole discretion. Supervisors should provide employees with as much notice as possible when increasing an employee’s FTE.

    All full-time employees on reduced FTE schedules must maintain a minimum of 75% FTE annually to remain in full-time status with the University.

    SETTING SALARY RATES:

    The salary of each full-time employee on a reduced FTE schedule is prorated based on the employee’s FTE.

    For example, if the 100% FTE salary is $30,000, then the annual 75% FTE salary would be: $30,000 x .75 = $22,500.

    PAYMENT FREQUENCY:

    Employees on a reduced FTE schedule are paid monthly, during months in which they work. Employees who are not scheduled to work twelve months will not receive pay during the months in which they do not work.

    BENEFITS:

    Employees on a reduced FTE schedule are eligible for all full-time benefits. Insurance rates are calculated on the same basis as all other full-time employees.

    Employees who work a reduced schedule year round will have deductions for insurance benefits elected taken from each paycheck monthly. Employees who work fewer than twelve (12) months per year will have deductions for elected benefits taken from each paycheck during months in which they work and earn enough to cover deductions. Employees will be billed at the employee rate for elected benefits during months in which their pay is not enough to cover the deduction or during months in which they receive no pay.

    If an employee chooses to discontinue medical coverage during months not worked, the employee and dependents must wait until the University's annual open enrollment to elect coverage to be effective the following benefit year. Employees hired prior to January 1, 2010 who elect not to participate in medical coverage during the months not worked, may adversely affect their ability to retire with health benefits as outlined in HR54 Continuation of Group Insurance After Age 60, Age 65, and After Retirement or Death.

    RETIREMENT CONTRIBUTIONS:

    Retirement contributions are made during months paid, but are not made during months not paid, except that members of TIAA may make private contributions at any time.

    For employees enrolled in the State Employee Retirement System (SERS), reduced annual FTE will be reported to SERS. Employees should contact the SERS office to find out how this impacts their retirement calculations.

    EDUCATIONAL PRIVILEGES:

    Employees on a reduced FTE schedule are eligible for educational grant-in-aid for themselves and their dependents as provided by policies HR36 and HR37 during the entire year regardless of schedule. Employees on months off schedules are eligible for educational grant-in-aid for themselves and their dependents during periods of no pay related to their schedule. Educational privilege eligibility during other periods of leave without pay are handled in accordance with the appropriate leave policies and practices.

    VACATION AND SICK LEAVE:

    Employees appointed to positions with reduced FTE schedule accrue vacation and sick leave on a monthly basis, however, monthly vacation and sick leave accruals and maximum balances outlined in HR34 Employment Conditions for Staff Employees will be prorated based on the employee’s annual FTE. Examples:

    1. Employee working 40 hours per week, ten months per year, September 1 through June 30 (83.3% annual FTE), earns 83.3% of accrual rates for vacation and sick leave during each of the twelve months (July through June).
    2. Employee working 40 hours per week, nine months per year, August 16 through May 15 (75% annual FTE), earns 75% of accrual rates for vacation and sick leave during each of the twelve months (July through June).
    3. Employee working 30 hours per week, twelve months per year earns vacation and sick leave based on 75% annual FTE during each of the twelve months (July through June).

    The maximum vacation accruals outlined in HR34 are prorated based on the employee’s annual FTE. Employees on a reduced FTE schedule who meet the eligibility requirements under HR34 for payoff for vacation accumulation at the time of separation will be paid out vacation accruals at the time of separation. Payments will not exceed the prorated maximum accrual amount.

    Employees who are retirement eligible are entitled to a payout of their sick accruals in accordance with HR34. Such payouts are prorated based on the employee’s annual FTE.

    HOLIDAYS:

    Employees on reduced FTE schedules receive benefits for holidays in accordance with HR34. Holiday time for employees on a reduced FTE schedule is prorated based on the employee’s annual FTE.

    If a holiday falls at a time when the employee is not scheduled to work, then the employee will earn holiday compensatory time. Employees must request holiday compensatory time for holidays which occur during their months off upon their return to work.

    If a holiday falls during a time when the employee is scheduled to work more hours than the prorated holiday benefit, then the employee will be required to charge accrued holiday compensatory time, personal holiday, or vacation time to supplement the holiday benefit. Holiday compensatory time should be scheduled in advance like vacation and used prior to vacation time.

    Example:

    An employee working 40 hours per week September through May, and not working in June, July and August (75% annual FTE) receives 6 hours of holiday time for all of the University holidays. Therefore, this employee accrues 6 hours of holiday compensatory time for the July 4th holiday; would use 2 hours of holiday compensatory, personal holiday, or vacation time per holiday to augment the holiday benefit time on the Labor Day, Thanksgiving, and December/January holidays; and the Memorial Day holiday.

    CROSS REFERENCES:

    HR05 - Appointments

    HR34 - Employment Conditions for Staff Employees

    HR36 - Educational Privileges for Faculty, Staff, and Retirees

    HR37 - Grant-in-Aid for Dependents of Faculty, Staff, and Retirees

    HR54 - Continuation of Group Insurance After Age 60, Age 65, and After Retirement or Death

    HR92 - Employment Conditions for Employees Classified as Administrator


    | top of this policy | GURU policy menu | GURU policy search | GURU home | GURU Tech Support | Privacy and Legal Statement | Penn State website |