Case Title: Johnson v. Ohio Dept. of Youth Serv.

Citation: 2002-Ohio-4010

Docket Number: 20010339

State: ohio

Court: Ohio Supreme Court

Date: 2002-08-21T00:00:00Z

Document:
[Cite as Johnson v. Ohio Dept. of Youth Serv., 96 Ohio St.3d 161, 2002-Ohio-4010.] 
 
 
JOHNSON, APPELLEE, v. OHIO DEPARTMENT OF YOUTH SERVICES, APPELLANT. 
[Cite as Johnson v. Ohio Dept. of Youth Serv., 96 Ohio St.3d 161, 2002-Ohio-
4010.] 
Employer and employee — Public employment — System of awarding 
compensatory time for extra hours worked and deducting compensatory 
time for hours absent does not destroy an employee’s salaried exempt 
status, when. 
(No. 2001-0339 — Submitted March 26, 2002 — Decided August 21, 2002.) 
Appeal from the Court of Appeals for Franklin County, No. 00AP-677. 
__________________ 
SYLLABUS OF THE COURT 
A system of awarding compensatory time for extra hours worked and deducting 
compensatory time for hours absent does not destroy an employee’s 
salaried, exempt status when the employee’s salary is not reduced because 
of variations in the quality or quantity of the work performed. 
__________________ 
PFEIFER, J. 
{¶1} 
Erma Johnson filed suit in the Court of Claims of Ohio on 
September 14, 1998, claiming that DYS’s system of compensatory (“comp”) time 
rendered her a nonsalaried, nonexempt employee.  For the reasons that follow, we 
conclude that the comp-time system did not affect her salaried status.  
Accordingly, we reverse the judgment of the court of appeals. 
{¶2} 
Erma Johnson worked for the Ohio Department of Youth Services 
(“DYS”) as a regional administrator and managing officer.  DYS requires regional 
administrators such as Johnson to work 40 hours per week.  Johnson’s work week 
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was composed of five nine-hour days, each of which included a one-hour lunch 
break.  DYS required Johnson to be at work during the department’s core hours of 
8:30 a.m. to 4:30 p.m. 
{¶3} 
DYS’s comp-time system allows salaried, exempt employees to 
accrue hour-for-hour comp time for hours worked in excess of 40 per week, with a 
supervisor’s approval.  Supervisors typically approve comp time when the 
additional hours worked are “necessary for operation of the division or work 
unit.”  When a salaried exempt employee is tardy or absent during core hours, 
DYS requires the employee to account for the hours missed by using accrued 
leave time such as vacation time, sick leave, or comp time.  The employee is 
allowed to choose which type of leave to use, subject to a supervisor’s approval.  
At times, when Johnson did not indicate a choice, a supervisor accounted for the 
missed time from the comp-time balance. 
{¶4} 
Johnson normally started work at 8:30 a.m. and occasionally 
worked as late as 9:00 or 10:00 p.m.  Her supervisor frequently approved accrual 
of comp time for her extra hours.  On a number of occasions in 1997 and 1998, 
Johnson arrived after core hours had started or left before they had ended.  To 
account for some of these absences, Johnson used sick leave and vacation time.  
For others, she indicated that the absent hours were “flex time.”  In those 
instances, Johnson’s supervisor accounted for the absent hours by deducting from 
her comp time, which always had a positive balance.  Johnson’s cash salary was 
never reduced because she always had sufficient vacation time, sick leave, or 
comp time available to compensate for work hours missed. 
{¶5} 
Johnson filed suit, claiming that DYS’s comp-time system 
rendered her a nonsalaried, nonexempt employee.  She alleged that she should be 
paid overtime for the hours in excess of 40 per week that she had worked.  The 
January Term, 2002 
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Court of Claims held that Johnson had been a salaried, overtime-exempt employee 
and therefore was not entitled to overtime pay. 
{¶6} 
Johnson appealed.  The court of appeals reversed, determining that 
an employer may account for missed time by deducting from an employee’s 
personal or sick leave, but not from an employee’s comp time.  The court held that 
deduction of comp time violates the salary test of the Fair Labor Standards Act 
(“FLSA”), which prohibits the reduction of an overtime-exempt employee’s salary 
according to hours worked.  The cause is now before this court pursuant to the 
allowance of a discretionary appeal. 
{¶7} 
Pursuant to FLSA, employers must generally pay overtime 
compensation for work performed in excess of 40 hours per week.  Section 
207(a)(1), Title 29, U.S.Code.  However, any salaried “employee employed in a 
bona fide executive, administrative, or professional capacity” is exempt from that 
requirement.  Section 213(a)(1), Title 29, U.S.Code.  It is undisputed that 
Johnson’s duties at DYS qualify her for exempt status under either the executive 
or administrative criteria. 
{¶8} 
At issue is whether Johnson was a salaried employee.  Section 
541.1(f), Title 29, C.F.R.  Pursuant to the salary test, an employee is paid “on a 
salary basis” if “he regularly receives each pay period on a weekly, or less 
frequent basis, a predetermined amount constituting all or part of his 
compensation, which amount is not subject to reduction because of variations in 
the quality or quantity of the work performed.”  Section 541.118(a), Title 29, 
C.F.R.  “[A]dditional compensation besides the salary is not inconsistent with the 
salary basis of payment.”  Section 541.118(b), Title 29, C.F.R. 
{¶9} 
It is not disputed that in every biweekly pay period during 
Johnson’s employment with DYS, she received her full salary without reduction 
SUPREME COURT OF OHIO 
 
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because of “the quality or quantity of the work performed.”  Accordingly, we 
conclude that Johnson was paid a salary. 
{¶10} The next question is whether DYS’s comp-time system destroyed 
Johnson’s salary status.  The test is whether the accrual or deduction of comp time 
subjected her salary “to reduction because of variations in the quality or quantity 
of the work performed.”  Section 541.118(a), Title 29, C.F.R.  We conclude that 
the accrual of comp time did not destroy Johnson’s salary status. 
{¶11} “Additional compensation” will destroy an employee’s salaried, 
exempt status only where it divides the actual salary into multiple “parts for the 
purpose of circumventing the requirement of payment ‘on a salary basis.’ ”  
Section 541.118(b), Title 29, C.F.R.  DYS’s system for accruing comp time was 
not intended to, and does not, circumvent the salary test; rather it was intended to 
ensure that an exempt employee’s salary remained constant.  Although the comp-
time system did not result in additional compensation for Johnson, it served to 
compensate her, when her actual time worked was less than the required amount 
for any particular period.  Accordingly, it could be viewed as additional 
compensation.  Recognizing that comp time is the equivalent of compensation 
does not also mean that it is salary.  We conclude that comp time accrued pursuant 
to DYS’s comp-time system is nonsalary compensation.  See Kuchinskas v. 
Broward Cty. (S.D.Fla.1993), 840 F.Supp. 1548, 1555 (“compensatory time may 
be part of an employee’s compensation package, [but] it does not constitute 
salary”).  Therefore, any reduction in Johnson’s comp time for hours absent from 
work during core hours will not destroy her salaried status because her salary was 
not reduced.  Section 541.118(a), Title 29, C.F.R.  See Internatl. Assn. of Fire 
Fighters, Alexandria Local 2141 v. Alexandria (E.D.Va.1989), 720 F.Supp. 1230, 
1232 (“docking of leave or accrued compensatory time for absences of less than 
an entire day” does not “defeat salaried status”). 
January Term, 2002 
5 
{¶12} This conclusion is supported by further analysis of the salary test, 
which states that salary is “a predetermined amount * * * [and] is not subject to 
reduction because of variations in the quality or quantity of the work performed.”  
Section 541.118(a), Title 29, C.F.R.  Comp time is not “predetermined.”  It is 
granted in special circumstances to compensate employees for work beyond 
DYS’s expectations.  Comp time is granted only when extra hours are worked and 
the extent of comp time cannot be determined prior to the hours for which it is 
accrued.  It also cannot be exchanged for cash.  Further, the term “amount” 
suggests that comp time is not salary because “amount” is generally construed to 
mean a “cash” amount.  Barner v. Novato (C.A.9, 1994), 17 F.3d 1256, 1261-
1262. 
{¶13} We hold that a system of awarding comp time for extra hours 
worked and deducting comp time for hours absent does not destroy an employee’s 
salaried, exempt status when the employee’s salary is not reduced because of 
variations in the quality or quantity of the work performed. 
{¶14} Our holding is supported by the Department of Labor’s position on 
the salary test.  Considering a proposed benefits plan that included a comp-time 
system substantially similar to that of DYS, the Department of Labor stated, 
“Where an employer has a bona fide benefits plan (e.g., vacation time, sick leave, 
comp time), it is permissible to substitute or reduce the accrued leave in the plan 
for the time an employee is absent from work even if it is less than a full day 
without affecting the salary basis of payment, if by substituting or reducing such 
leave the employee receives in payment an amount equal to his or her guaranteed 
salary.  Payment of an amount equal to the employee’s guaranteed salary must be 
made even if an employee has no accrued benefits in the leave plan and the 
account has a negative balance, where the employee’s absence is for less than a 
full day.”  Department of Labor Opinion Letter 2199 (Oct. 19, 1999).  Though this 
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analysis is not controlling, it supports our conclusion that the accrual of and 
deduction from Johnson’s comp time did not destroy her salaried status. 
{¶15} Because the comp-time system does not destroy Johnson’s salaried, 
exempt status, her claim for overtime pay was properly denied by the Court of 
Claims.  Accordingly, we reverse the judgment of the court of appeals. 
Judgment reversed. 
 
MOYER, C.J., DOUGLAS, RESNICK, F.E. SWEENEY, COOK and LUNDBERG 
STRATTON, JJ., concur. 
__________________ 
 
Wagoner & Steinberg, Ltd., C. William Bair and Thomas G. Overley, for 
appellee. 
 
Betty D. Montgomery, Attorney General, Stephen P. Carney, Associate 
Solicitor, Richard N. Coglianese, Michael R. Gladman and Robert L. Strayer, 
Assistant Solicitors, Peggy W. Corn and Robert L. Griffin, Assistant Attorneys 
General, for appellant. 
 
Fay D. Dupuis, City Solicitor, and Roshani D. Hardin, Assistant City 
Solicitor, urging reversal for amicus curiae city of Cincinnati. 
 
Barbara E. Herring, Law Director, and James G. Burkhardt, urging 
reversal for amicus curiae city of Toledo. 
__________________