Nicholasville commissioners weigh comp time for nonexempt staff, staff recommends 5-day PTO alternative

Nicholasville City commissioners on Jan. 13 spent an extended portion of their meeting discussing whether nonexempt city employees should be allowed to take comp time in lieu of overtime pay, and whether an alternative — an annual, use‑it‑or‑lose five‑day paid time off (PTO) allotment — would better serve employees and the city.

Commissioner Patty Teeter introduced the item, saying she had been approached by employees with childcare and travel needs who preferred time off to overtime pay. “I think there’s probably lots of employees...that would rather be able to take the time off than actually get paid for it,” Teeter said.

Kathy Walker, city clerk/human resources lead for the meeting, outlined legal and administrative constraints. She said Kentucky law allows nonexempt employees to convert overtime to comp time by mutual agreement but that there are strict rules: the employee must request comp time voluntarily before working the overtime, the agreement should be limited (KLC recommends three‑month agreements) and the city would be required to track comp‑time balances as a payable liability because comp time must be paid out when the employee leaves employment. Walker also noted technical limits in the city’s timekeeping system; accurate implementation would require manual verification of workweeks and pay periods, splitting hours when employees cross defined maximums, and special handling of holiday on‑call overtime that does not count toward overtime for accrual purposes.

“Once the employee hits that max in the middle of a work week, whatever they have over that max, they get paid out versus it going to comp,” Walker said, describing the extra payroll work that comp time administration would add.

Walker presented an alternative already used in some other cities: an annual 40‑hour (five‑day) PTO grant, use‑it‑or‑lose by Dec. 31, which would not create a long‑term payout liability like comp time. Under that option, the city’s payroll/time system could handle tracking with fewer manual adjustments.

Commissioners and department leaders discussed operational effects. Chief Fleming and other department heads said scheduling and on‑call coverage (particularly for police and fire) would need careful handling; new scheduling software used by some departments may help manage roll calls and call‑ups. Commissioners expressed interest in a city‑wide benefit that helps workers without imposing undue administrative burden on HR and payroll. Several commissioners signaled support for the PTO approach as a practical compromise; Commissioner Bethany Brown said it would be “a great idea” to provide a benefit citywide for employees who do not receive overtime.

The commission did not adopt a policy at the meeting. Staff were asked to gather more information, including consultation with the Hannah Resource Group and follow‑up with department superintendents about scheduling impacts, payroll liabilities and possible caps on sick time. Kathy Walker offered to prepare draft language and said she could read a municipal order at the next meeting and make it effective at the beginning of a pay period if commissioners direct her to do so.

Why it matters: The choice between comp time and PTO affects city operational payroll costs, accounting liabilities (comp time carried on the books), collective fairness across departments with differing overtime exposure, and recruitment/retention of employees with family responsibilities.

Next steps: HR will return with implementation options, estimated payroll/accounting impacts, and recommended parameters (agreement length, max accrual, start and end aligned to pay periods). Commissioners asked staff to consult the Hannah Resource Group and report back before any municipal order is adopted.