Financial Planning and Budgets Section (FPB)
Effective Date: 12/01/2003
Last Modified Date: 01/05/2004
Links Updated: 08/25/2004
The term "dual employment" refers to the situation wherein a specifically identified State employee performs services for a State agency, other than his or her parent agency, with the specific approval of the borrowing and the parent agencies.
On January 1, 1976, the State Budget Officer and the State Personnel Director issued a joint directive specifying a revised Uniform Dual Employment Policy to be followed by all State agencies. This policy statement authorizes State agencies to secure the services of an employee of another State agency on a "part-time, consulting or contractual basis" by entering into a dual employment agreement.
The Dual Employment Policy applies to all full-time, permanent State employees, both EPA and SPA, and to all State agencies.
For SPA employees, see also Wage-Hour Policies.
Any compensation to the employee must be paid by the parent agency through reimbursement from the borrowing agency. The borrowing agency is not authorized to make direct payment to full-time permanent employees of another State agency.
Dual employment should be used for emergency and one-time service requirements and not for continuing arrangements, except where valid joint appointments are involved. Dual employment should be used to authorize employees with special skills and abilities to participate in a loan arrangement between the parent and borrowing agencies in such a manner as to strike a sound balance among the interests of the State, the agencies, the employee, and the public.
Approval of dual employment agreements should be granted-or withheld-after carefully considering such factors as the nature of the services to be performed, the effect on the morale of other State employees, ethical considerations, the impact of the temporary loss of the services of the individual to the parent agency, the possible reduced efficiency of the individual as a result of fatigue or inattention to primary responsibilities, the urgency of the situation, possible alternative arrangements, and other pertinent factors.
Exemptions from Dual Employment Regulations
The following are not considered State agencies, and their employees are exempt from the policy:
- the Public School system
- the Community College system
- Employees of cities and counties
Alternatives to Dual Employment
Compliance with the requirements of the Uniform Dual Employment Policy is complex, and every reasonable effort should be made to avoid dual employment arrangements. The following alternatives are suggested:
- Assigning the required activity on a continuing basis to the agency providing the service, so that the employee performing this service can work entirely for one agency
- Contracting for services, when the contract can be adequately defined without reference to the specific employees
If one of these alternatives seems appropriate, please contact the UNC-Chapel Hill Budget Officer for further information.
Uniform Dual Employment Definitions
The State agency having control over the services of the employee and from which the employee receives his regular paycheck.
The State agency seeking the services of an employee of another State agency.
Permanent Full-Time Employees
Normally, an employee with a 40-hour workweek schedule is a permanent full-time employee. This includes employees on rotating shifts and those with split shifts.
An employee who, though considered to be the incumbent in a full-time permanent budgeted position, may be required to be in on-duty status (normally at a fixed work station) for only a limited number of hours per week.
Example: a teacher in an institution of higher education, who for one semester might be scheduled to teach classes for fifteen hours a week, and for the next semester teaches only nine hours but has the added duty of advising students. The hours during which the employee advises might be fixed, or the employee might have the option of scheduling the appointment himself. Variable-time employees are considered to be on their own time except at those hours when they are required to be in scheduled on-duty status.
Instructional Contractual Services
The employment by one higher education institution of an instructional employee under contract to another institution, as the exchange of teachers between two proximate institutions such as UNC-Chapel Hill and N.C. Central University. This would include a joint full-time appointment agreement between a parent agency and a borrowing agency where the time of the employee will be split between the agencies.
Honoraria (EPA Employees)
Notwithstanding any definitions previously given or henceforth to be given to the word "honorarium," any payment by one State agency to a full-time employee of another State agency for any type of service is subject to the procedures of the Uniform Dual Employment Policy.
Special Rules Governing Dual Employment
Joint appointments are considered dual employment arrangements, with the initial hiring agency being the parent agency and the subsequent hiring unit being the borrowing agency.
Nine-Month Appointments (EPA Employees)
An employee under contract to an educational institution for an academic year (normally 9 months) is ordinarily considered a "free agent" during the summer, notwithstanding that such employee may be paid on a twelve-month basis. An employee is not subject to the Dual Employment Policy while a free agent. A nine-month employee is not a free agent and not exempt if he receives additional salary from his parent institution for summer employment.
Temporary and Part-Time Employees Excluded
Any temporary or permanent part-time employee of a State agency may also be a temporary or permanent part-time employee of another State agency and still be excluded from dual employment procedures. To be excluded, the work for two or more State agencies must not normally add up to be a full-time (40 hours) standard workweek. However, each agency employing such an employee is responsible for seeing that the employee is not allowed to work, without appropriate overtime pay, more than forty hours in a standard workweek for all State agencies.
Student Employees Excluded
A student employed on a part-time basis by the institution at which s/he is enrolled and regularly attending classes is classified as a student employee and is not covered by the Dual Employment Policy. S/he is considered by all other State agencies to be a temporary employee. However, each State agency employing a student employee, as well as any other employee covered by the State Wage-Hour Policy, is responsible for seeing that the employee is appropriately compensated for any hours worked over a combined 40-hour workweek.
Retroactive Payment Prohibited
If payment is to be made for services, the rate must be agreed upon in advance in writing and may not be increased merely because additional funds become available. Neither are retroactive payments permissible to persons who have already performed services without compensation just because funds become available.
If the work (including preparation) is performed for a borrowing agency outside the employee's regular work schedule, the employee may receive additional pay. Employees subject to the State Wage-Hour Policy must be compensated for the combined number of hours worked during a workweek at both the parent and the borrowing agency. Such compensation must include overtime payments of time and one-half the employee's regular pay rate for any hours worked in excess of 40 in one workweek.
Exceptions to Additional Pay
It is assumed that certain officials will make outside appearances and speeches, which are in fact a part of their normal duties, and such officials should not expect to be paid for these occasions.
No employee while on paid leave may be paid additionally for services performed for the employee's parent agency.
If the work is performed during the employee's regular work schedule and the employee is not on leave, the employee may not under any circumstances receive additional pay.
Commuting expenses to the borrowing agency are not reimbursable to the employee or to the parent agency.
Written Approval by Both Agencies
An officer acting for the administrative head of the parent agency, and in like manner for the borrowing agency, must signify approval in writing in each instance of an employee performing services for pay for another State agency.
Designated Approving Officers
At Carolina, the provost or appropriate vice chancellor approves EPA employees and EPA-type services.
For the dual employment of SPA employees, prior approval is required from the Director of Workforce Planning and Recruitment. (See Wage-Hour Polcies on the HR Web site when a University employee is involved.)
Institutional approval for dual employment involving the provost, a vice chancellor, or the Director of Workforce Planning and Recruitment will be made by the Chancellor.
If the Chancellor is to perform services for pay for another State agency, s/he will first obtain the approval of the President of the University system.
Borrowing Agency Responsibilities
Payment for Services Charged to "Employee on Loan Payments"
All payments for services of borrowed employees must be made to the parent agency and charged under the Employee on Loan Payments object. Such payments may not be charged to salaries and wages object codes, but the Office of State Budget will give favorable consideration to requests to transfer budgeted amounts from salaries and wages object lines to contractual services lines if needed. The same applies to transfer of funds budgeted for temporary wages.
Compensation to Parent Agency
The borrowing agency will compensate the parent agency (not the employee) for the following costs:
- Employee's gross pay
- Employer's share of FICA tax without consideration of employee's cumulative earnings to date
- Employer's share of retirement contribution under joint appointment (only for other than supplemental pay)
The borrowing agency will reimburse the employee directly for any travel and/or subsistence expense related to the performance of services for the borrowing agency. Such reimbursements are subject to State travel policies. Commuting expenses between the parent agency and the borrowing agency are not reimbursable.
Time records will be forwarded by the borrowing agency to the loaning agency when the employee being borrowed is covered by the State Wage-Hour Policy. To ensure compliance, time records will be required for all SPA employees and for those EPA employees subject to the overtime provisions of the State Wage-Hour Policy.
Parent Agency Responsibilities
The parent agency will be fully responsible for the employee's compensation. The employee will remain on the parent agency's payroll. All payments for services must be made by the borrowing agency directly to the parent agency of the employee borrowed, not to the employee, and must include appropriate employer's matching social security (and retirement contributions if a joint appointment). In all cases of supplemental payment to an employee, the parent agency must make the payment to the employee as an addition to his or her regular pay, and no retirement contributions will be made.
All administrative expenses will be borne by the parent agency, unless such amounts are significant and prior approval of other arrangements has been obtained from Financial Planning and Budgets.
Medical and Hospital Insurance
The parent agency will be responsible for covering 100% of the medical and hospital insurance contributions of the employer. These costs will not be reimbursed by the borrowing agency.
Time records will be required from the parent agency and from the borrowing agency when the employee on loan is covered by the State Wage-Hour Policy. To ensure compliance, time records will be required for all SPA employees and for those EPA employees subject to the overtime provisions of the State Wage-Hour Policy.
Return to Financial Planning and Budgets Section Contents
Return to Business Manual Table of Contents