Compensation, Pay Structure, and Salary Administration

Owner: Director of Finance & Operations (DFO) – with input from all Directors Audience: All OWL staff

Purpose

This document outlines OWL's compensation philosophy, pay structure, and salary administration practices. It includes principles of pay equity, benchmark ranges aligned with the education nonprofit sector, and transparent oversight protocols for all employee roles. The document also covers salary distribution, overtime, pay frequency, deductions, and related legal compliance. These policies support OWL's mission by ensuring compensation is fair, mission-aligned, and fiscally responsible—while reinforcing transparency, accountability, and equity across the organization.

OWL COMPENSATION STRUCTURE FOR EMPLOYEES

OWL strives to provide a fair, mission-aligned, and sustainable total compensation opportunity for all employees. Our approach reflects industry standards within the education nonprofit sector and supports our ability to attract and retain individuals whose expertise and values advance OWL's vision for learner-centered innovation. As such, OWL's compensation program is designed to:

• Reinforce OWL's core values by making OWL a great place to work—balancing purpose, autonomy, and mastery with strong support for work/life balance.

• Balance long-term sustainability with available financial resources, ensuring decisions uphold our commitment to fiscal responsibility and equity.

• Provide a competitive and transparent compensation and benefits package, including:

  • Fair, reasonable, and equitable base pay for all full-time exempt employees.

  • A starting hourly wage for part-time and non-exempt employees that exceeds the federal minimum wage and is periodically reviewed for cost-of-living alignment.

  • Surplus-based bonuses for full-time employees when OWL exceeds budgeted revenue targets (not guaranteed annually; see Appendix B of the OWL Code of Ethics (under the Governance section in GitBook).

  • Flexible Paid Time Off (PTO) for exempt staff and generous PTO policies for all full- and part-time employees (see Time Off section above).

  • A robust benefits package, including technology stipends and health-related offerings, as described in the Benefits section.

OWL is also committed to full compliance with all state and federal compensation laws and IRS guidelines for nonprofit organizations. All compensation decisions must support OWL's tax-exempt mission and be documented as reasonable under IRS definitions, including for senior leadership and directors.

Compensation Benchmarking and Equity Guidelines

OWL benchmarks compensation against comparable education nonprofits and publicly available data sources (such as 990 reports and sector surveys). To further ensure equity and alignment with our educator-centered mission, OWL uses the national average U.S. teacher salary (adjusted to 12 months) as a reference point for full-time exempt roles. Our benchmark range is as follows:

• The starting salary for any full-time role should be no less than 65% of the national average teacher salary.

• A goal is set for employees to reach 100% of that benchmark within three years of service.

• The maximum salary for any OWL employee should generally not exceed 150% of the national average teacher salary.

While this benchmark range is not a hard limit, it serves as a reference to promote fairness, reduce salary compression, and avoid disproportionate pay differences - especially between leadership and other team members. Increases for employees below benchmark will be prioritized in annual compensation planning, separate from surplus-based, point-system merit adjustments.

Governance and Oversight

Hourly compensation for part-time and non-exempt employees is determined by the OWL Leadership Team and reviewed by the Board.

Full-time exempt compensation (including for OWL Directors) is reviewed and approved annually by the Board of Directors in alignment with this policy and the procedures outlined in the OWL Salary Adjustment & Bonus SOP.

The Board may establish a Compensation Subcommittee to conduct periodic reviews of market alignment and ensure compliance with OWL's mission, IRS standards, and evolving organizational capacity.

SALARY ADMINISTRATION

Pay Schedule & Distribution

• Employees are paid once per month, with payroll issued after 8:00 a.m. ET on the last banking day of the month.

• Non-exempt employee pay is based on approved timesheets submitted by the 15th of each month for the preceding pay period.

• Pay includes all earned wages or salary, less required and authorized deductions.

• Payment is made via direct deposit to the account specified on the employee's Direct Deposit Authorization Form. If no form is on file, a paper check will be mailed to the employee's address of record.

OWL strongly encourages all employees to enroll in direct deposit to ensure timely, secure delivery of pay.

Temporary Twice-Monthly Pay Option

While OWL's default pay schedule is monthly, employees facing temporary personal financial hardship may request to be paid on a twice-monthly basis for a limited duration.

• Approval is granted on a case-by-case basis by the OWL Leadership Team.

• Requests must be submitted at least 30 days in advance of the intended start and include the desired duration and reason.

• Due to increased administrative complexity, this option is only available as a short-term accommodation and may be limited based on staffing and payroll processing capacity.

• Non-exempt employees must still follow timesheet submission deadlines, and any changes to pay frequency must comply with federal and state labor regulations.

Deductions & Withholdings

Each paycheck reflects:

• Mandatory deductions: Federal, state, and local income taxes, Social Security (FICA), Medicare, and other legally required withholdings.

• Elected deductions: Voluntary deductions authorized by the employee, including 403(b) contributions, insurance premiums, or other approved benefit elections.

To set up or change elected deductions, employees should contact the Manager of Finance, HR, and Communications.

Paycheck Errors & Lost Payments

Employees should promptly notify the Manager of Finance, HR, and Communications if:

• A paycheck appears inaccurate;

• A payment is missed or not received;

• A direct deposit or check is sent to an incorrect address or account.

If a paper check is lost or destroyed, OWL reserves the right to charge a replacement processing fee. Also note that payroll advances are not permitted.

Workweek Definition for Non-Exempt Employees

For timekeeping and overtime purposes, the OWL workweek begins at 12:01 a.m. Sunday and ends at 12:00 midnight the following Saturday. Time worked during this period is used to calculate standard and overtime pay for non-exempt employees.

Personnel File Updates

Each employee has a confidential personnel file maintained by the Manager of Finance, HR, and Communications. Employees may review their file upon request. To ensure timely and accurate pay, all employees must promptly report changes in:

• Name or legal status

• Address or phone number

• Banking details

• Tax withholding elections (e.g., number of exemptions)

Wage Compliance

OWL assigns positions, determines compensation, and administers overtime in accordance with the Fair Labor Standards Act (FLSA) and applicable state and local labor laws. For related expectations on pay equity, transparency, and ethical conduct, refer to the OWL Code of Conduct & Ethics.

OVERTIME PAY (ONLY APPLICABLE TO NON-EXEMPT EMPLOYEES)

In accordance with the Fair Labor Standards Act (FLSA), only full- and part-time non-exempt employees are eligible for overtime pay. Overtime is defined as any authorized time worked in excess of 40 hours in a single workweek.

Overtime Pay Rates:

• Standard Overtime - Time worked beyond 40 hours in a single workweek is paid at 1.5x the employee's regular hourly rate.

• Holiday Overtime- Any hours worked on an OWL-recognized holiday are paid at 2x the employee's regular hourly rate, regardless of the total hours worked that week.

Note: Holiday pay for working on a recognized holiday is separate from the standard holiday pay provided to eligible employees who do not work that day. Employees who are required to work on a recognized OWL holiday will receive double their regular hourly rate for all hours worked on that day, in addition to any standard holiday pay they are eligible for.

Authorization Requirements

• Overtime must be approved in advance by the employee's Director or the OWL Leadership Team.

• In urgent or client-driven situations where advance approval isn't possible, the employee must notify their Director as soon as possible for retroactive approval and documentation.

• While unauthorized overtime may lead to corrective action, OWL will compensate all overtime hours worked, in compliance with federal labor laws.

Time Tracking & Payroll

• Non-exempt employees are required to accurately record all time worked, including overtime, using OWL's official time tracking system.

• Overtime is paid in the regular payroll cycle following the week in which it was earned.

• Paid holidays, PTO, sick leave, and other forms of paid time off do not count toward the 40-hour threshold for standard overtime calculation.

Note: For information related to compensatory time (comp time) and overtime eligibility, especially for non-exempt employees, please refer to the above COMP TIME section of this Handbook. These policies are grounded in FLSA guidelines and help ensure both fairness and compliance.