Comp Time

What is comp time?
Comp time is when an employer allows an employee to take time off work rather than pay overtime. While there are instances when comp time is ok, in most situations this practice may be illegal.

Private Sector
Non-exempt employees working in the private industry are not eligible for comp time. Under the FLSA regulations, non-exempt (includes salaried non-exempt) employees must be paid overtime at time-and-one-half their regular rate of pay for any hours worked over 40 in a typical workweek. However, there are some states that allow comp time. The state of Washington authorizes comp time if the employee agrees to it. California also allows public and certain private employers to offer comp time. Since allowing comp time may be in direct conflict with the FLSA, please check with your legal counsel or state Department of Labor to confirm your states position on comp time before implementing such a policy.

Exempt employees in the private sector are not entitled to comp time since they are not entitled to overtime pay. However, an employer may offer comp time to exempt employees for excessive time worked over their typical hours in a workweek. This comp time is solely for additional time off and should not be tied to or affect their salary. Exempt employees should know that their classification as exempt comes with the understanding that they may be expected to put in extra hours in order to complete a task or project without extra compensation.

Still, it’s nice to be recognized for putting in the extra effort and employers can come up with other ideas of rewarding employees. CLICK HERE for a list of things to reward employees for working above-and-beyond.

Public Sector
Employees in local, state, and federal agencies may be eligible for comp time at the rate of one and a half hours for each overtime hour worked.

DOL Fact Sheet #7: State and Local Governments Under the Fair Labor Standards Act (FLSA), states…

“Compensatory Time: Under certain prescribed conditions, employees of State or local government agencies may receive compensatory time off, at a rate of not less than one and one-half hours for each overtime hour worked, instead of cash overtime pay. Law enforcement, fire protection, and emergency response personnel and employees engaged in seasonal activities may accrue up to 480 hours of comp time; all other state and local government employees may accrue up to 240 hours. An employee must be permitted to use compensatory time on the date requested unless doing so would “unduly disrupt” the operations of the agency.”

DOL Fact Sheet #8: State and Local Governments Under the Fair Labor Standards Act (FLSA), states…

“Under certain prescribed conditions, a State or local government agency may give compensatory time, at a rate of not less than one and one-half hours for each overtime hour worked, in lieu of cash overtime compensation. Employees engaged in police and fire protection work may accrue up to 480 hours of compensatory time. An employee must be permitted to use compensatory time on the date requested unless doing so would “unduly disrupt” the operations of the agency.”

Preventive Measures
Whether in the private or public sector, in order to prevent employees from having to work extra time employers can look at ways to keep tasks on track. Some suggestions include:

• Create a flexible schedule
• Ensure you have enough employees to perform required tasks
• Review processes and procedures for efficiency

Policy
When drafting a comp time policy, state which employees or departments are eligible for comp time and be mindful of carry over limits. You don’t want employees to let their comp time build up to the point they are able to take weeks off at a time or if you intend to pay out comp time at termination, you don’t want to pay out thousands of dollars for time not taken. A general rule would be to require that comp time must be taken before the next scheduled pay date or within 30-60 days.

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