By: Katherine Muniz Dec 15, 2016

Why is Comp Time Off Almost Never Allowed?

Compensatory time, or ‘comp time’ as it is better known, refers to the practice of granting employees extra time off instead of cash overtime wages as compensation when working overtime. Because this practice conflicts with the Fair Labor Standards Act (FLSA), the practice of offering comp time as an alternative to overtime pay is illegal. 

“The most common and unlawful definition of comp time is where a nonexempt employee works 50 hours in one work week and, instead of being paid overtime for those 10 hours, is granted comp time or 15 hours of additional time off time to be used in another work week,” says Nancy D. Greene, Esquire at Land, Carroll & Blair PC. “Unless you are the federal government this practice violates federal overtime law.” 

The FLSA, which establishes the federal overtime law, entitles all nonexempt workers to one-and-a-half times their normal rate of pay for every hour of overtime worked. Private employers are not able to offer comp time instead of overtime pay. 

However, while the practice isn’t allowed as a lawful substitute for overtime pay by private employers, according to Micah Longo, a Labor & Employment Law Attorney in South Florida, the term “compensatory time” should be understood as a practice reserved for the public sector, not private employers.

“First, the term ‘compensatory time’ is a term that refers to the public sector, method of non-cash payment for overtime under the Fair Labor Standards Act.  Now, under certain conditions, state/government agencies may allow comp time-off at a rate of not less than 1.5 hours for each overtime hour worked, instated of cash overtime pay. A public sector employee must be allow to use comp time on the date requested unless doing so would ‘unduly disrupt’ the operations of the agency.”

According to Attorney Longo “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.” Though substituting overtime pay with comp time is illegal, private employers can offer exempt employees comp time as a benefit. 

“Typically comp time is only for federal employees,” says Michael Gottlieb, Attorney & Founder of Momentum Law Group. “A private sector employer can provide time off that looks a lot like comp time as a benefit for its exempt employees. However, it’s important to remember that exempt employees (i.e., an employee that meets both the salary basis test and the duties test) are going to get paid a set salary (and they aren’t entitled to overtime), so comp time in that case just becomes additional paid time off (beyond whatever sick/vacation/PTO the employee may already be entitled to).” 

Did you find this article helpful? We’d love to hear your thoughts in a comment below. Special thanks to Attorney Micah Longo, Attorney Michael S. Gottlieb, and Nancy D. Greene, Esquire. 

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Category: Compliance | Payroll Law

Katherine is a New York-based digital writer who joined Fingercheck in 2015. She promotes Fingercheck through the power of the written word. She graduated from Fordham University with a B.A. in Communications and Media Studies with a focus on Journalism. Connect with her on LinkedIn

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