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Arizona Comp Time

Posted by Tamara

“Comp time” is sometimes appealing to both employers and employees in Arizona. Employers may want to use it to control payroll costs. Workers may like using it to take an afternoon off.

The question, however, is whether “comp time” is legal in Arzona. The answer is that, under most circumstances, it is not.

Under the federal FLSA or Fair Labor Standards Act, non-profit organizations may grant “comp time.” Government agencies may do so as well. Private companies may not do so unless the “comp time” falls in the same week as the day a worker put in extra time.

Given these facts, it is easy to see the answer to the following questions:

An Arizona business owner wrote to ask, “Can I grant comp time workers instead of paying overtime?”

In another part of the state, an hourly employee also asked about comp time. He wrote to say, “I was just recently hired in an hourly job. My new employer very graciously agreed to give me two weeks of unpaid vacation, to take a long-planned trip. I’d like to work extra hours the week before and after, to make up the lost wages. Can I do this without being paid overtime?”

In both cases the answer is “No.”

“Comp time” is defined as paid time off in a different payroll week, granted instead of paid overtime. As noted, government agencies and non-profits may use it. According to the federal FLSA, or Fair Labor Standards Act, however, employees must receive overtime rates when they work more than 40 hours in a given payroll week. Employers may not give an employee comp time in a different week in lieu of overtime. It is also illegal to average a worker’s hours over two payroll weeks, even when they fall in the same payroll period.

When hourly employees work 50 hours, for example, in a payroll week, they must be paid for 40 hours at regular rates and 10 hours at overtime rates. Without exception, overtime is determined at 1.5 times the employee’s average pay rate for that specific payroll week.

It is entirely legal for the employer to give a worker time off during the same payroll week, however. Because the employee works 40 hours or less during the week, this does not meet the legal definition of “comp time.”


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