Posted by Tamara
Comp time is time off in a future payroll week granted to an employee instead of overtime payment.
Under the federal FLSA or Fair Labor Standards Act, private businesses cannot grant comp time instead of paying overtime. Comp time is legal for some state and federal employees, especially firefighters and law enforcement personnel.
Suppose Grace works 45 hours this week. She would normally be entitled to 40 hours at her regular rate, plus 5 hours of overtime at 1.5 times her average hourly rate. However, Grace is a city policy officer. Instead of being paid overtime, she is granted 7.5 hours of comp time (paid time off) to be used during a future payroll week. Note that Grace must be granted 1.5 hours of comp time for each hour of overtime worked. She can use the comp time at any time that is mutually convenient for her and the employer. Grace decides to use her comp time next week. She works just 32.5 hours next week and is paid for 40 hours – the time she worked plus 7.5 hours of comp time.
However, again, private employers cannot grant comp time instead of paying overtime to employees. If Grace worked for a private security firm, the scenario above would be illegal. Grace would be entitled to overtime when she works more than 40 hours in the payroll week.
Time off granted in the same payroll week is not comp time. This is a common way for employers to control overtime and payroll expenses. Suppose Carl normally works 7 a.m. to 3 p.m. Monday through Friday. One Wednesday, Carl works until 7 p.m. Carl’s employer requires that he leave 4 hours early on Thursday, to compensate. This is not comp time – Carl has worked only 40 hours in the payroll week and is not entitled to any overtime.
Some very generous employers grant comp time to exempt employees, who are never entitled to overtime. Bettina’s employer is one of them. Bettina usually works 45 hours per week as an exempt employee. One week she puts in 55 hours finishing a special project. Bettina’s employer gives her 10 hours of “comp time” that she can take off during a future payroll period – even though the employer is not required by law to do so. Although the employer calls this “comp time” it does not meet the legal definition, since Bettina is not entitled to overtime.
In a few states, comp time is legal if the employer is not covered by the federal overtime law.
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