My Current State: 

Colorado Comp Time

Posted by Tamara

How to legally use “comp time” can be confusing for a private employer. Government agencies often use “comp time” (paid time off in lieu of paid overtime), as do some non-profit organizations. Private employers, however, must uphold the FLSA, a federal law that regulates overtime hours and pay.

According to the FLSA or Fair Labor Standards Act, if an employee works more than 40 hours in a payroll week, that worker is entitled to overtime pay for the additional time worked. Overtime is paid at a1.5 time the employee’s average rate and is calculated per pay week.

The important point of this law is that the overtime is calculated per payroll week, not by payroll period.

For example, Jason works 50 hours the first week of the pay period and 30 hours the second week for a total of 80 hours for the pay period. The employer wants to average the hours over the pay period and pay Jason for 40 regular hours for each week. This is a violation of FLSA.

What if the employer offers “comp time” the second week as payment for the 10 hours of overtime in the first week? This is also a violation of FLSA.

Jason should be paid as follows: 40 hours of regular time and 10 hours of overtime for the first week, and 30 hours of regular time for the second week.

It is illegal for the employer to offer “comp time” in any other week rather than paying overtime.

Consider Heather, who works for a company with a Tuesday through Monday payroll week. If she works extra hours on Monday, she must be paid overtime, because her payroll week ends on Monday.

If she works extra hours on Friday, however, her employer can legally grant her time off the following Monday, because both the overtime and the time off take place in the same payroll week. This is not “comp time” within the usual definition, which is paid time off in a different payroll week in lieu of overtime.


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