Posted by Tamara
Government agencies commonly use “comp time” as an alternative to paying overtime. “Comp time” is simply paid time off in a future payroll week granted to employees in lieu of overtime pay.
It is illegal for private employers including businesses to use comp time to avoid paying overtime in the U.S., under federal law.
The relevant law regarding use of “comp time” is the Fair Labor Standards Act. FLSA is a federal law that regulates overtime hours and overtime pay. It is this law’s definition of overtime and how it’s paid that determines if “comp time” is legal.
For example, a West Virginia employer has a busy week. Four employees have put in 10 hours of overtime in one week. Instead of paying them overtime, the employer wants to grant them paid time off sometime in the future when the company is less busy. This is illegal.
In another example, an employee accepts a new job and requests time off for a long-planned trip. The employer grants unpaid leave for the trip. To make up for the lost pay, the employee wants to work extra hours during the week prior and the week after her vacation, and use those hours as “comp time” instead of being paid overtime. Again, this is completely illegal.
Both of these situations violate FLSA, which mandates that any employee who works over 40 hours in one payroll week be paid overtime pay at a rate of 1.5 times the average hourly rate. This overtime pay is calculated per pay week, not pay period. Granting time off in the future instead of paying overtime is illegal.
An employer can legally give the employee time off in the same payroll week. For example, an employee works 5 extra hours on Monday and the employer asks the worker to leave 5 hours early on Thursday. As long as Monday and Thursday are in the same payroll week, this strategy is perfectly legal. While some employers call this “comp time” it does not meet the legal definition of paid time off in a future payroll week.
Last 10 posts by Tamara
- Louisiana Employee Privacy Act - April 20th, 2011
- FMLA 101 – Mississippi Maternity Leave - April 19th, 2011
- Florida Overtime Update - April 18th, 2011
- Delaware Paid Holidays - April 15th, 2011
- North Carolina Employee Privacy Act - April 14th, 2011
- Wisconsin NLRA Poster Requirement - April 13th, 2011
- Ohio Maternity Leave - April 12th, 2011
- Georgia Overtime Update - April 11th, 2011
- Oklahoma Paid Holidays - April 8th, 2011
- Maryland Overtime Per Diem Update - April 7th, 2011