Posted by Tamara
What is “comp time” and is it legal in Alabama? “Comp time” is short for compensatory time. It’s a term for paid time off that is granted to an employee as an alternative to paying overtime.
The relevant law is the federal Fair Labor Standards Act (FLSA). Under this law the legality of comp time depends on the type of employer. For some state and federal employees, or employees of nonprofit agencies, comp time is legal. For employees of private businesses, however, comp time is illegal.
FLSA mandates that employees of private businesses be paid overtime when they work more than 40 hours in one payroll week. This overtime must be paid at 1.5 times the employee’s usual hourly rate. Any private employer that does not pay overtime or that uses comp time to avoid paying overtime is in violation of FLSA and breaking the law.
Alabama employees who are legally granted comp time are entitled to the overtime rate as well. For each hour of overtime, the employee must receive 1.5 hours of comp time.
Granting “comp time” is completely at the eligible employer’s discretion, and the employee can take this paid time at any time that is mutually convenient for both the worker and the employer.
There are some private employers who give “comp time” to their exempt employees, the workers who are not entitled to overtime pay. For example, Jason is an exempt employee who normally works 45 hours per week. During a very busy week, Jason worked 55 hours one day to complete a project. His employer generously granted him 10 hours of “comp time” to be taken in the future. Though the employer used the term “comp time” this type of paid time off doesn’t fit the legal definition, because Jason isn’t entitled to overtime pay.
There are a few states where private employers can grant comp time, but only if the employee works for a nonprofit agency, or for the state or federal government.
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