What is comp time?
Compensatory time or comp time refers to paid time off given to employees who work more than a 40-hour workweek. Comp time may replace overtime pay depending on the employee’s exemption status, the organization and state laws.
Related:How to Create a Time Off Policy
Is your employee eligible for comp time?
There are specific eligibility requirements for comp time. Here are some factors that influence whether or not someone qualifies for comp time rather than overtime pay:
- Federal and state laws:The Fair Labor Standards Act (FLSA) guidelines determine whether an employee is considered exempt or non-exempt. Individual state laws regulate the specifics of comp time usage. It is best to check with your state’s labor laws to be certain.
- Exempt employees:According to the FLSA,
exempt employees
in the private sector may receive comp time if it’s redeemed within the same pay period as extra hours accrued. FLSA-exempt employees must use their comp time within 26 pay periods of the accrual period.
- Non-exempt employees: Non-exempt employees in the private sector who are covered by the FLSA must be paid the overtime rate of one and a half times their usual rate when they accrue additional hours. They are not eligible for comp time.
- Government employees: In special cases, government employees are entitled to comp time rather than overtime pay.
It is wise to confirm your knowledge of the comp time policy with the CEO or head of human resources.
Best practices
Use these best practices to structure comp time and overtime pay:
- Follow overtime laws. Understand how your company compensates for additional hours worked within the pay period. If you’re still not sure how to maintain compliance with the FLSA, contact your state’s labor department for verification.
- Provide flexible work schedules.For situations that do not require overtime, give your employees the option of working extra hours of the week in exchange for leaving early on Fridays.
- Explain the rules regarding comp time.Be clear. When employees don’t understand the rules, they may not work the appropriate hours. Be specific and consistent.
The bottom line for comp time
When your company acquires a new hire, explaining comp time should be part of onboarding . Put company rules regarding overtime pay or comp time in writing. Employee handbooks typically contain this information.
Related: Onboarding Best Practices
Comp time FAQs
Here are some of the most frequentlyasked questions about comp time:
- Who enforces comp time?
- How do I file a claim for unpaid wages?
- Can you lose comp time?
- Is comp time illegal?
Who enforces comp time?
The Wage and Hour Division (WHD) of the U.S. Department of Labor enforces comp time, according to the FLSA). This federal division also handles cases involving wages, overtime pay and child labor laws.
How do I file a claim for unpaid wages?
Because the WHD enforces worker protection laws, you should start by contacting this department to see if they may file a complaint on your behalf. The other alternative to this is going to court against your previous employer. Most people don’t wish to go this route because it can be expensive and time-consuming. Before pursuing any of these routes, try talking to the human resources department to see if you can resolve this issue.
Can you lose comp time?
Yes. Exempt employees must redeem their comp time within 26 pay periods from the first pay period during which it was earned or they risk forfeiture.
Is comp time illegal?
It is illegal to award comp time in some cases. For example, companies and nonprofit agencies in the private sector cannot use comp time to compensate employees for hours worked beyond the 40-hour timeframe. These employees qualify for overtime pay and must be paid their time and a half rate.
