Just Say No To Comp Time


Some definitions to get us started:

Compensatory time (“comp time”) aka banked hours: A method used by employers to compensate employees for overtime hours worked. Rather than pay out the overtime owed the employer allows employees to take time off in future weeks or months at either at an amount equal to the overtime hours worked or at time and one half.

Non-exempt employees: Employees to which overtime regulations apply. They are not exempt from the overtime requirements.

This Tip of the Week is very simple. Private sector employers who are covered by the Fair Labor Standards Act (almost everyone) CANNOT under any circumstances use compensatory time or banked hours as a method of compensating non-exempt employees for their overtime.  It does not matter if the employee prefers comp time to actual overtime pay. It is not a legal method of overtime compensation.

Again, this pertains to non-exempt employees; those workers to whom overtime regulations apply.  If you have an employee who is a salaried general manager who meets the requirements of the executive exemption under the regulations found at 29 CFR 541.100 (or any other bona fide exemption) then you are free to give that person compensation (in addition to their guaranteed salary) as you see fit.

The only employees who are eligible to receive comp time are those employed by a state or local agency.  Under the Fair Labor Standards Act (federal law) those employees can receive comp time as long as the following is true:

  • They receive the comp time at time and one half.  So if they worked 5 overtime hours they receive 7.5 hours of comp time.
  • Law enforcement, fire protection, and emergency response personnel and employees engaged in seasonal activities may accrue up to 480 hours of comp time; all other state and local government employees may accrue up to 240 hours.
  • They are allowed to use their comp time for the dates they request it as long as it doesn’t “unduly disrupt” the operations of the agency.
  • There is an agreement place between the employee and the agency or between the representing union and the agency that comp time will be used.

It should be noted that if a state has its own labor laws that cover public agency employees and it bars them from receiving comp time then that law would override the FLSA provisions since the law that most protects the employee is the one that is enforced.

As an interesting side note the U.S. House of Representatives passed a bill, H.R. 1406 Working Families Flexibility Act of 2013, on May 8, 2013. The bill proposes amending the Fair Labor Standards Act to allow private sector employers to use comp time. The bill went to the Senate where it was referred to the Committee on Health, Education, Labor and Pensions. Republicans say it provides flexibility to working parents and that workers prefer time off to pay.  Democrats say that it undermines the 40 hour workweek,  it could result in employers firing workers who won’t work extra long workweeks, and it allows employers to determine when employees take the comp time.  Similar bills were introduced in 1996, 1997, and 2003 to no avail.

We hope you found this week’s tip helpful and informative. Please pass it along to anyone you think might be at risk as a result of using comp time in lieu of overtime pay. Follow us on facebook to get the next Tip of the Week on your newsfeed!

Link: https://laborbrain.com/comptime/

–     By Kalen Fraser

The Labor Brain Inc. is not a law firm and its employees do not practice law or provide legal services.  The information provided on our website,  in email correspondence with representatives of The Labor Brain, and at outreach events is for informational and educational purposes only.  The information provided is not a substitute for the advice of an attorney.