Offering employees comp time instead of paying them overtime is not legal.
Giving your employees time off instead of paying them overtime has been a fairly common and accepted practice for many companies. However, both state and federal regulations clearly state that comp time instead of overtime pay is not legal for private companies. (It is allowed under FLSA for some public agencies.)
Overtime is based on the employee’s regular, seven-day workweek. It is not based on a pay period (whether the pay period is weekly, biweekly, bimonthly, monthly, etc.).
Consider this:
Rose has regular workweek of Monday to Sunday. She has a doctor’s appointment next Tuesday and will come to work an hour late. She’d like to make up the time.
- If Rose stays an hour late on Saturday to make up the time for next Tuesday, this comp time is not legal because the extra time worked was in a different workweek and thus would be considered overtime.
- If Rose stays late on Monday to make up the hour she will miss on Tuesday, that is allowed because it is in the same workweek and no overtime will accumulate.
Questions? Need a bit of clarification? Contact your payroll specialist and we’ll be glad to help.