Glossary > Employment Law > Wage And Hour Laws > Payroll Practices

Compensatory Time

Compensatory time, often referred to as comp time, is when an employer offers employees paid time off in lieu of monetary overtime pay. This practice allows employees to accrue extra time off work instead of receiving extra wages for working overtime hours.

Example #1

For example, if an employee works 5 extra hours this week, instead of paying them overtime for those hours, the employer may offer them 7.5 hours of paid time off to be used in the future.

Example #2

Another example could be an employee working on a weekend project and being granted comp time equivalent to the extra hours worked during that project.

Misuse

Misuse of compensatory time can occur when employers fail to follow the regulations set forth by the Fair Labor Standards Act (FLSA) regarding comp time. For instance, an employer might pressure employees to accept comp time instead of overtime pay without their consent, violating their rights to fair compensation for overtime work. It's important to protect against misuse to ensure employees are not taken advantage of and are fairly compensated for their extra work.

Benefits

One of the benefits of compensatory time is that it offers employees flexibility in managing their work-life balance. By accruing paid time off in exchange for overtime work, employees can take time off when they need it without having to worry about losing wages. This can be particularly beneficial for employees who value time off to recharge and spend with family.

Conclusion

Compensatory time, when used appropriately, can provide employees with a valuable benefit of extra paid time off. However, it's essential for employers to adhere to regulations to prevent misuse and ensure that employees are fairly compensated for their work.

Last Modified: 4/30/2024