Compensatory time (comp time) and Compensatory time-off are terms that can be exchanged with each other. Under the FLSA (Fair Labor Standards Act) they define the same thing, namely the paid time off the job which is due to the employee for employment in excess of the statutory hours.
…the terms compensatory time and compensatory time off mean hours during which an employee is not working, which are not counted as hours worked during the applicable workweek or other period for purposes of overtime compensation…
Fair Labor Standards Act of 1938 (as amended 29 U.S.C. 201, et seq.)
The minimum wage is $7.25 per hour and for more than 40 hours in a week without receiving at least one and one-half times of their regular pay rate for the overtime hours.
Section 7 of the FLSA requires that covered, nonexempt employees receive not less than one and one-half times their regular rates of pay for hours worked in excess of the applicable maximum hours standards
Fair Code of Federal Regulations, Title 29, Labo
There are some employees exempted from minimum wage and/or overtime pay if they receive a salary and make more than $684 per week. The most common workers for whom the employer is not obliged to pay overtime are in the following categories:
- Commissioned sales employees
- Computer professionals
- Drivers, driver’s helpers, loaders and mechanics
- Farmworkers
- Salesmen, partsmen and mechanics
- Seasonal and recreational establishments
- Executive, administrative, professional and outside sales employees
Compensatory time in Private sector
Noteworthy that for the majority of private-sector businesses (including private-sector nonprofit agencies) compensatory time (comp time) it is illegal.
In the private sector compensatory time is allowed but not required for exempt employees. As they are not eligible for overtime pay, it is up to the employer to offer any compensatory time in exchange for hours worked in excess
Even if in certain situations the employees would prefer this, it is not legal to compensate non-exempt employees, eligible for overtime pay, with compensatory time instead of overtime pay.
Compensatory time in Public sector
The public sector employees, under certain circumstances, receive compensatory time (comp time). Some of the conditions that need to be met are:
- between the employer and the employee must be an agreement in this regard before the extra hours.
- the profession of the employee should be non-exempt, that is, not to fall into the categories included above.
- the employee must work on a salary base, not to be an hourly employee
Time limits regarding Compensatory time (comp time)
The accrued compensatory time off must be used within 26 pay periods from the pay period during which the employed earned it. If this does not happen within the time frame mentioned then:
- A nonexempt employee must be paid for the earned compensatory time off at the overtime rate
- An exempt employee
- must receive payment for the unused compensatory time off at the overtime rate in effect when earned or
- forfeit the unused compensatory time off, unless failure to use the compensatory time off is beyond the employee’s control
Compensatory time enforcement
Fair Labor Standards Act (FLSA) is enforced by the Department Of Labor, The Wage and Hour Division. If the investigators determine that there are violations of compliance with the law, penalties will apply. In the case of repeated violations of the legal provisions regarding the minimum wage or overtime pay requirements, there will be a civil money penalty of up to $ 1,000 for each violation. To ensure that your business policies comply with the law regarding compensatory time (comp time), it is advisable to consult an employment law specialist and also consult with your state’s government agency.
PlanArty time management solution helps you know exactly how many hours you worked and on what, and this including during overtime.
Mariana Holostenco
Istvan Meszaros
