Comp time vs overtime pay
Public employers can give time off instead of overtime pay. Private employers generally cannot. The rules on each side.
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Compensatory time, or comp time, is paid time off given in exchange for extra hours worked. It is often offered informally ("work late tonight and take Friday afternoon off"), and whether that is legal depends almost entirely on whether the employer is private or public.
Private employers
A private employer cannot give comp time instead of overtime pay for hours over 40 in a workweek. Overtime under the Fair Labor Standards Act has to be paid in cash on the regular payday for the period in which the workweek ends. An agreement to bank hours for later time off does not change that, even if the employee asked for it.
What a private employer can do is adjust hours within the same workweek so that no overtime arises. An employee who works 10 hours on Monday can be given 2 hours off on Thursday of the same workweek, keeping the week at 40. The time off has to fall in the same workweek; moving it to the next week does not work, because each workweek stands on its own.
Public employers
State and local government agencies are allowed to give comp time instead of cash overtime under section 7(o) of the FLSA, with conditions:
- Comp time accrues at 1.5 hours for every overtime hour worked, the same rate as overtime pay.
- There must be an agreement before the work is done, through a collective bargaining agreement or an individual agreement.
- Accrual is capped at 240 hours for most employees, and 480 hours for public safety, emergency response and seasonal workers. Hours beyond the cap must be paid in cash.
- Employees must be allowed to use comp time within a reasonable period after asking, unless it would unduly disrupt operations.
- Unused comp time is paid out at separation at the higher of the employee's average rate over the last three years or the final rate.
An example
| Private employer | Public employer with comp time agreement | |
|---|---|---|
| Hours worked | 46 | 46 |
| Overtime hours | 6 | 6 |
| Paid at $24/hr | 40 × $24 + 6 × $36 = $1,176 | 40 × $24 = $960 |
| Comp time banked | None allowed | 6 × 1.5 = 9 hours |
Salaried exempt employees
Employees who are exempt from overtime are not owed overtime at all, so time off for extra hours is a matter of company policy rather than law. Many employers offer it informally for exempt staff. It is only non-exempt private-sector employees for whom "comp time instead of overtime" is not permitted.
If you have been given comp time
If you work for a private employer and have been banking hours instead of receiving overtime, total the overtime hours for each workweek. The time card calculator shows them week by week, and the overtime calculator prices them. Those hours are owed at time and a half. Raise it with payroll first; if it is not resolved, see unpaid overtime.
Frequently asked questions
Can I ask for comp time instead of overtime pay?
At a private employer, no, even voluntarily. Overtime must be paid in money. The employer can instead reduce your hours later in the same workweek so that no overtime arises.
Does comp time expire?
For public employees, federal law does not set an expiry date, but employers can require it to be used and must pay out anything over the cap. Unused comp time is paid when employment ends.
Is flex time the same as comp time?
No. Flex time moves hours around within the same workweek, which any employer can do. Comp time banks overtime hours to take off later, which only public employers can offer in place of overtime pay.