Sometimes an employer will ask you to work extra hours, or mandatory overtime. In exchange, the employer might give you time off in the future instead of paying you for overtime. This time off is called compensatory time.
Compensatory time is a work arrangement wherein an employee is allowed to take time off in lieu of receiving overtime pay. It is also referred to as “time off in lieu,” “comp time,” and “compensatory time off.”

For instance, suppose that an employer requests an employee to perform some overtime work at the normal one-and-a-half rate for every hour after a 40-hour work week. Under a comp time arrangement, the worker might choose to forgo the overtime rate and take paid time off at a later date instead.

In the U.S., comp time arrangements are generally legal for public sector jobs, but they are generally considered to be illegal in private sector jobs. You may wish to check with your employer or with an attorney if you need help determining whether your job can legally allow comp time or not.

What Are Some Common Compensatory Time Violations and Disputes?

Compensatory time off is often seen as a benefit for employees, as it allows them a few more options in terms of their work schedules. However, this type of arrangement can be subject to certain legal issues and disputes, such as:

  • Violation of Law: As mentioned above, compensatory time off is not allowed in every type of employment arrangement. Comp time arrangements that violate local, state, or federal laws are illegal and may result in legal consequences for violators.
  • Discrimination: Denial of comp time based on a person’s age, race, sex, or other protected category may be considered discrimination.
  • Wrongful Termination: Legal issues involving wrongful termination may result if an employee is fired for claiming comp time that they are legally entitled to.

If I Have Worked Overtime, Is My Employer Allowed to Give Me Compensatory Time Instead of Overtime Pay?

Generally, the answer is no. Federal law requires that all employees on an hourly wage must be compensated for overtime work (i.e., more than 40 hours a week under federal law) by being paid 150% of their regular wage per overtime hour. While it is not considered legal in the private sector, employees working for the federal and state governments are allowed to receive compensatory time in certain circumstances. If you are a federal or state employee, consult your employee handbook or talk to your manager to find out what those circumstances are.

Can an Employer Ever Give Me Compensatory Time Instead of Overtime Pay?

An employer may rearrange the employee’s work schedule during a pay period to provide compensatory time off instead of overtime pay. The employer may do this only if:

  • The compensatory time is taken during the same pay period as the overtime work; and
  • The employee is compensated for the lost overtime premium by being given an hour and a half off for every hour of overtime worked.

Are There Any Exemptions To Compensatory Time?

In federal law, compensatory time is governed by the Fair Labor Standards Act (FLSA). The act recognizes two types of workers: salaried and hourly. Hourly workers must be paid for any overtime. Salaried employees, on the other hand, are exempt from many of the regulations of the FLSA, including the regulations regarding overtime payment. Under federal law, salaried employees may be given compensatory time instead of overtime. Other federal law exemptions, like exemptions for farmers or health care workers, may also apply.

Do States Have Any Regulations on Compensatory Time?

States may have their own regulations regarding compensatory time and these regulations will differ from state to state. For example, California requires that the employee must consent in writing to the use of compensatory time prior to working the overtime. The employee must also be considered a full-time worker, forty hours a week, and must be given compensatory time at the same rate as federal overtime pay, or same amount of overtime worked plus a half.

Can My Employer Make Me Use My Compensatory Time?

The Federal Supreme Court has ruled that federal law does not prohibit employers from forcing employees to use compensatory time. Federal law also doesn’t prohibit employers from setting expiration dates for compensatory time usage. However, many states have laws forbidding employers from compelling compensatory time usage.

What Happens If I Am Terminated Before I Can Use My Compensatory Time?

If an employee was terminated before they could use all of their compensatory time, the compensatory time remaining is typically converted into overtime pay for the employee’s last payment. If your final paycheck does not reflect the credited compensatory time, then it’s important to contact your employer right away, before you accept the final paycheck, to find out what happened to your compensatory time.

What Should I Do if My Employer Illegally Gave Me Compensatory Time?

Wage laws can be complicated and vary from state to state. An experienced employment attorney can help you determine whether you were entitled to overtime pay. An employment attorney can also help you file the necessary paperwork and represent you in court.

How Are Compensatory Time Conflicts Remedied?

Comp time conflicts can be resolved through filing a complaint with a government agency such as the Wages and Hour Division (WHD) of the Department of Labor. Filing a complaint with a government agency will lead to an investigation and a suggestion of a possible remedy for the worker. In terms of a possible remedy, the WHD may suggest that the employee be compensated for lost wages as applicable or require the employer to grant comp time if it was improperly denied.

Larger issues, such as those involving discrimination or those affecting many employees, may need to be filed with a different government agency such as the Equal Employment Opportunity Commission (EEOC). Alternatively, a private lawsuit may be filed in cases where agency investigations do not result in a sufficient remedy.

Do I Need a Lawyer for Help with Compensatory Time Laws?

Compensatory time and overtime laws can often be complex, as they are contain many details and exemptions. It may be to your advantage to hire an employment law attorney in your area if you have any questions or if you need any assistance with compensatory time issues. Your lawyer can provide you with legal research to help address your inquiries, and can also review employment contracts to determine your rights. If you need to file an agency claim or if you need to file a private lawsuit, your attorney can provide representation during those times as well.