Before discussing forced overtime, it is helpful to understand overtime pay laws in general. The Fair Labor Standards Act (“FLSA”) is the federal law that governs many aspects of employment, specifically overtime pay and minimum wage. Additionally, the Act has set standards for record keeping and youth employment for both the private and public sectors.

The FLSA defines overtime as any work hours exceeding forty hours in one work week. Past those forty hours, an employee is legally entitled to receive at least 1.5 times their regular pay per hour. This is most commonly known as time and a half. It is important to note that some employees and occupations are not covered by the FLSA, such employees are considered to be exempt employees. For an employee to qualify for and receive overtime pay, they must be covered under the law and the law must apply to them. These employees are known as nonexempt employees.

Compensatory time is often referred to as mandatory or forced overtime. In exchange for this forced time, the employer may provide the employee with paid time off in the future instead of paying overtime wages. Another way to put it is that compensatory time is a work arrangement in which an employee is allowed to take time off, instead of receiving overtime pay.

An example of this would be if an employer requests that an employee complete overtime work at the standard rate of time and a half for every hour past the forty hours in one work week. The employee could choose to forfeit the overtime pay rate in order to receive paid time off at a later date. In the United States, such arrangements are generally considered to be legal for public sector jobs, but not private sector jobs.

What Are Some Examples Of Common Compensatory Time Violations and Disputes?

Although compensatory time is often touted as being a benefit for employees, many employees take issue with the mandatory overtime laws themselves. This is largely due to the fact that some states offer more protections than others in terms of working more than an average work week. These differences can allow for abuse and exploitation from the employer.

A compensatory time arrangement can be subject to specific legal issues and disputes. Some examples of the most common disputes include, but may not be limited to:

  • Violation of Law: As previously mentioned, compensatory time arrangements are not considered to be legal for all forms of employment. Additionally, whether such an arrangement is allowed can vary from state to state. Compensatory time arrangements could violate local, state, or federal laws. As such, it is imperative that both employers and employees familiarize themselves with the updated laws associated with compensatory time in order to ensure neither party is violating any law;
  • Discrimination: Employment discrimination occurs when an employee, or potential employee, is treated less favorably than other comparable employees because of their belonging to a protected class. Denial of compensatory time based on a person’s protected class could be considered another form of employment discrimination. An example of this would be if all employees of one gender identity are granted compensatory time while all employees of another gender identity are not; and
  • Wrongful Termination: Wrongful or unlawful termination refers to a situation in which an employee is fired from their job for illegal or unauthorized reasons. Compensatory time can be associated with legal issues involving wrongful termination if an employee is terminated because they claimed compensatory time that they are legally entitled to.

One of the biggest legal issues associated with compensatory time has to do with the fact that an employer can force an employee to work overtime. Federal laws regulating overtime have determined that so long as an employee is paid a proper rate, there is no limit to the amount of mandatory overtime that they may be required to work. This applies to employees who are sixteen years of age and older.

Some employers not only require that an employee report for overtime work when required, but also that refusal to do so may be grounds for termination for refusing to work overtime. This is especially common in industries involving work that increases during specific times of the year. An example of this would be winter holiday months in warehouses, shipping, and/or retail.

Additionally, the FLSA does not require an employer to pay overtime pay on:

  • Weekends;
  • Holidays; and/or
  • Regular days of rest, unless the employee has already worked forty hours.

There is one especially notable exception to mandatory overtime requirements, which would be if forced overtime would cause safety issues for employees. In such cases, there may be certain restrictions on overtime hours. An example of this would be airline pilots and semi-truck drivers. Because of issues with fatigue, these industries have specific rules in terms of the number of hours that an employee may work within a specified period of time. These hours are closely monitored and restricted, as a violation could lead to public endangerment issues.

Are There Any Exemptions to Compensatory Time?

There are certain circumstances in which an employer may rearrange an employee’s work schedule during a pay period, in order to provide compensatory time in lieu of overtime pay. This can only be done when two conditions are met:

  1. The compensatory time is taken the same pay period in which as the overtime work, and
  2. The employee is compensated for any lost overtime premium in the form of an hour and a half off of work for every hour of overtime they work.

According to the FLSA, the two types of workers are salaried and hourly. While hourly workers must be paid for any overtime, salaried employees are exempt from many of the regulations provided by the FLSA. This includes regulations regarding overtime payment. Salaried employees may be given compensatory time instead of overtime.

States may maintain their own regulations in terms of compensatory time. An example of this would be how California requires that the employee must consent, in writing, to the use of compensatory time prior to actually working the mandatory overtime.

The Federal Supreme Court has determined that federal law does not prohibit employers from forcing employees to use compensatory time. What this means is that federal law does not prohibit employers from setting expiration dates in which compensatory time must be used. However, many states do have laws which forbid employers from forcing compensatory time usage.

What Else Should I Know About Compensatory Time?

If an employee was terminated prior to using all of their earned compensatory time, the time remaining must generally be converted into overtime pay for the employee’s last payment. If their final paycheck does not reflect the credited compensatory time, it is important to contact the employer before accepting the final paycheck in order to determine what happened to that compensatory time.

Compensatory time conflicts are generally resolved by filing a complaint with a government agency, such as the Wages and Hour Division (“WHD”) of the Department of Labor. Doing so will lead to an investigation and a potential remedy. The WHD may suggest that the employee is compensated for lost wages as applicable; or, they may require the employer to grant compensatory time if it was improperly denied.

More complex issues, such as discrimination or those that affect a large number of employees, may require filing with the Equal Employment Opportunity Commission (“EEOC”). If agency investigations do not produce a suitable remedy, a private lawsuit may be filed with the goal of obtaining a damages award.

Do I Need an Attorney For Issues Involving Compensatory Time?

Employment law, especially laws regarding compensatory time, vary widely from state to state. Additionally, compensatory time arrangements can leave room for employee abuse at the hands of their employer. Thus, if you have any questions regarding the compensatory time laws of your state, or if you are experiencing issues related to the subject, you should consult with an experienced and local employment lawyer as soon as possible.

An experienced and local employment attorney will be best suited to helping you understand your legal options according to your state’s specific laws. Additionally, an attorney will also be able to represent you in court, as needed, while protecting your legal rights as an employee.