An employer is required to provide "overtime pay" when an employee works more than the standard hours for a workweek (40 hours) or more than the standard hours for a workday (8 hours). If an employee works more than 40 hours per week or 8 hours per day, he or she is entitled to overtime. Overtime is usually set at a rate of time and a half, which means the hourly pay rate with 50% of that rate added on top.
In some states, including California, employers can sometimes compensate employees with time off for overtime, instead of overtime pay.
When Can My Employer Substitute Time Off for Overtime Pay?
Time off can only be substituted for overtime pay under certain conditions. In California, it must be approved by a collective bargaining agreement. If the employee is not represented by a union, there must be a written agreement between the employer and employee which approves this type of compensation. The employee must also specifically request time off in lieu of overtime pay. The employer cannot impose it unilaterally.
Additionally, the compensation must come in the form of 1 ½ hours of time off for every hour worked, assuming the employer pays the legal minimum for overtime. If the employer provides a higher rate of pay for overtime (such as double time), the time off must be commensurate with that rate. So, if an employer provides double pay for overtime, they must provide 2 hours off for every hour of overtime worked. Another restriction is that the overtime that is being compensated with time off cannot exceed 240 hours.
Do I Need to Contact a Lawyer?
If you believe your employer is illegally substituting your overtime pay with time off, you should contact an employment attorney. An attorney will be able to tell you if the practice is legal in your state. It is best to talk to an experienced employment lawyer if you have any questions concerning your pay and work conditions in order to determine your best options.