Can Employer Provide Comp Time Instead of Overtime Pay?

Employers sometimes attempt to avoid paying overtime to their workers by adopting a “comp time” plan.  Under such a system, the employer books extra hours as comp time instead of providing overtime pay.  Under the Fair Labor Standards Act, or FLSA, employers are required to pay their non-exempt employees at a rate of one-and-a-half times their regular rate of pay for each hour worked in excess of forty in any given week.  The FLSA does not allow employers to classify extra hours as comp time, and thus such a system constitutes a violation of the FLSA and entitles the workers subject to such a system to damages, including the overtime pay they were denied, liquidated damages and attorney’s fees.

Special rules allow state and governmental employers to utilize a comp time system in lieu of overtime.  Additionally, there is one limited exception to a private sector employer’s  prohibition on a comp time system.  The Department of Labor, in its Field Operations Handbook, describes a “time off” plan under which an employer may use a version of comp time within the same pay period. Under the DOL’s “time off” plan, if the employer has a two-week pay period, and an employee works 5 hours of overtime in week one, the employer could give the employee 5 hours of time off (“comp time”) in week two while paying the employee his or her regular salary for each workweek.  However, such plans only allow comp time to be given in the same pay period, and thus a “time off” plan is of limited utility and applicability.  Most “comp time” systems utilized by private employers are not limited to hours worked in the same pay period, and thus violate the DOL’s “time off” plan.

If you work for a non-governmental employer and your employer provides “comp time” rather than overtime pay for hours worked in excess of forty in a week, you should consult with an experienced overtime pay attorney so you can know and enforce your legal rights.  If you have questions about overtime pay, call Josh Borsellino at 817.908.9861 or 432.242.7118 or fill out this online form for a free consultation.