What is comp time and how does it work?
Comp time, or compensatory time off, is time off you give employees for working overtime hours instead of paying time-and-a-half overtime wages. Overtime hours are typically any hours an employee works beyond 40 hours in a week. You cannot offer comp time to all employees.
Is comp time illegal?
The reason comp time is prohibited under federal law is that it allows an employer to get out of paying an employee overtime as required under the FLSA. Put simply, unless your employer’s “comp time” policy adheres to the “time off plan”, it is illegal.
Which is better comp time or overtime?
Workers are never better off under comp time than overtime—and they are typically worse off. The bill would allow private sector employers to offer comp time at time-and-a-half in lieu of overtime pay when an employee works more than 40 hours in a week.
How is comp time calculated?
For example, if you skip your 30 minute lunch for 4 days in a week that you work at least 40 hours, you will earn 3 hours of comp time for the 2 hours extra you worked (2 hours overtime * 1.5 = 3 hours compensatory time).
Who is eligible for comp time?
In short, salaried employees can receive comp time if they work for the public sector, are classified as non-exempt, and work beyond 40 hours per week.
Can comp time be taken away?
The general rule is that accrued compensatory time off must be liquidated (i.e., paid) or forfeited (as applicable under agency policies) if not used by the end of the 26th pay period after the pay period during which it was earned.
What happens to comp time when you quit?
According to federal law, the majority of employees cannot accrue more than 240 hours of comp time. If an employee resigns and has not used their comp time, the employer must pay them out when they leave the job.
Can hourly employees get comp time?
Comp time must be avoided when you consider hourly employees who must be paid for every hour worked. Comp time is usually not provided to exempt employees who are expected to contribute a whole job worked no matter the number of hours the employee works in this pursuit.
Can an employer give you comp time instead of overtime?
Employers may give comp time in place of regularly scheduled overtime work only for employees who must work overtime hours under flexible work schedules. Additionally, comp time may be approved instead of overtime pay for irregular or occasional overtime work.
How long is comp time good for?
Compensatory time off in lieu of overtime generally must be used within 26 pay periods. If you are an FLSA exempt employee and you don’t use your comp time within those limits, you will lose it unless you were unable to do so because of circumstances beyond your control.
Is comp time paid at time and a half?
Comp time must be given at a rate of time and half. In other words, if Mary works 10 hours of overtime, she is entitled to 15 hours of compensatory time off. The comp time must be taken during the same pay period that the extra hours were worked.
Is comp time taxed?
When comp time accrues automatically like vacation and in accordance with the applicable FLSA rules, there is no taxation or taxable event until the employee takes the comp time or has her comp time cashed out upon termination of employment.
What is the difference between comp time and flex time?
Comp time should not be confused with “flex–time.” Flex–time allows employees to schedule their regular working hours in a way that accommodates their personal preferences and family commitments. Comp time strictly refers to compensation for overtime work.