When is comp time paid

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Subscribe When you are ready to subscribe click here. Sign in with Sign in with. Compensatory time: Commonly referred to as comp time, this is paid time off given to an employee in lieu of overtime pay.

Understanding state law The legal requirements of each state also factor into what options might be available to you as an employee or as the employer. Offer flexibility in work schedules There are ways for you to both clear the legal hurdles and provide your employees with options that give them the freedom to achieve a healthy work-life balance.

Define your rules and stick to them Though often popular with employees, there are potential shortcomings for the government agencies able to offer comp time. Downsides of comp time include: If comp time is offered regularly, employees may come to expect it every time they work overtime. It can lead to wage and hour claims and disputes over whether employees are truly exempt or non-exempt.

Some employees may take advantage of the offering and work overtime unnecessarily so they can get a day off in the future. If an employee has saved up a lot of comp time and then leaves the company, do you need to pay for those banked hours? The takeaway Your leadership team needs to ensure that a clear and concise policy is in place outlining the attendance expectations of their employees.

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But the following conditions must be met: An agreement is arranged with union reps, if applicable. Employee and employer must agree to the comp time before the extra hours are accrued not after!

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. Back wages and liquidated damages twice the amount of back wages owed.

Legal fees for employees if a lawsuit is successfully prosecuted. One downside to offering comp time is that it can lead to disputes with employees, particularly around whether they are truly exempt or non-exempt. Another challenge is managing expectations around comp time.

Employees may come to expect comp time whenever they work overtime, and could put in extra hours unnecessarily in order to get those days off. What it comes down to? Having a solid comp time policy is essential, both for your business and for your employees. It ensures fairness and transparency in offering this option for compensating overtime hours, as well as promotes a healthy company culture. Make sure employees and new hires receive this policy in writing.

If your employees are given a choice between comp time and overtime pay, which one will they choose? Employees deciding between the two, might consider:. Encourage your staff to discuss any questions with you, so they can be confident they're making a fully informed decision, and to seek the help of tax and HR professionals if they have further questions.

You can offer comp time instead of overtime pay to your employees if:. Even if your employees prefer and ask for comp time instead of overtime pay, you are not legally allowed to provide them with it in situations different than the ones listed above. Handling payroll for your team can be a daunting task, and properly using overtime pay and comp time make it an even more challenging one.

Luckily, Hourly , a time tracking and payroll platform, can help. You can see a full overview of hours worked by each employee and the salary that is due to them so you can successfully run your business. Icon Created with Sketch. Workers Comp Great coverage with serious savings.

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Pricing Reviews. Blog About Case Studies Careers. Get Started. Is Comp Time Legal? Private vs Public Sector Employees While using comp time in the private sector is not permitted for non-exempt employees, the practice is legal and more common in the public sector.