Is Compensatory Time Legal In The Private Sector Workplace?

Posted by: Brookside Admin

For those in the public workforce, compensatory time (or comp time as it’s commonly called) is an everyday thing. Yet for those in the private sector, comp time is not something that is permissible according to the Department of Labor. Some employers still offer comp time however, which has led some to ask is it legal to offer compensatory time in the private sector workplace?

While “comp time” itself is not permitted in the private sector, the use of “time-off plans” are acceptable for nonexempt employees in both the public and private sector. These types of time off plans are similar to comp time; however, the main difference is that the time off is taken in the same pay period. Traditional comp time plans allow employees to save up comp time and take it at a later date, even during different pay periods.

There are conditions that go along with these time off plans. The Department of Labor has ruled that these time off plans are only allowed during the following conditions:

Overtime Conditions

If an employee has worked over 40 hours, then the time off has to be given at time and one-half as well for anything that is worked over the 40 hours. The employee must also take their time off during the same pay period that the overtime occurred.

For example, if an employee works 60 hours (40 regular hours and 20 overtime hours) for the first week of a pay period, then they are entitled to take off 30 hours during the next week. This is calculated at 20 hours multiplied by time and a half to get the 30 hours. The employee would then get their normal salary for those two weeks, with no overtime for the first week.

If a company provides time off in lieu of overtime pay, then the time off has to be provided to the employee at time and a half, not just the amount equal to what the employee worked.

Some state laws may not allow this type of compensation arrangement. If you are unsure about a comp time or time off policy where you work, contact our offices for a free consultation with an experienced Tulsa employment attorney. (918) 582-2500

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