Compensatory time, also known more commonly as comp time, is time non-exempt employees get as paid time off. It is often given to workers instead of overtime payment. This is frequently preferable to employers because they get to save money while offering employees paid time off for the time they would have been working. Understanding the difference between the two can give employees a better idea of what they can expect.
With flexible work schedules, employees may get comp time instead of overtime pay. Employers must approve the paid time off for salaried and per hour employees who are required to put in extra hours and who have more flexible work schedules. It’s important to note that compensatory time must be paid at the same rate as its counterpart. Generally, that is equivalent to one and a half hours for each hour the employee works. If an employer does not compensate its employees with the same rates, it is considered a violation of the Fair Labor Standard Act (FLSA).
Compensatory Time and Exempt Employees
As per the FLSA, employers in the private sector can only give employees compensatory time if it is used within the same pay period that overtime has occurred. The law varies depending on whether an employee is exempt or non-exempt. An employee is considered exempt or non-exempt depending on the specific duties of their job. In addition, employees who are exempt must use their compensatory time within 26 pay periods as it cannot be rolled over into the next year.
Compensatory Time and Non-Exempt Employees
Employees who are non-exempt under the FLSA are required to receive additional pay at the rate of one and a half times their usual pay for any and all hours they worked beyond their regular 40 hours of work per week. However, an employer who offers such employees the option of compensatory time or extra paid time off is illegal. This is because non-exempt employees are, by law, required to be paid time and a half for any extra hours they put in at work.
Employees who work for the state or another government agency can receive compensatory time if there is an agreement with a union or a contract that allows it between the employer and employee prior to the employee doing additional work. The rate of the comp time must also be the same as its counterpart at one and a half times the additional hours worked.
Even though some employees tend to prefer paid time off instead of additional pay when they work more than the legal 40 hours per week, employers should keep apprised of the employment laws so that they can avoid potential issues and stay within the legal scope. Additionally, it’s always important that employers know what their employees want and to take their wishes into consideration, given the legal aspects.
At the end of the day, being paid for working more than 40 hours in a week and compensatory paid time off are different things. It’s a good idea for employees, just like employers, to learn about them so they know what to expect if they are working exempt or non-exempt jobs.
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