Under the Fair Standards Labor Act, employees of State or local government agencies may receive compensatory time off or Comp time, at a rate of not less than one and one-half hours for each overtime hour worked, instead of cash overtime pay. Comp time is not offered to all employees at public agencies. Usually any comp time arrangement must be established pursuant to a written agreement, mutual understanding, or any other agreement between the public agency and the employee.
Who Can Receive Comp Time?
Comp time can only be given to nonexempt employees in the public sector and cannot be given to nonexempt employees at a private, non-governmental business. When employees work extra hours, Employers of a private own business might want to give them extra time off instead of paying them any wages. This is known as comp time and it is illegal in many situations in which private own businesses use it as a compensation method to give time off to their 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.
Illegal Use Of Comp Time
For example, let’s say a private business have a nonexempt employee who works 56 hours in a workweek. Instead of paying 16 hours’ worth of overtime wages to the employee, they are given comp time the week after. In this case, the Employer violated FLSA comp time laws. The employee should have been paid overtime wages for the extra 16 hours worked to remain in compliance with FLSA compensatory time off rules.
In most cases, Employers have to pay overtime wages to their employees when they work overtime hours. Let’s say an employee whose regular hourly rate of pay is $10. For overtime wages, the hourly overtime rate is $15 ($10 X 1.5). If that employee works 10 hours of overtime in a workweek, you would owe the employee $150 for the extra time worked.
Comp time is mostly illegal to prevent private owned businesses from overworking their employees. Comp time laws ensure employees are fairly compensated for the work they do. Comp time cannot even be given if it is mutually agreed to. The use of comp time instead of overtime is limited by Section 7(o) of the FLSA to a public agency that is a state, a political subdivision of a state, or an interstate governmental agency.
An employment lawyer can assist you further with a claim if you believe your employer has illegal used comp time to compensate you instead of paying you proper overtime compensation for hours worked above 40 in one week.