Tempting for employers, sought by some employees – but FLSA compliance can be very tricky!
Some employers wink at FLSA regulations by offering nonexempt workers comp time instead of overtime. Certain employees even prefer the flexibility over the extra income.
But make no mistake: The practice is illegal for private employers. All it takes is one disgruntled employee going to the DOL’s Wage and Hour Division, and your company could get hit with FLSA compliance violations and civil penalties.
Crafting a comp-time policy
FLSA regulations do provide a narrow exception for certain public employees. Interestingly, the comp-time guidelines that are carved out for this exception may come in handy for employers who are crafting paid-time-off (PTO) policies. While it’s illegal to swap comp time for overtime, it’s perfectly legal to offer comp time, PTO or flextime for hours worked under 40 in a workweek. The FLSA regulations:
- Give employees the right to use their comp time within a reasonable amount of time after they request it.
- Provide, upon termination, for employees to be paid for their unused comp time.
- Limit the amount of comp time an employee may earn.
Comp time, flextime and PTO can be powerful benefits for some employees – both exempt and non-exempt. Although you may not exchange PTO for overtime, you may want to consider these points for your organization’s current or future policies.
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