FLSA: When you can legally offer comp time in lieu of cash overtime

by on August 13, 2010 · 18 Comments POSTED IN: HR Cafe
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Can you give nonexempt employees comp time instead of cash for overtime? Savvy HR practitioners know that the answer is usually “no.”

But there is an exception that may come in handy if your pay period is more than one week. What you can do: offset the extra hours within the same pay period in which they’re earned.

Example: Your normal pay period covers 80 hours over two weeks, and a nonexempt employee works 45 hours in the first week. You can give him comp time off as long as he takes it in the second week and doesn’t defer it outside the pay period.

Counts as time and a half
The comp time should be figured on a time-and-a-half basis, so the person works 32.5 hours in the second week and gets 7.5 hours as paid time off. If you give the person only five hours off in the second week, or if you allow her to accrue comp time for use later, you’ll be violating the FLSA.

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18 Comments on This Post

  1. Jdangelo
    August 13, 2010 - 1:34 pm

    I am surprised ths is legal since FLSA requests one use weekly periods in computing time.

  2. Jdangelo
    August 13, 2010 - 1:34 pm

    I am surprised ths is legal since FLSA requests one use weekly periods in computing time.

  3. Cindyhrms
    August 13, 2010 - 1:48 pm

    Does this transcend to California Labor Law? I was under the impression it does not.. thanks.

    • rliblogs
      August 13, 2010 - 2:41 pm

      Thanks for your comment. We can't respond to questions about specific
      situations or provide legal advice, but we invite other readers to post
      comments or responses to this question. We encourage you to seek guidance
      from your HR department or, for legal questions, consult an attorney.

      Michael Boyette
      Executive Editor
      Rapid Learning Institute
      PO Box A
      Morton, PA 19070

      mboyette@rapidlearninginstitute.com
      484-479-2715

  4. Cindyhrms
    August 13, 2010 - 1:48 pm

    Does this transcend to California Labor Law? I was under the impression it does not.. thanks.

    • rliblogs
      August 13, 2010 - 2:41 pm

      Thanks for your comment. We can't respond to questions about specific
      situations or provide legal advice, but we invite other readers to post
      comments or responses to this question. We encourage you to seek guidance
      from your HR department or, for legal questions, consult an attorney.

      Michael Boyette
      Executive Editor
      Rapid Learning Institute
      PO Box A
      Morton, PA 19070

      mboyette@rapidlearninginstitute.com
      484-479-2715

  5. Elzcdmsk
    August 13, 2010 - 2:43 pm

    Surprised as well. EVERY reference I have ever seen stipulates that overtime is calculated on a 'workweek' basis, regardless of the payperiod.

    • rliblogs
      August 13, 2010 - 2:43 pm

      Thanks for your comment. We can't respond to questions about specific
      situations or provide legal advice, but we invite other readers to post
      comments or responses to this question. We encourage you to seek guidance
      from your HR department or, for legal questions, consult an attorney.

      Michael Boyette
      Executive Editor
      Rapid Learning Institute
      PO Box A
      Morton, PA 19070

      mboyette@rapidlearninginstitute.com
      484-479-2715

  6. Elzcdmsk
    August 13, 2010 - 2:43 pm

    Surprised as well. EVERY reference I have ever seen stipulates that overtime is calculated on a 'workweek' basis, regardless of the payperiod.

    • rliblogs
      August 13, 2010 - 2:43 pm

      Thanks for your comment. We can't respond to questions about specific
      situations or provide legal advice, but we invite other readers to post
      comments or responses to this question. We encourage you to seek guidance
      from your HR department or, for legal questions, consult an attorney.

      Michael Boyette
      Executive Editor
      Rapid Learning Institute
      PO Box A
      Morton, PA 19070

      mboyette@rapidlearninginstitute.com
      484-479-2715

  7. Elzcdmsk
    August 16, 2010 - 5:27 pm

    unless you are referring to some form of Belo agreement, I’d still say don’t do it. Based on the wording of the article, it implies that employers with a ‘monthly’ pay period could do the same exception. Without knowing the legal code of what you’re referring to, I’d say don’t do it. It seems to be superceded by all other FLSA related statutes.

    I think what you may be getting at is the person is still getting paid the correct amount of overtime wages, in the form of paid time off, within the same pay period. Basically ‘calling’ the wages something else in the payroll coding. However, I can imagine this would cause more grief that it was worth if audited by the DOL, and the payroll records say PTO, rather than OT.

  8. Elzcdmsk
    August 16, 2010 - 5:27 pm

    unless you are referring to some form of Belo agreement, I’d still say don’t do it. Based on the wording of the article, it implies that employers with a ‘monthly’ pay period could do the same exception. Without knowing the legal code of what you’re referring to, I’d say don’t do it. It seems to be superceded by all other FLSA related statutes.

    I think what you may be getting at is the person is still getting paid the correct amount of overtime wages, in the form of paid time off, within the same pay period. Basically ‘calling’ the wages something else in the payroll coding. However, I can imagine this would cause more grief that it was worth if audited by the DOL, and the payroll records say PTO, rather than OT.

  9. Elzcdmsk
    August 16, 2010 - 1:27 pm

    unless you are referring to some form of Belo agreement, I'd still say don't do it. Based on the wording of the article, it implies that employers with a 'monthly' pay period could do the same exception. Without knowing the legal code of what you're referring to, I'd say don't do it. It seems to be superceded by all other FLSA related statutes.

    I think what you may be getting at is the person is still getting paid the correct amount of overtime wages, in the form of paid time off, within the same pay period. Basically 'calling' the wages something else in the payroll coding. However, I can imagine this would cause more grief that it was worth if audited by the DOL, and the payroll records say PTO, rather than OT.

  10. Elzcdmsk
    August 16, 2010 - 1:27 pm

    unless you are referring to some form of Belo agreement, I'd still say don't do it. Based on the wording of the article, it implies that employers with a 'monthly' pay period could do the same exception. Without knowing the legal code of what you're referring to, I'd say don't do it. It seems to be superceded by all other FLSA related statutes.

    I think what you may be getting at is the person is still getting paid the correct amount of overtime wages, in the form of paid time off, within the same pay period. Basically 'calling' the wages something else in the payroll coding. However, I can imagine this would cause more grief that it was worth if audited by the DOL, and the payroll records say PTO, rather than OT.

  11. Mboyette
    August 16, 2010 - 6:34 pm

    State and local government employers can offer straight, one hour for one hour, comp time under certain circumstances, but private employers never can. Private employers CAN offer comp time that amounts to time and a half in hours and doesn’t extend past the two-week pay period. See
    http://www.nolo.com/legal-encyclopedia/article-29979.html

  12. Mboyette
    August 16, 2010 - 6:34 pm

    State and local government employers can offer straight, one hour for one hour, comp time under certain circumstances, but private employers never can. Private employers CAN offer comp time that amounts to time and a half in hours and doesn’t extend past the two-week pay period. See
    http://www.nolo.com/legal-encyclopedia/article-29979.html

  13. Mboyette
    August 16, 2010 - 2:34 pm

    State and local government employers can offer straight, one hour for one hour, comp time under certain circumstances, but private employers never can. Private employers CAN offer comp time that amounts to time and a half in hours and doesn't extend past the two-week pay period. See
    http://www.nolo.com/legal-encyclopedia/article-

  14. Mboyette
    August 16, 2010 - 2:34 pm

    State and local government employers can offer straight, one hour for one hour, comp time under certain circumstances, but private employers never can. Private employers CAN offer comp time that amounts to time and a half in hours and doesn't extend past the two-week pay period. See
    http://www.nolo.com/legal-encyclopedia/article-

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