- Blog post
FLSA: When you can legally offer comp time in lieu of cash overtime
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.