Tuesday, January 13, 2009

Do you know? “Comp” time in lieu of overtime

Do you know? Unless you are a state or local government, it is illegal to provide “comp” time in lieu of time-and-a-half for hours worked in excess of 40 in a work week.

Federal law requires that all non-exempt employees receive an overtime premium of one-half the regular rate of pay for all hours worked in excess of 40 in a given work week. To save on wages, some employers seek to provide overtime as “comp” time to employees. In other words, instead of paying an employee time-and-a-half for overtime worked, the employee would be paid the regular straight time rate, and receive an additional half-hour of paid time off to be banked and used in the future. Under the FLSA, this practice is illegal for private employers. It interferes with employees’ right to be paid their overtime premium.

For state and local governments, the FLSA has a specific provision that allows for the payment of comp time in certain circumstances, such as where it is provided for in a collective bargaining agreement or other agreement between the employer and employee.

For most employers, though, implementing a comp time program to skirt overtime obligations is a huge wage and hour no-no.