Compensatory Time Might Not Be Legal

It is generally illegal to give employees straight comp time -- one hour off for every extra hour worked -- rather than overtime pay.

Some employers adopt a policy of giving their employees compensatory, or "comp," time -- an hour off at some later date for every extra hour worked -- instead of paying them overtime. But these policies are generally illegal under federal law, at least for private employers (state and local governments can offer comp time, in certain circumstances). The reason? They preclude employees from collecting an overtime premium -- the extra pay to which they are entitled for working more than a set number of hours.

(The overtime premium is 50% of the employee's usual hourly wage. So an employee who works overtime must be paid "time and a half," or the employee's usual hourly wage plus the 50% overtime premium, for every overtime hour worked.)

All of this means that if you wish to give your employees time off instead of money for extra hours worked, you cannot simply establish an hour-for-hour policy (that is, telling the employee to take an hour off for every hour of overtime worked).

Alternatives to Overtime

So what are the alternatives to simply paying the employee overtime? You may be able to rearrange an employee's schedule during a workweek to ensure that the employee does not work overtime. Under federal law, an employee works no more than 40 hours in a week has not worked overtime and is not entitled to overtime pay. So, for example, an employee who works four 10-hour days and then has three days off need not be paid overtime.

If your state has a daily overtime standard, this may not be possible unless the law explicitly allows you and your employees to agree on an alternative workweek. A daily overtime standard means that workers are entitled to overtime if they work more than a set number of hours in a day, even if they ultimately work fewer than 40 hours in a week. California, Colorado, and Connecticut are among the states that have a daily overtime standard. To find out the rules in your state, including whether you and your employees can arrange an alternative workweek schedule, contact your state labor department.

You can also adjust an employee's hours during a pay period so that the amount of the employee's paycheck remains constant. To make the math come out right, the employee must take an hour-and-a-half off for every extra hour worked. For example, if an employee who generally earns $1,600 every two weeks (or $20 an hour) works an extra 10 hours during the first week of the pay period, the employee is entitled to $300 in overtime pay -- 10 hours multiplied by one-and-a-half times the employee's hourly rate, or $30. If the employee took 15 hours off in the second week of the pay period, however, his or her paycheck would remain the same -- the employee would receive $300 in overtime pay, but would be docked $300 (15 hours multiplied by $20 an hour) for the time not worked.

To read and printout a copy of the Form please link below.

Documents to Show Your Attorney: Fair Labor Standards Act Defendant

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