Q & A: How should we go about granting comp time?

Q: We have a comp-time policy, but we’re encountering some pushback from employees. They believe that any time worked over eight hours qualifies for comp time. How should we determine the threshold for comp-time eligibility? Additionally, if a task is listed in an employee’s job description but is only performed once a year (such as conducting an audit), would it still be considered a “special project” for comp-time purposes?—K.C, Virginia

A: There are several definitions of compensatory time. One type refers to the idea of having nonexempt, hourly employees work more than 40 hours per week but receive future paid time off for those hours rather than having those hours be paid at time-and-a-half.

For example, an hourly worker might receive $10 per hour and regularly work 40 hours per week. If they work an additional 10 hours that week, they would ordinarily be paid $400 for the first 40 hours and then an additional $150 for the extra 10 hours (10 hours at $15 per hour). That’s what is required under the Fair Labor Standards Act.

If the employer were to pay just for the 40 regular hours and provide the employee a 15-hour credit towards future time off, the employer might believe it was legitimately providing comp time. There’s just one big problem with this arrangement: It is illegal under the FLSA for all but a specific set of employers—namely public employers. Even then, there are strict limits on how the arrangement is set up, how much comp time can accrue and when it must be paid out if not used.

There is another definition of comp time that applies to exempt employees who are not ordinarily entitled to overtime pay—in other words, exempt employees. Employers may provide them with comp time off if they choose, but they are not required to. Because exempt workers can be made to work as long and as hard as necessary to get their work done, they sometimes work more than 40 hours per week. Their employer is free to reward them for working long hours and can do so with comp time.

The employer then sets the rules defining when they will grant comp time and how they will calculate how much leave to provide. The terms are up to the employer since there is no legal requirement to provide comp time for exempt workers.

The most common approach is to focus on special events that require extra work, but not to regularly provide comp time whenever an exempt worker works more than eight hours per day or 40 hours per week.

Employers that don’t have a written exempt-employee comp-time policy and would like to implement one may want to consult their attorneys to draft one.