Dealing with Comp Time: Compensatory Time Implications and Practices

One of the benefits your municipality may offer is the ability for employees to earn compensatory (comp) time off. But anyone who’s ever been involved with the comp time process pretty quickly understands that there is a lot of grey area about how it should be managed, especially when working with non-exempt staff.

For hourly, or non-exempt staff, comp time can be an alternative to overtime pay. But here are a few considerations you need to understand before issuing comp time.

What qualifies as comp time?

According to the Fair Labor Standards Act (FLSA), compensatory, or comp time, is time off as paid time away from the job. It is accrued when an employee uses the compensatory time off in lieu of overtime pay. The payout is at minimum one and a half hours of comp time for every one overtime hour worked.

Who qualifies for comp time?

According to FLSA, government agencies may legally offer comp time to non-exempt employees in place of overtime pay. Private employers are not eligible to use comp time.

What considerations should be made by the employer regarding comp time payout?

It is strongly suggested that municipalities establish a written policy for comp time which includes the following considerations:

  • Who may use comp time in place of overtime pay?
  • How many comp time hours can be accumulated by an employee in a fiscal year (often 40-80 hours per year per employee)?
  • When will an employee be switched from receiving comp time to receiving overtime pay?
  • What is the appropriate process for requesting comp time?
  • When can comp time be used, and what is the official process for requesting comp time off?
  • What will be done with comp time hours not used by the end of the fiscal year?
  • Which should be used first—comp time hours of paid time off (vacation pay)?

In addition to comp time for non-exempt employees, some municipalities also offer comp time to exempt staff, although it is not a requirement under the FLSA and requires an entirely new set of policies.

When considering whether or not to allow employees to earn comp time, it is important to consider the impact of comp time on the most important people who could be impacted: your customers. It is also important to consider the impact of comp time on the employer and employees alike, as well as the implications the practice will have between different jobs and employee classifications. It can get complicated fairly quickly! Although, if you have Black Mountain Software’s Payroll software, tracking and managing comp time can be made easier.

At a minimum, when offering compensatory time, FLSA rules must be followed and a written policy that answers the list of questions above must be in place. If your local government office doesn’t have a written policy for comp time, ask your state’s municipal clerk association or colleagues from other cities to share their policy with you to help you get started.

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