Human Resource Blog

Comp Time

Can a private company give an hourly employee the option to take comp time instead of paying him overtime? We are located in Pittsburgh, Pennsylvania.

If you literally mean comp time — paid time off in a different payroll week — then the answer is no. Both federal and Pennsylvania law require that you pay non-exempt (hourly) workers overtime when they work more than 40 hours in a single payroll week. An employee cannot sign away or negotiate away this right, any more than they can legally work for less than the minimum wage.

However, you can give the employee time off during the same payroll week, without penalty. Suppose Ted normally works 7 a.m. to 3 p.m. Monday through Friday, a total of 40 hours. One week he works until 11 p.m. on Monday, to finish a special project. By Thursday evening, Ted has already worked 40 hours in the payroll week.  If he works his usual shift on Friday, Ted will work 48 hours this payroll week and be entitled to 8 hours of overtime.

You could give Ted Friday off, instead of paying him for 8 hours of overtime. In fact, you could give Ted the option of taking any day off that payroll week — Tuesday, Wednesday, Thursday or Friday. (Or, you could require that Ted take a day off, and designate which one.) In that case, Ted would have worked only 40 hours in the payroll week, and not be entitled to overtime. This is not comp time — it is managing payroll.

Now take the example of hourly employee Cindy, who works the same schedule as Ted. Cindy works 16 hours on Monday, and still works her regular schedule the rest of the week. She works a total of 48 hours during the week. Under both Pennsylvania and federal law, Cindys employer must pay her for 8 hours of overtime. If the employer pays Cindy for 40 hours and promises to let her take 8 hours off (or 12 hours off) with pay during another payroll week, the employer is conspiring to violate the federal and Pennsylvania overtime laws. (This is true even if it is Cindys request that she take the time off in a different payroll week instead of being paid overtime.)

Cindys employer certainly can give her 8 or 12 hours off during a future payroll week. However, to avoid breaking the law, the employer must pay Cindy for the 48 hours she worked this payroll week (including 8 hours of overtime.) If Cindy works 32 hours during the next payroll week, taking time off because she worked extra hours this week, then she is paid for the time she actually worked.