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Comp Time for Non-Exempt Salaried Employees

I am a new executive in a company. I have learned there has been a practice of ‘comping time’ for non exempt, salaried employees instead of getting paid overtime. Is this appropriate and/or allowed from a legal perspective?

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

Under the FLSA, employees are either non-exempt or exempt.

Non-exempt employees must be paid for all hours worked and are subject to overtime and minimum wage requirements prescribed by the FLSA. Conversely, exempt employees receive a fixed predetermined salary and are excluded from overtime pay provisions.

Salary and hourly paid are compensation terms. Though uncommon, a non-exempt employee can be paid a salary each workweek. The employee must still be paid for each and every hour worked and receive overtime pay for hours worked over 40 in a workweek.

Compensatory time or “comp time” refers to the practice of allowing an employee to take time off from work in lieu of additional compensation.

Non-exempt employees in the private sector must receive cash compensation for any and all hours worked. So, comp time is not permitted for non-exempt employees of private employers regardless of whether they’re paid on a salaried or hourly basis.

There is an exception for public agencies.

Under the FLSA, a public agency is defined to mean the Government of the United States; the government of a State or political subdivision thereof; any agency of the United States, a State, or a political subdivision of a State; or any interstate governmental agency. The public agency definition does not extend to private companies that are engaged in work activities normally performed by public employees.

Employees of state or local government agencies may receive compensatory time off, at a rate of not less than one and one-half hours for each overtime hour worked, instead of receiving overtime pay in cash. Law enforcement, fire protection, and emergency response personnel and employees engaged in seasonal activities may accrue up to 480 hours of comp time; all other state and local government employees may accrue up to 240 hours.

Instead of comp time, an employee’s schedule can be rearranged in the same workweek to avoid overtime, if this is the reason for offering comp time in the first place.


This entry was posted on Saturday, January 2nd, 2016 at 6:27 pm and is filed under
Compensation, Labor Laws.
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