Compensatory time off, commonly known as comp time, is an alternative to receiving extra wages for additional hours worked. This concept is particularly relevant in California, where state law allows full-time non-exempt employees to opt for comp time instead of overtime pay under certain conditions.
Read on to learn more. If you need help from an employment law attorney, contact PLBH at (800) 435-7542 for a free legal consultation.
Criteria for Comp Time Eligibility
To be eligible for comp time in California, four key conditions must be satisfied:
- There must be a prior agreement, like a collective bargaining agreement or a written contract, authorizing comp time before the work is performed.
- Employees cannot accumulate more than 240 hours of comp time.
- A written request from the employee is required, indicating their preference for comp time over overtime pay.
- The employee must be regularly scheduled to work a minimum of 40 hours per week.
Maximum Accumulation and Rate of Comp Time
California sets a cap of 240 hours on the accumulation of comp time for employees. Once this limit is reached, any additional work should be compensated with overtime wages. Moreover, all comp time must be compensated at least at 1.5 times the regular pay rate. If the work qualifies for a higher rate, such as double time, then comp time should reflect that higher rate.
Upon termination, employees are entitled to compensation for unused comp time. The payout rate will be the higher of the employee’s average regular rate over the last three years or their final regular rate.
The Purpose and Benefits of Comp Time
Comp time serves as a wage replacement mechanism for extra work hours. Instead of receiving additional wages, employees earn paid time off (PTO) to be utilized later. This arrangement is often preferred by employees seeking a better work-life balance and by employers needing to manage unforeseen staffing shortages, flexible schedules, or increased demand without incurring overtime expenses.
For instance, if an employee like Claire works extra hours to cover a colleague’s absence, she can opt for comp time, gaining PTO instead of immediate wage payment.
Differences with Federal Law
The federal Fair Labor Standards Act (FLSA) prohibits private employers from offering comp time to non-exempt employees. However, it does permit full-time exempt employees at private companies to receive additional compensation for hours worked beyond the standard workweek. This compensation can come in various forms, such as bonuses, flat sums, or paid time off.
Public employers, on the other hand, are allowed to offer comp time to full-time employees under specific conditions set by the FLSA.
Comp Time vs. Make-Up Time
It’s important to distinguish comp time from make-up time. Comp time involves working extra hours in one week in exchange for PTO in a subsequent week or pay period. Make-up time, however, allows employees to work additional hours on one day to compensate for missed time earlier in the same week, without triggering overtime rules. These hours are paid at the regular rate.
In California, make-up time is permitted when the employer approves a written request, the make-up time occurs in the same week as the missed time, and overtime is paid if total hours exceed 11 in a day or 40 in a week. Employees can request make-up time for recurring obligations up to four weeks in advance.
Do you have questions about the legality of your work situation? You can work with an employment law attorney by calling PLBH at (800) 435-7542.