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Can a Business Offer Comp Time Instead of Overtime?

On Behalf of | Nov 30, 2022 | Employment Law |

When employees are being paid an hourly rate, that rate changes if they work overtime. They’re supposed to be paid time and a half. For example, a worker who makes $20 an hour normally would make $30 an hour for every hour of overtime. This only impacts the extra hours, not those worked previously.

However, some businesses prefer to offer time off. This is referred to as comp time. In fact, some have claimed that workers even prefer comp time. If someone works an extra eight hours one week, rather than taking eight hours of overtime pay, they could take a day off the next week. But are businesses allowed to do this?

Time and A Half Must Be Maintained

In some cases, businesses may use comp time illegally, so it’s important for business owners and employers to understand how it is supposed to work. But one of the main things to keep in mind is that comp time that has been offered legally must be paid out at time and a half, just like overtime pay.

In the example above, a worker who put in an extra eight hours was then given eight hours off. But this would actually be a violation of their rights because they should be given 12 hours off. When comp time is used to allow businesses to pay less, that’s a problem for the workers and can lead to disputes.

It Has to Be Discussed in Advance

Another thing to note is that workers and their employers need to talk about using comp time prior to the worker putting in that time. If someone believes that they are doing extra work because they want that time-and-a-half compensation, it is unfair to tell them after the fact that they are only going to be given extra time off. They may not have wanted that time off and would not have performed the extra service in exchange for it. Everyone has to be on the same page from the beginning.

What if A Dispute Arises?

Even when businesses attempt to follow the rules and use comp time properly, disputes do occur. All involved need to know what legal steps to take.