My employer wants us to accept Comp time instead of monetary payment for overtime worked. Is that legal?

Section 7 of the FLSA requires that covered, nonexempt employees receive not less than one and one-half times their regular rates of pay for hours worked in excess of the applicable maximum hours standards. However, section 7(o) of the Act provides an element of flexibility to State and local government employers and an element of choice to their employees or the representatives of their employees regarding compensation for statutory overtime hours. The exemption provided by this subsection authorizes a public agency which is a State, a political subdivision of a State, or an interstate governmental agency, to provide compensatory time off (with certain limitations, as provided in Sec. 553.21) in lieu of monetary overtime compensation that would otherwise be required under section 7. Compensatory time received by an employee in lieu of cash must be at the rate of not less than one and one-half hours of compensatory time for each hour of overtime work, just as the monetary rate for overtime is calculated at the rate of not less than one and one-half times the regular rate of pay.

Under 29 CFR 553.21, Section 7(o), “Employees of a public agency which is a State, a political subdivision of a State, or an interstate governmental agency may receive, in accordance with this subsection and in lieu of overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required by this section.”

In order for the governmental agency to be able to provide comp time instead of monetary compensation, there must be an agreement, memorandum of understanding, or any other agreement between the public agency and representatives of such employees, or an agreement or understanding arrived at between the employer and employee before the performance of the work.

If the work of an employee for which compensatory time may be provided included work in a public safety activity, an emergency response activity, or a seasonal activity, the employee engaged in such work may accrue not more than 480 hours of compensatory time for hours worked after April 15, 1986. If such work was any other work, the employee engaged in such work may accrue not more than 240 hours of compensatory time for hours worked after April 15, 1986. Any such employee who, after April 15, 1986, has accrued 480 or 240 hours, as the case may be, of compensatory time off shall, for additional overtime hours of work, be paid overtime compensation.

An employee shall have the option to “cash out” comp time. If compensation is paid to an employee for accrued compensatory time off, such compensation shall be paid at the regular rate earned by the employee at the time the employee receives such payment.

An employee who has accrued compensatory time off authorized to be provided under paragraph (1) shall, upon termination of employment, be paid for the unused compensatory time at a rate of compensation not less than the average regular rate received by such employee during the last 3 years of the employee’s employment, or the final regular rate received by such employee, whichever is higher.

Compensatory time is an option to overtime payment only available in the public sector. On February 10, 2009, Congresswoman Cathy McMorris Rodgers (R-Washington) again introduced the Family Friendly Workplace Act, which, if it had passed, would amend the Fair Labor Standards Act (FLSA) and authorize private employers to provide compensatory (or “comp”) time off in lieu of overtime pay. For almost 20 years, the public sector has been using comp time, and for many public employees, it’s a very popular option. In fact, it seems that several private employers mistakenly believe they can implement similar policies in their own workplace. However, the Family Friendly Workplace Act failed to pass into law, and as a result, private employers that use comp time are violating the FLSA.

Do you have questions about compensatory time, if you are entitled or required to accept it and what your rights are if you have accepted comp time? You need the help of an experienced attorney to guide you through the maze of overtime law. You need  attorneys like those at Dan Newlin & Partners. Our firm is made up of aggressive, experienced attorneys who have helped thousands of clients through difficult and complex legal issue and he would be honored to put that experience to work for you. Call us today at (407) 888-8000. The call and the advice are free.