Comp Time and the New Overtime Rules

As employers consider changing employees from salaried to hourly to comply with the higher salary level requirement in the new overtime rule, they should be mindful of the proper and improper uses of comp time. The FLSA permits comp time when it is taken in the same week as the extra hours worked.  The following example demonstrates a permissible use of comp time under the FLSA:

An employee, regularly scheduled to work 9-5, Monday through Friday, works until 8 on Wednesday. Her employer may reduce the employee’s hours on Friday to 9-2, so that the employee stays at 40 total hours for that week.

In this example, the comp time is taken in the same week as the hours worked outside the employee’s normal schedule – no overtime compensation is necessary because the employee stayed at 40 hours worked for the week.

An employer may not use comp time to avoid paying overtime when comp time is taken in a different week, even if that week is in the same pay period. Therefore, an employee who works 42 hours one week, and 38 hours the next week is still entitled to overtime for the two extra hours worked in week one even though he worked less than 40 hours the following week, regardless of whether both weeks are in the same pay period.  Employers should review their comp time policies and the actual practices of their employees and supervisors to make sure that comp time is taken in the same week that extra hours are worked.

The attorneys at Nauman Smith can help you understand how the new overtime rules apply to your employees, and we will continue to keep you informed with practical information on how to comply with the new rules.