Introduction
When you earn paid time off instead of pay for overtime, this is known as compensatory time off, or comp time.
Four requirements must be fulfilled for full-time non-exempt workers in California to be eligible for comp time rather than overtime compensation:
- Comp time is permitted by an employment contract, collective bargaining agreement, or other formal arrangement signed prior to work performance.
- You haven’t accrued more than 240 hours of comp time.
- You have asked for comp time in writing instead of overtime compensation, and
- You have a regular job schedule that requires you to put in a minimum of 40 hours each week.
To clarify the comp day meaning, it refers to the paid time off you receive in exchange for working extra hours. Nonetheless, comp time plans for non-exempt workers of private businesses are typically prohibited by federal law. To circumvent this, you might be allowed to use your paid time off within the same workweek that you earned it.
You should speak with a California labor law attorney personally to ensure that your comp time structure does not violate any laws, as many businesses are only unaware of the regulations. To understand how it works, let’s dive into the comp day meaning, eligibility, and legal limits.
What is the maximum amount of comp time?
Every employee in California is limited to 240 hours of comp time. You are eligible for overtime pay for any more work you complete after you cross this threshold.
Comp time: How much is it?
One and a half hours of paid time off is equivalent to one hour of overtime. If overtime was paid at a greater rate, such as double time, subsequently, one hour of overtime would be equivalent to two hours of paid time off.
You can request that your accumulated comp time be used within a “reasonable time” after making the request.
Generally speaking, you can take out your accumulated comp time at your typical rate of pay after a minimum of two pay weeks. Upon termination, you are eligible to receive payment for the comp time at the greater of:
- Your three-year average normal pay rate or
- Your last regular pay rate
This is central to understanding comp day meaning: it’s not a one-to-one exchange—it provides additional value in terms of time off.
Why is comp time necessary?
When you put in more hours during the week at work, you can receive compensation in the form of comp time. You would get PTO (paid time off) to use in subsequent work weeks in lieu of the wage. It frequently takes the place of overtime compensation.
Example: Claire works as a clerk. She puts in 40 hours a week (on average). When a coworker calls in ill on Monday, Claire’s supervisor asks her to put in two more hours. Instead of getting compensated for the additional labor she did on Monday, Claire gets paid time off.
Comp time is commonly used by employers to:
- Cover unanticipated staffing shortages,
- Establish an adaptable work schedule, or
- Satisfy a rise in service demand.
From the employee’s perspective, the comp day meaning signifies a better work-life balance.
Does federal law differ?
Yes. For non-exempt workers of private companies, comp time is prohibited by the Fair Labor Standards Act.
Comp time may be paid to exempt full-time employees at private businesses in the form of “extra pay,” according to regulations issued by the U.S. DOL (Department of Labor). This extra pay may be given out in the following ways, depending on the number of hours worked over the typical workweek:
- A one-time payment,
- A bonus payout,
- Hourly rate in straight time,
- Overtime compensation in the form of time and a half, or
- Paid time off.
However, the FLSA permits public companies to provide comp time to their full-time employees at a minimum of 1.5 hours of paid time off per hour under specific circumstances.
Understanding the comp day meaning in the context of federal law helps avoid illegal employment practices.
What distinguishes make-up time from comp time?
Working additional hours in one workweek in return for paid time off in a subsequent workweek or payment period is known as comp time. Working extra hours a single day to make up for a missed workday previously in the week is known as “make-up time.”
Overtime regulations are not implicated because make-up time only reschedules working hours within the same week. Hours spent on makeup are compensated at the standard rate.
Make-up time is permitted in California if the three conditions listed below are met:
- Your request in writing for make-up time is approved by your supervisor.
- The same week that you missed your time, you complete your make-up time.
- If you work over eleven hours on a weekday or over forty hours in a workweek, you are paid overtime.
Notably, you have up to four weeks to ask for make-up time for ongoing commitments.