Q. Is it legal for my company to pay our hourly employees comp time instead of paying time-and-a-half for overtime worked?
A. No. Federal law requires all
To save on wages, some employers seek to provide overtime as comp time. In other words, instead of paying an employee time-and-a-half for overtime worked, the employee would be paid the regular straight-time rate, and receive an additional half-hour of paid time off to be banked and used in the future.
Under the Fair Labor Standards Act ( ), this practice is illegal for private employers. It interferes with employees’ rights to be paid their overtime premium. For state and local governments, the FLSA has a specific provision that allows for providing comp time in certain circumstances, such as where it is provided for in a collective-bargaining agreement or other agreement between the employer and employee.