Q. I’ve heard conflicting answers: Is it legal for our company to pay our hourly employees comp time instead of paying time-and-a-half for overtime worked? — D.L, New Mexico
A. No. The federal overtime requires all to receive an overtime premium of one-half the regular rate of pay for all hours worked in excess of 40 in a given workweek.
To save on wages, some employers erroneously believe they can compensate overtime with comp time off. 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.
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