Wenatchee Valley Business World




The latest extended forecast from The Weather Channel

Remove this weather forecast

Overtime versus compensatory time: What are the options?

Send to Kindle
Print This

Most employers know that most workers, who are paid an hourly wage and work more than 40 hours in a seven-day work week, must be paid overtime at time and one half the employee’s regular rate of pay.

While there are some jobs that do not require payment of overtime (i.e., executive, administrative, professional, computer professionals and outside sales, along with workers employed on farms or ranches, or in any agricultural or horticultural business that packs or delivers to market such products; newspaper vendors or carriers; causal labor in or about private residences; public elective or appointive offices and a host of other job categories), the vast majority of non-exempt employees are entitled to be paid overtime if those employees work more than 40 hours in a work week.

Employees cannot waive their right to overtime and a union cannot bargain an agreement allowing for the waiver of overtime. However, many employers and employees alike are receptive to receiving compensatory time (“comp time”) in lieu of overtime.

Comp time is a concept that employers like to use to allow employees, who work overtime in one week, to take time compensating time off in a future workweek. It has been used where employers wish to compensate an employee for overtime with time off, or where an employee wishes to build up some time so that the employee can have paid time off, such as for vacation or where the employee has run out of paid sick leave.

Many employers and employees find the use of comp time to be mutually beneficial; however, while Washington State law allows an employee to request comp time; federal law does not allow for comp time, except for public sector employees. 

The Washington Minimum Wage Act (“MWA”) has a statement to the effect that any wages, hours, or other working conditions, which are more favorable to employees, shall control. While there is not any case law directly on point, the general consensus is that it is unlikely a Washington court would consider comp time “more favorable to employees”; thus, Washington state private employers cannot currently offer their employees a comp time option.

Federal does allow public sector employers to offer comp time options, such as for law enforcement and firefighters, which are govern by a myriad of detailed federal and state regulations, which are beyond the scope of this article.

One additional caution. Employers need to be careful in allowing comp time for traditionally exempt employees (executive, professional, administrative, outside sales and computer professionals). If not handled correctly, providing comp time for exempt employees could violate the salary portion of the test for exempt status. Exempt employees usually are expected to work whatever hours necessary to get their jobs done, which implies those employees have the flexibility to take some hours off from time to time, especially if those employees have been putting in a lot of extra hours.

On the other hand, Washington employers can offer a flex time option. Flex time is an arrangement that allows an employee to work longer hours on certain days and take equivalent time off later in the work week. With flex time, an employer does not incur an overtime obligation as long as the non-exempt employee does not work a total of more than 40 hours in a work week.

In May, the U.S. House of Representatives passed the “Working Families Flexibility Act”, which amends the Fair Labor Standards Act to would allow private employers to offer a comp time option for their employees. The bill is currently being considered by the U.S. Senate; however, its passage is uncertain as there is significant opposition in the Senate.

While awaiting the outcome of this new legislation, employers should:

  • Review existing pay and overtime policies to ensure compliance with both federal and state law.
  • If comp time policy is in place (public sector employers), be sure to track comp time accurately. Make sure there is a clear definition of the “work week”, especially if some employees work on weekends (i.e. does the workweek start at 12:01 on Sunday or Monday?).
  • If comp time is allowed for exempt employees, be aware that how it is accrued and used could be a factor in determining whether employees are paid on a salaried basis, one of the factors necessary to validate exempt status.
  • If you have questions about comp time or exempt/non exempt status., contact an employment law attorney knowledgeable in this area, as this area of the law is constantly changing.

Gil Sparks has over 29 years of experience in employment and labor law. He is Of Counsel (part-time) with the law firm of Ogden Murphy Wallace and can be reached at either gsparks@omwlaw.com or 509-662-1954, when he not either fly fishing or on long distance bicycle rides in the Northwest.