Can a company insist that its non-exempt employees take paid time off rather than cash for working overtime?
A. Generally (and surprisingly), ‘comp time’ (compensatory time off given instead of overtime pay) is ILLEGAL under federal law. Under federal law, if employees work more than 40 hours in a work week, they must be PAID for overtime at time-and-a-half. This applies to all non-exempt employees in all states. Employers may give time off during the same week they work extra hours (e.g., work 10 on Monday, work only 6 on Tuesday), but as soon as they cross the ‘more than 40 hours in a week’ threshold, they’re entitled to overtime pay. Comp time is permitted within a single pay period (e.g., they might be able to take time off next week if they work overtime this week), but if it’s not in the same week, the comp time must be given at time-and-a-half (e.g., 1.5 hours of time off for every hour of overtime worked).
