Compensatory time, or “comp time,” is an alternative to overtime pay where employees receive paid time off instead of extra wages for overtime hours worked. But, not so fast. While this may seem like a useful tool for managing labor costs and scheduling, its legality depends on the type of business and the classification of employees. Employers must understand the rules before offering comp time to avoid legal issues. The legality of comp time depends on whether an employer operates in the public or private sector: Public-Sector Employers: Under certain prescribed conditions, employees of state and local government agencies are…
