Many employees request time off instead of pay when they work overtime or are scheduled to work extra days including weekends, and you may be quick to oblige their wishes in an effort to be responsive to their desires. After all, compensatory time off – or “comp time” – seems like a natural fit for workers looking for work-life balance. And with labor shortages leading to increased workloads, overworked employees often want more time off. But even though California public policy has addressed the issue of work-scheduling flexibility in an attempt to address wage-hour issues, a comp time system that trades time for wages essentially runs afoul of federal law, at least in the private sector. This Insight provides California employers with an overview of the issue and some suggested options.
Compensatory Time for Non-Exempt Employees in Private Sector: Nice Try, But Generally Unworkable.
Under Section 204.3 of the California Labor Code, employers are permitted to offer comp time, subject to strict conditions, to non-exempt employees governed by certain state Wage Orders. Among other things, such employees “may receive, in lieu of overtime compensation,” comp time “at a rate of not less than one and one-half hours for each hour of employment for which overtime compensation is required by law,” or at the employee’s regular rate, if higher.
A number of requirements apply, however, in order for the system to pass muster. These include:
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