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. With labor shortages leading to increased workloads, overworked employees often want more time off.

But even though California public policy has addressed work-scheduling flexibility, a comp time system that trades time for wages essentially runs afoul of federal law, at least in the private sector.

Under the California Labor Code, employers are permitted to offer comp time to non-exempt employees governed by certain state wage orders. 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:

• Having a written request from an employee.
• Keeping required records that accurately reflect compensating time earned and used.
• Limiting the maximum amount of hours that may be accrued.
• An employee's right to request a cash payment in lieu of the time off.
• The obligation to pay accrued but unused comp time upon termination.
  

The kicker is that, in addition to...

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