What Is Compensatory Time?

Compensatory time is an arrangement in which eligible employees are entitled to time off work in lieu of receiving overtime pay. In most cases, compensatory time is illegal because of a fear that employers will abuse it.

If your employer is not paying you overtime, but is instead giving you compensatory time, you may be able to pursue a claim against them.

The Fair Labor Standards Act (FLSA) is a federal law that was enacted to ensure employees are treated fairly. The FLSA establishes federal minimum wage and requires overtime pay when an employee works more than 40 hours during a workweek.

Of course, state laws could vary greatly. You will need to do your research to determine if compensatory time is permitted where you live.

If you are being given compensatory time in lieu of overtime, you will need to speak with an employment law attorney about pursuing a claim against your employer.

If compensatory time isn’t permitted and you were not paid your overtime, it could be considered wage theft and you may be eligible to pursue a claim against your employer.

Who Is Eligible For Compensatory Time?

Whether compensatory time is legal depends on if you are an exempt or non-exempt employee. You should also review federal and state laws, so you can determine if being offered compensatory time in lieu of overtime pay is illegal.

It also depends on whether the company is private or public. Federal law requires that all employees who are paid an hourly wage must be compensated for overtime at a rate of no less than one-and-a-half your regular hourly wage.

While it is not considered legal in the private sector, employees who work for state and federal governments can receive compensatory time when certain criteria are met.

If you are the employee of a state or federal government, you should review the details of your employee handbook or speak with a supervisor to learn more about the circumstances and when it is permissible.

When compensatory time is permitted, the employer may rearrange the worker’s schedule during a pay period to ensure he or she gets compensatory time off rather than overtime pay.

Compensatory time in lieu of overtime is only allowed if the following apply –

  • The compensatory time is taken during the same pay period as overtime did AND
  • The employee is compensated for the lost overtime premium by receiving an hour and a half for every hour of overtime he or she worked

Is Your Employer In Violation?

If you are not sure if your employer can offer compensatory time in lieu of overtime, you should consult with your supervisor or the company’s human resources (HR) representative for in-depth details about company policies and procedures.

You should also contact your state labor department to learn more about state laws where you work and whether compensatory time is legal for your employer.

Your state may have different methods for unpaid wages depending on the state laws. There could be different remedies to be awarded to those who are successful in proving an employer violated the laws.

You should maintain thorough documentation and supporting evidence, so you can show what happened, how it happened, and how much you are owed for the overtime you should have been paid.

Get a Free Case Evaluation 

If you are being offered compensatory time instead of overtime and you do not believe that is legal, you should speak with an employment law attorney in your area.

An employment law attorney will be familiar with the state and federal laws that apply to your situation. Your lawyer will be able to determine what laws were broken and if you were the victim of wage theft.

There are several different ways to recover unpaid wages, such as pursuing a claim with the Wage and Hour Division (WHD).

Your state’s Secretary of Labor may file a lawsuit against your employer for your back wages and for any additional penalties, which will be called liquidated damages.

Liquidated damages could be equal to the backpay that is owed – doubling the wages – if the employer willfully violated the law. When you meet with the lawyer, discuss the lawyer’s payment options.

Some attorneys will take cases on a continency basis, which means the lawyer will not be paid until you win your claim. Other attorneys will ask for a retainer to be paid in advance.

If you believe you are the victim of wage theft because of being offered compensatory time, complete the Free Case Evaluation Form on this page. 

Additional Resources