skip navigation

Overtime Work: Time Off or Additional Pay?

June 14, 2019 by Paul Sullivan
Category: Fair Labor Standards Act

Overtime Work: Time Off or Additional Pay?

If a utility clerk works 43 hours one week because other employees are sick, normally he or she must be paid three hours of “overtime” at a rate not less than one and a half times regular pay. The extra pay might be good for the employee’s bank account but, for the local government, overtime pay may be financially crippling in a tight budget year. However, there is an alternative way to compensate public sector employees for overtime work: if agreed to, an employee can take additional time off work (compensatory or “comp” time) instead of being given additional pay.

This blog reviews some of the requirements for the award and use of compensatory time.

The Basics of Overtime

Per RCW 49.46.130(1), the normal workweek for most employees is 40 hours. For some employees, though, such as police officers and firefighters, the work period is calculated in a different manner based upon the number of hours worked during a consecutive 28-day period. See RCW 49.46.130(5).

The pay for overtime hours, those worked over the normal work period, is not less than one and a half times the employee’s regular rate of pay—see RCW 49.46.130(1)—though some employment contracts provide for payment of double or even triple the normal rate of pay in certain circumstances. Overtime is calculated upon any excess hours worked over a whole work period, not for any extra hours worked on a particular day. For example, if an employee’s normal work day is eight hours, working ten hours one day will not necessarily result in overtime pay. However, if the employee works 42 hours during the same workweek, he or she would then qualify for two hours of overtime.

Compensatory Time

An employee of a public agency may request compensatory time off work instead of being paid for the hours worked over 40 hours during a workweek, but before an employee can earn compensatory time, there must be an agreement made between the employee and the employing agency that allows the accrual (29 CFR 553.20).

Compensatory time accumulates at a rate not less than one and a half hours of compensatory time for each hour of overtime worked (29 CFR 663.22), and there is a limit on the number of hours an employee may accumulate: 240 hours for most employees and 480 hours if the employee works in a public safety, emergency response, or a seasonal assignment (29 CFR 553.21).  

Compensatory time requires an agreement

A public agency may provide for compensatory time to its employees only if the use has been agreed to under a collective bargaining agreement, employment agreement, or memorandum of understanding. Per 29 U.S.C 207(o)(2)(A), the agreement can be made in one of three ways:

  • through negotiation with individual employees;
  • through negotiation with employees' representatives; or
  • through negotiation with a recognized collective bargaining agent.

Operation of the agreement

Even if there is an agreement allowing the substitution of compensatory time for overtime pay, the employee may nevertheless later decline compensatory time and require payment for the overtime hours. Section 29 CFR 553.23(c)(1) requires that agreeing to accept compensatory time “must be made freely and without coercion or pressure.”

An employee wishing to use accrued compensatory time hours must be allowed to do so within a “reasonable period” after making the request, provided the request will not “unduly disrupt” the operations of the agency. Mere inconvenience is not enough to deny use. To turn down a request, 29 CFR 553.25 requires the employer must:

reasonably and in good faith anticipate that it would impose an unreasonable burden on the agency’s ability to provide services of acceptable quality and quantity for the public during the time requested.

Both the employer and the employee may later request the compensatory time balance be paid in cash

Even after compensatory time has been accumulated, an employer may nevertheless pay an employee cash for the accumulated time. 29 CFR 553.26 provides that if there is a payment, the employee may still request compensatory time for future overtime work.

Similarly, even if an employee has requested compensatory time, he or she may later require a payment in cash. Payment is calculated at the rate of pay in effect at the time of the request, not the rate that existed when the compensatory time was earned. When an employee terminates employment, the rate of payout is the average regular rate of pay during the employee’s last three years of employment or the regular rate received by the employee, whichever is higher (29 CFR 553.27).

Compensatory time can be good for an employee who wishes more time away from work and, if he or she later chooses, unused compensatory time can be converted into a cash payment. Compensatory time can also be good for the employer as it allows giving an employee time off instead of paying cash, and that could be important in a tight budget year.

The various issues surrounding the award of use of compensatory time give employers and employees a lot to think about. Whether compensatory time should be allowed or taken is a policy decision, both for the employee and for the employer. 

MRSC is a private nonprofit organization serving local governments in Washington State. Eligible government agencies in Washington State may use our free, one-on-one Ask MRSC service to get answers to legal, policy, or financial questions.

About Paul Sullivan

Paul worked with many local governments and authored numerous MRSC publications on local elections, ordinances, and general local government operations in his many years at MRSC. He is now retired.



Blog Archives


Follow Our Blog