Local governments may adopt policies to provide compensatory or “comp” time to employees. Public employers are allowed to provide compensatory time off in lieu of paid overtime. Employers are not required to provide a comp time option for employees, but it is an available alternative. The Fair Labor Standards Act (FLSA) provides a cap on comp time which may be accumulated by employees. The cap for employees in public safety activities is 480 hours of comp time, and for all other employees, the cap is limited to 240 hours. Local governments may place a lower cap on accrued comp time if desired.
Exempt employees are not eligible for overtime pay but may be provided a comp time option. The Washington State Public Employer Overtime Guide has the following to say on the subject:
Comp time for exempt personnel: Many Washington employers have formal or informal policies of paying comp time to exempt personnel. As a basic matter, an employer is free to set any terms concerning accrual and use of comp time for employees not covered by the FLSA . . . . The Ninth Circuit, the Department of Labor and the Washington Supreme Court (interpreting the Washington Minimum Wage Act) have all concluded that comp time on top of salary is legal.
Public employers' authority to set their own terms governing the payment of comp time to exempt employees, as stated above, appears to stem from 29 C.F.R. §§ 553.28(c), (d), and (e). Generally, the FLSA, at 29 U.S.C. § 207(o), limits the amount of comp time that non-exempt employees can be given. However, FLSA exempt employees are not subject to these limitations because the FLSA does not provide for exempt employee comp time. Instead, pursuant to 29 C.F.R. § 553.28(c), exempt employee comp time would likely be considered to be "other" compensatory time, because it is accrued pursuant to a policy adopted by the employer, rather than from a provision of the FLSA. Specifically, C.F.R. § 553.28(e) states that:
The requirements of section 7(o) [i.e., 29 U.S.C. § 207(o)] of the FLSA, including the limitations on accrued compensatory time, do not apply to "other" compensatory time as described above.
So a public employer is free to set its own procedure governing comp time given to exempt employees. Once adopted, any such procedure should be clearly outlined in the employer's personnel policy. It also appears that comp time for exempt employees can be posted on an hour-for-hour basis. 29 C.F.R. § 553.28(d) states as follows:
The FLSA does not require that the rate at which "other" compensatory time is earned has to be at a rate of one and one-half hours for each hour of employment. The rate at which "other" compensatory time is earned may be some lesser or greater multiple of the rate or the straight-time rate itself.
Public employers may provide compensatory time off in lieu of paid overtime. Employers are not required to provide a comp time option for employees, but it is an available alternative. Under both federal and state law, an employee cannot be required to accept comp time rather than overtime pay but may choose to do so. An employee may choose, with the employer’s agreement, to take comp time rather than overtime pay, but the employer may not require it.
Limits may be placed on the number of hours of comp time accumulated and the time by which it must be used. A sampling of comp time restrictions from other cities shows that 40 hours is a common limit on accumulated time. The range is from 24 to 160 hours. Limits on the time period for the use of comp time (or overtime is paid instead) include 30 days, 60 days, 12 months, and within the same pay period.
For more information including a section explaining comp time, here is a link to MRSC’s webpage Overtime and Comp Time. Here is a link to Washington State Labor & Industries Overtime webpage, where there is a section about “comp time,” also called “exchange time,” which states:
Only public employees are eligible for time off instead of being paid overtime under federal law. This is commonly known as “comp time” or “exchange time.” This time off must be credited at the rate of at least 1.5 hours of time off for each hour of overtime worked. An employer may not require a worker to take comp or exchange time - it is at the worker’s request. Private employers cannot enter into these agreements.