What is comp time at work? Comp time, short for compensatory time, is paid time off given to an employee instead of overtime pay for extra hours worked. Under the federal Fair Labor Standards Act (FLSA), only public-sector employers, such as state and local governments, can generally give comp time instead of overtime pay to non-exempt workers. Private employers usually must pay overtime in cash.
What does comp time mean at work?
Comp time means “you worked extra, so you get time off later.” For example, a city employee who works 6 overtime hours might bank 9 hours of comp time to use on a future day.
The rules depend on who your employer is and whether your job is exempt:
- Public employers (state and local government): may offer comp time to non-exempt employees in place of overtime pay, if there is an agreement or understanding in advance. Comp time must be earned at 1.5 hours for each overtime hour.
- Private employers: generally cannot give comp time instead of overtime pay to non-exempt employees. They can adjust a schedule within the same workweek so that total hours stay at or under 40.
- Exempt employees: are not owed overtime under the FLSA, so some employers offer informal comp time as a perk.
Federal government employees have their own comp time rules, and some states add their own requirements.
Comp time example
Jamie works for a county parks department and is non-exempt. One week, Jamie works 46 hours.
- Overtime hours: 46 − 40 = 6 hours
- Comp time earned: 6 × 1.5 = 9 hours of paid time off
For public-sector workers, the FLSA limits how much comp time can be banked: generally 240 hours, or 480 hours for public safety, emergency response and seasonal work. Hours above the cap must be paid as overtime.
Examples of comp time in emails and messages
Government HR policy: “Non-exempt employees may elect comp time at 1.5 hours per overtime hour, up to the maximum allowed.”
Employee email: “I’d like to use 8 hours of my comp time on Friday, March 14.”
Manager (private company, exempt team): “Thanks for working Saturday on the launch. Take Monday off as comp time.”
Payroll note: “Comp time balance: 22.5 hours.”
Comp time vs overtime pay
| Comp time | Overtime pay | |
|---|---|---|
| What you get | Paid time off later | Extra money on your paycheck |
| Rate (non-exempt, FLSA) | 1.5 hours off per overtime hour | 1.5× regular pay per overtime hour |
| Private employers | Generally not allowed instead of overtime for non-exempt staff | Required for non-exempt staff |
| Public employers | Allowed with an agreement | Allowed |
See also time and a half and OT on a paycheck.
How to handle comp time correctly
- Check your FLSA status. If you’re non-exempt at a private company, overtime pay is usually required.
- Get the policy in writing. Public-sector comp time needs an agreement or understanding before the work is done.
- Track your balance. Make sure banked hours show on your pay stub or HR portal.
- Ask about payout when leaving. Public employers generally must pay unused comp time when employment ends.
- Raise concerns early. If you’re offered comp time instead of overtime pay at a private job, ask HR or check with the Department of Labor.
Related terms
See more in our HR, Hiring and Leave hub.
FAQ
Is comp time legal for private employers?
Generally not as a replacement for overtime pay for non-exempt employees. Private employers usually must pay overtime in cash under the FLSA.
How is comp time calculated?
For eligible public-sector employees, comp time is earned at 1.5 hours for each hour of overtime worked.
Is there a limit on comp time?
For state and local government workers, the FLSA generally caps banked comp time at 240 hours, or 480 hours for public safety, emergency and seasonal roles.
Can exempt employees get comp time?
Yes, as an employer perk. Exempt employees aren’t owed overtime under the FLSA, so comp time for them is up to company policy.
Does unused comp time get paid out?
For public-sector employees, unused comp time is generally paid when employment ends. For informal comp time at private companies, it depends on policy and state law.
Sources
This article is general information, not legal or tax advice. Check with a qualified professional for your situation.
