Compensatory Time

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Public employers are allowed to give an employee compensatory (“comp”) time off in lieu of cash payment for overtime worked.[1] Comp time accrues at the rate of one and one-half hours for each hour of overtime worked. A county may provide comp time instead of cash for overtime as long as an agreement or understanding with the employee (or a regular practice or policy in place prior to April 15, 1986) has been reached prior to the performance of the work.  The FLSA does not require a written agreement with each employee; a notice or written policy can be used.[2] Different agreements can be reached with different employees. The agreement may take the form of a condition of employment so long as the employee knowingly and voluntarily agrees to it as a condition of employment. A statement may be placed on the employment application advising applicants that the county gives compensatory time off in lieu of cash payment for overtime worked and stating that acceptance of employment with the county constitutes the employee’s agreement to accept comp time.

If a notice or written policy is used, an agreement or understanding will be presumed to exist for any employee who fails to express to the employer an unwillingness to accept comp time off in lieu of overtime pay. However, the employee’s decision must be freely made without coercion or pressure. An agreement can restrict the taking of comp time to only certain hours of work and can provide for the use of a combination cash payment and comp time so long as the time and one-half principle is followed. Further provisions concerning preservation, use and cashing out comp time can be included. The regulations governing comp time are found at 29 C.F.R. § 553.21 et seq.

Sample Compensatory Time Agreement

[1]  The regulations governing compensatory time are found at 29 C.F.R. § 553.20 et seq.

[2]  For public employers, state law requires either a written compensatory time policy or a statement that comp time is not allowed. T.C.A. § 5-23-104.