BUILDING SUCCESSFUL BUSINESSES

Can you use comp time to avoid overtime pay?

| Jan 12, 2021 | Firm News

You need an employee to stay late one night. Your small company only has a few employees, but you got a big order near the end of the day. There’s just no other way to address it unless someone stays late. Fortunately, one of your employees is willing and agrees to work the extra hours.

You know those extra hours are going to put your employee into overtime, meaning they should get 1.5 times their regular rate. That’s going to make your operating costs go up, so you consider telling them to come in late another day — while still getting paid for the full day. The idea is to give them “comp time” that pays them back hour-for-hour for their extra work. Can you?

Accurate overtime payments

Generally, comp time is not allowed under the Fair Labor Standards Act or California Labor Code. This is a tactic employers may use to manage their overhead, but it’s important for you to understand that it breaks labor laws. To avoid a conflict, you just need to pay the employee their overtime rate.

Wage and hour cases

This is just one example of the way that wage and hour issues can crop up, showing why it’s so important to know exactly how the laws work. Be sure you are well aware of your legal rights if you are accused of violating those laws in any way.