Comp Time, or Compensatory Time, is an alternate way of rewarding overtime work. Instead of paying an hourly employee time-and-a-half for work done over the time allotted in the normal work week, employers would allow an hour and a half of time off for each hour of overtime worked. This time could be used in emergencies, or scheduled for personal use. Comp time should not be confused with "flex-time." Flex-time allows employees to schedule their regular working hours in a way that accommodates their personal preferences and family commitments. Comp time strictly refers to compensation for overtime work.

Comp time programs are heavily restricted by federal regulations, so that employees are not unfairly prevented from receiving financial compensation. In fact, comp time arrangements are generally limited to public employers. Efforts have intensified in recent years—both at state and federal levels—to amend the Fair Labor Standards Act (FLSA) so that it would extend to private employers, but these efforts have been strongly opposed by organized labor. In May 2000, however, supporters of comp time were heartended by a Supreme Court decision that ruled that "nothing in the Fair Labor Standards Act prohibits a [local government] public employer from compelling the use of compensatory time" in lieu of overtime in paying employees. Supporters believe that this ruling is indicative that momentum is growing to extend comp time programs into private businesses.


Recent bills designed to extend comp time to the private sector provide for a system of comp time in which employers offer one and a half hours of paid time off for each hour of overtime worked. The movement to pass comp time legislation has been led primarily by Republicans, who argue that comp time will provide employees with greater freedom to schedule their work around family commitments. Supporters also contend that broadening use of comp time into the private sector will give a financial boost to businesses. But opposition is strong from the Democratic Party and labor unions. Primary reasons for contesting the use of comp time are questions over the actual scheduling of time off, and whether employees will be free to choose either comp time or payment in return for overtime work. Those opposing the bills suggest that employees in practice will not be allowed to freely schedule the use of their comp time, but will be restricted by employers. This would result in an option that is much less valuable to employees, limiting the prospect of "emergency" time, and restricting time off at certain points during the year. Concerns have also been expressed over possible pressure from businesses on employees to accept comp time over monetary compensation for overtime work, and whether voluntary overtime could be offered only in exchange for comp time. Finally, unions object to proposed comp time arrangements in which hours do not count toward pension benefits.


Some business experts believe that employers who do not offer large benefits packages, significant vacation time, or paid time off should seriously consider offering comp time as a kind of perk for employees. These observers contend that comp time can be a sensitive (and economical) way of rewarding employees for extra help at crunch times, especially since many workers have come to value time off even more than increased pay.

But small businesses, which may not be in a position to offer employees elaborate benefits, may also not be able to support a comp time system. Whether the system is regimented or informal, the small business may not be able to afford the lost productivity and additional paperwork involved in keeping track of comp time accrued and taken. There may also arise scheduling problems, especially for very small businesses that rely on only a few employees for their entire function. If a business is necessarily inflexible when it comes to scheduling time off, comp time may not be a valid alternative to regular overtime compensation.


Barlas, Stephen, "Timely Decision." Entrepreneur. July 1997.

Boyett, Joseph H., and Henry P. Conn, Workplace 2000. New York: Penguin, 1991.

"Comp Time Legislation," Entrepreneur. December 1997.

Employees: How to Find and Pay Them. U.S. Small Business Administration, n.a.

"Legalize Comp Time." Crain's Detroit Business. July 31,2000.

Walsh, David J. "The FLSA Comp Time Controversy: Fostering Flexibility or Diminishing Worker Rights?" Berkeley Journal of Employment and Labor Law. Summer 1999.

SEE ALSO: Flexible Employment

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