Overtime pay can significantly drain construction budgets, especially when entire crews work over 40 hours per week. Some companies consider offering compensatory time (comp time) instead of paying overtime. Comp time provides paid time off rather than overtime wages. For example, an employee working 45 hours in one week could get 5 hours of PTO instead of 1.5x pay for those extra 5 hours. However, comp time is not a legal option for all employees.
Who is Eligible For Comp Time?
The Fair Labor Standards Act (FLSA) classifies employees into exempt and nonexempt. Nonexempt personnel are typically hourly and entitled to overtime pay and benefits. It would be illegal to provide comp time instead of overtime to nonexempt staff. Exempt employees are salaried and meet FLSA criteria waiving overtime entitlements. Comp time for exempt employees is at the company’s discretion.
Certain government workers like law enforcement and emergency responders can accrue limited comp time rather than overtime. State laws may provide additional guidance on eligibility. Offering comp time to nonexempt employees in lieu of owed overtime could prompt lawsuits for FLSA violations.
Do Salaried Employees Get Comp Time?
Whether salaried employees get comp time depends on their exemption status under the Fair Labor Standards Act (FLSA):
- Exempt salaried employees – Salaried employees who meet the criteria for being exempt from overtime pay under the FLSA (executive, administrative, professional, etc.) do not have a legal right to overtime compensation. Comp time for exempt salaried employees is optional for employers.
- Non-exempt salaried employees – Some salaried employees are classified as non-exempt under the FLSA if their duties do not meet the criteria for exemption. Non-exempt salaried employees are legally entitled to overtime pay for hours worked over 40 in a workweek. It would be illegal to provide comp time instead of overtime pay to non-exempt salaried employees.
Is Overtime the Same as Comp Time?
For eligible employees, companies often calculate one hour of comp time as equal to one overtime hour. Government guidelines say accrued comp time should be used within 26 pay periods.
If unused, nonexempt public sector staff must still receive overtime pay.
Comp time differs from flex time, which allows adjustable schedules without tying hours directly to overtime accrued. With proper overtime compensation, flex time can provide exempt employees more freedom over their hours.
Construction companies should closely review FLSA classifications and state laws before implementing comp time policies. Nonexempt staff cannot legally receive comp time instead of overtime pay. Careful compensation policies help avoid budget overages and potential lawsuits while supporting positive employee engagement.
Calculating Eligible Employee Comp Time
For employees qualified for comp time, companies often calculate one comp hour as equal to one overtime hour. Government guidelines state accrued comp time should be used within 26 pay periods for exempt and nonexempt public sector staff.
Unused comp time for nonexempt government workers must still be paid at overtime rates if the employee transfers agencies or after 26 pay periods.
Comp Time vs. Flex Time for Construction Companies
With proper overtime pay, construction companies can provide extra time off as a reward to exempt employees. But hour-for-hour comp time and the term “comp time” are cautioned against.
Comp time legally refers to non cash overtime pay for nonexempt government staff. Instead, flexible schedules without direct overtime ties, or “flex time,” is recommended.
Flex time gives employees more control over when and where they work, trusting them to make their own choices. It allows adjusting hours for personal needs while remaining engaged and productive. Flex time’s flexibility benefits companies through increased employee satisfaction and retention when implemented appropriately alongside fair compensation.
Summary – Salaried Employees and Comp Time
Whether comp time is an option for salaried employees depends on the employee’s duties and FLSA exemption status, not strictly their salaried status
- Exempt salaried employees may receive comp time at the employer’s discretion, since they have no mandatory right to overtime pay.
- Non-exempt salaried employees cannot receive comp time in place of owed overtime pay, as this would violate FLSA regulations.
Careful classification is important to ensure comp time policies comply with state and federal wage and hour laws.
