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Are you losing overtime wages by accepting comp time?

On Behalf of | Oct 11, 2023 | Wage & Hour

Employees who work overtime are, in most cases, legally required to receive overtime pay. In Texas, this applies to any non-exempt workers who put in more than 40 hours per week. The 40-hour total is considered standard and anything else is overtime pay.

Usually, employers will just pay time-and-a-half for overtime hours. But this is not the only option they have under Texas law.

Accrual of comp time

Compensatory time, often referred to as “comp time,” is a practice used by some employers as an alternative to paying employees overtime wages when they work more than their regular hours in a workweek. Comp time translates to paid time off of work.

It’s important to note that comp time in lieu of overtime pay is subject to specific regulations and laws that vary by jurisdiction, including federal, state and local laws, and that government employees and union members may have additional rules which pertain to them. Instead of paying eligible employees time-and-a-half (1.5 times their regular hourly rate) for overtime hours worked, some employers offer employees the option to accrue comp time at a rate of 1.5 hours for each overtime hour worked.

What problems could occur?

Perhaps the biggest problem that occurs with comp time is that an employer may not honor the time-and-a-half rule. Instead, they may offer the worker exactly the same amount of time off that they already worked.

For instance, say that you worked for 44 hours one week. Your employer told you to take four extra hours off the next week, working 36 total. This balanced out to two 40-hour weeks, which is why the employer thought it made sense. But this setup means that you are not getting time-and-a-half. You’re being paid less than if your employer would have paid you overtime wages directly. If you worked an extra four hours, you deserve six hours off to make up for it – not four.

In fact, there are some employers who choose to offer comp time specifically because they realize that it means they can effectively pay an employee less money by offering one hour off for every overtime hour accrued. Intentionally or unintentionally, it’s a form of wage theft.

What should you do?

If you find yourself in this position, you need to know what legal options you have. Wage theft is illegal but it is also common, and there are key steps you’ll need to take moving forward to seek justice, reimbursement of the wages you’ve been wrongfully denied and a change in policy at your workplace. Seeking legal guidance can help you to gain this clarity.