No, the FLSA does not authorize compensatory time off in another workweek except in public employment and for a 14-day, 80-hour work period permitted for employees of hospital or residential care facilities.
Questions about compensatory time off are among the most recurring, perhaps because many employees would be amenable to this practice. However, legislative attempts to extend this practice beyond the public sector have failed. Opponents voice fears that some employers will place too many limits on when accumulated time may be used.
The FLSA contains three basic impediments to compensatory time off:
- Overtime pay must be calculated each workweek;
- Overtime earnings must be paid by cash or negotiable instrument; and
- Overtime earnings must be paid promptly.
“Promptly” means on the regular payday for the period during which the overtime occurred, or as soon thereafter as is reasonably possible.
Time-off plans and other options. Here are some steps management may consider to control overtime-pay liability:
- Grant time off during the same workweek, either before or after the long hours.
- Start the workweek on a day other than Monday when long hours follow a set pattern.
- Adopt a time-off plan, under which an hourly or salaried employee may work long hours one week, but short hours the next.
- Prepay anticipated overtime hours to keep wages constant.
- Adopt the fluctuating-hours method of calculating overtime for salaried workers who work irregular hours.
How does a time-off plan differ from the prohibited practice of averaging hours from one week to the next? Most importantly, the employer does not merely trade an extra hour in one week for one hour off at a later date. Time off in the short week must be at a rate of one and one-half hours for each overtime hour. In this aspect, it is the same as compensatory time off authorized for public employees. Other restrictions also apply.