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Global Work Glossary

Lost in a maze of global employment jargon? Find your way out with our handy collection of work and HR terminology

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Compensatory Time Off

What is Compensatory Time Off?

Compensatory time off, often referred to as “comp time,” is a flexible arrangement where employees are granted time off instead of overtime pay. This practice is commonly used in public sector jobs and allows employees to accumulate hours worked beyond their scheduled work times, which they can then use as paid leave at a later date.

Function and Usage

The primary function of compensatory time off is to provide an alternative to monetary overtime compensation. It offers a cost-effective solution for employers, particularly in government or nonprofit settings where budget constraints are significant. For employees, it provides the flexibility to balance work and personal commitments by choosing time off instead of extra pay.

Benefits and Considerations

One of the main benefits of compensatory time off is its role in promoting work-life balance. Employees can use comp time to extend vacations, manage personal affairs, or simply take a break, which can lead to increased job satisfaction and reduced burnout. However, managing compensatory time requires careful planning to ensure that it doesn’t disrupt organizational operations or lead to staffing shortages.

Policy and Regulation

Effective management of compensatory time off is crucial and must align with local labour laws and organizational policies. In the United States, for instance, the use of comp time is regulated under the Fair Labor Standards Act (FLSA), which sets limits on accrual and usage for eligible employees. Employers must maintain accurate records of comp time earned and used to ensure compliance and fairness.

Compensatory time off is a beneficial arrangement that can help organizations manage labour costs while offering employees greater flexibility. By understanding and adhering to relevant regulations, employers can successfully implement comp time as a valuable component of their compensation strategy.

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