“Comp Time” in California – What is it and how does it work?

Compensatory time off, or comp time, is when you receive paid time off rather than wages for extra hours worked.

In California, all full-time non-exempt employees can receive comp time in lieu of overtime pay under state law. However, 4 conditions must be met:

1. comp time is authorized by a collective bargaining agreement, the employment contract, or some other written agreement entered into before the performance of the work,
2. you have not accumulated comp time in excess of 240 hours,
3. you have requested, in writing, comp time in lieu of overtime pay, and
4. you are regularly scheduled to work at least 40 hours in a work week.¹

What is the cap on comp time?

California’s cap on comp time for all employees is 240 hours. If you have reached this amount, you are entitled to an overtime wage for subsequent work performed.²

How much is comp time?

All comp time has to be paid at least at 1.5 times your regular rate of pay in California. If the hour of work was entitled to a higher rate, like double time, you are entitled to that amount in comp time.

You can cash out your comp time, but at your regular rate of pay. At termination, you are entitled to financial compensation for your comp time at the higher of:

• your average regular rate of pay for the last 3 years, or
• your final regular rate of pay.³

What is the point of comp time?

Comp time is a wage replacement option when you work extra hours during the work week. Rather than the wage, you would receive paid time off (PTO) to be used during later work weeks. It is often used to replace overtime pay.

For example: Claire is a town clerk. She usually works 40 hours per week. On Monday, a coworker calls out sick and Claire’s boss asks her to work 2 extra hours. In exchange for the extra work on Monday, Claire receives paid time off rather than wages.

Employers frequently use comp time to:

• fill unforeseen staffing gaps,
• create a flexible work schedule, or
• meet an increased demand for services.

Employees may prefer comp time to working overtime at a higher hourly rate in order to get a better work-life balance.

Is federal law different?

Yes. The federal Fair Labor Standards Act (FLSA) forbids comp time for non-exempt employees of private employers.

Regulations promulgated by the U.S. Department of Labor (DOL) state that comp time can be paid to full-time exempt employees at private employers in the form of “additional compensation.” That additional compensation can be based on hours worked beyond the normal work week and paid out as:

• a flat sum payment,
• a bonus payment,
• straight-time hourly wage,
• time-and-a-half pay for overtime hours, or
• paid time off.

Meanwhile, the FLSA allows public employers to pay their full-time workers with comp time under certain conditions.⁴

How is comp time different from make-up time?

Comp time is working extra hours one week in exchange for PTO in a later week or pay period. Make-up time is working extra hours one day to cover for an absence earlier in the week.

Because make-up time merely shifts around working hours in the same week, it does not implicate overtime rules. Make-up hours are paid at your regular rate of pay.

In California, make-up time is allowed if the following three things are true:

1. Your boss signs off on your written request for make-up time;
2. You do your make-up time on the same week where you missed your time;
3. You get overtime pay if you end up working more than 11 hours in a workday or more than 40 hours in a workweek.

Note that you can request make-up time for recurring obligations up to four weeks in advance.⁵

Additional resources

For more information, refer to the following:

• Keeping Track of Comp Time is a Full-Time Job – Labor Law Journal.
• Work Hours, Wages, and Vacation Leave – ILR Review.
• Exemptions from the overtime laws – Official website of the California Department of Industrial Relations (DIR).
• What is an Exempt Employee in California? – Simple explanation by a popular hiring firm.
• How to file a wage claim – Instructions provided by the California Labor Commissioner.

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Legal References