When is Compensatory Time Off Allowed?
Q. We have a nonexempt employee who sent an e-mail requesting time off in lieu of pay for overtime hours he already worked. Are we allowed to grant his request?
A. Under Section 7 of the Fair Labor Standards Act (FLSA), all covered nonexempt employees receive not less than one-and-one-half times their regular rates of pay for hours worked in excess of 40 hours per week. The only exception allowing compensatory time off in lieu of cash overtime compensation is for public employees. Public employees include those that work for a public agency, a state agency or a political subdivision of a state.
An additional condition of receiving compensatory time is an agreement or understanding reached prior to the performance of work. Such an agreement or understanding under the FLSA includes collective bargaining agreements, memoranda of understanding (MOU) or any other agreement between the public agency and representatives of the employee, or, in certain circumstances, between the public agency and an individual employee. The agreement or MOU may be oral or written and may provide for any combination of compensatory time off and overtime payment in cash, provided that the time-and-one-half requirement is maintained. The agreement may also include additional provisions related to the preservation, use, or “cashing out” of compensatory time consistent with the FLSA.
Considering these FLSA requirements, the company is not allowed to grant the request. Even if your company were to be determined a public sector employer, the request would not be adequate because the employee is requesting the time off subsequent to working the overtime hours and without an agreement in place. You are safe to deny the employee’s request.
Jason R. Mau is an attorney in the Boise office of Parsons Behle & Latimer. To discuss this or other related matters, call 208-562-4898 or send an email to jmau@parsonsbehle.com.
