Compensatory ("Comp") Time Off"

“I have 3 exempt managers who work a lot of hours. I'd like to give them time off to compensate for those extra hours. How do I do this?”

Your?HR Survival Tip

You don't... at least not in California. California does not allow "comp" time for non-exempt (hourly) or exempt (salaried) employees.

If an employee is non-exempt, you absolutely must pay that employee for all time worked, including overtime. We have both daily and weekly overtime, rather than just the 40 hours per week most states follow.

Exempt employees have different rules. They agreed to certain responsibilities and tasks in exchange for a specific amount of pay. In theory, you don't care whether that employee can complete all their work in 30 hours or 60 hours each week. You look only at the performance and decide whether or not they are performing as expected and managing all their responsibilities. However, the job should be structured so the work can usually be completed if working 40 hours each week. You are paying for their skills, not for one person doing the work of two.

Generally, exempt employees do not track their time but it's not illegal to require a timecard. Comp time, however, isn't the purpose of exempts using timecards. Exempt time tracking is typically used by companies that have their accounting set up for job costing... they want to know how much of their payroll (and other costs) went toward each project. Any other reason needs a valid legal justification.

If you start tracking an exempt employee's hours and providing comp time for the extra hours they work, California is likely to believe you have converted that employee into a non-exempt employee. You never want to compensate them with time off for each extra hour worked. It's a legal disaster waiting to be discovered.

That's not to say you can never provide an extra day off to an exempt employee; just be careful how and when you do it. You don't want to be discriminatory nor do you want employees to expect it. Therefore, think of the time off as a special bonus for an effort "over and above" during a particularly busy time or for completing a special project that required unusually long hours. Make sure the cause was special before considering the time off. Even then, you can't reward them hour for hour.

Tell them you really appreciate their extra effort and to take Friday off. Don't use this for someone who is consistently putting in a lot of hours even when there's nothing special going on... this could just be a slow worker or a sign you need to adjust the amount of work they have if they can never keep up. This is not a replacement for a higher salary or a substitute for overworking your employees.

Rewarding someone who has put in a special effort is always appreciated by employees. However, think through your plan (or discuss it with us) to make sure it won't come back to bite you.