Can my employees accrue compensatory time off (comp time) instead of being paid overtime?

HRCalifornia

Generally, no. Private employers generally are not permitted to offer compensatory time off (CTO) to nonexempt employees in lieu of paying overtime.

A very limited exception applies to employers who are not subject to the federal Fair Labor Standards Act but are covered under Wage Orders 2, 4, 6, 7, 9, 11, 12 or 15.

Public employees may use CTO, but they do not have the absolute right to decide when it will be used, according to a 2000 decision the United States Supreme Court.

Read more about Compensatory Time Off in the HR Library.

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