Compensatory time off is a component of the federal Fair Labor Standards Act (FLSA) as a means of compensation for overtime which is available to public employers.
- Only benefits-eligible, non-exempt employees can accrue up to 120 hours of compensatory time.
- Non-exempt, non-benefit-eligible employees are not eligible to receive compensatory time for hours worked in excess of 40 hours each work week, but must be compensated in at one and one-half times their regular hourly rate.
- Exempt employees – those who are “exempt” by law from receiving overtime – are not eligible to accrue compensatory time. Managers may offer flexible working hours when exempt employees work an excessive number of hours.
Maximum hours of compensatory time
Unless authorized by Human Resources, employees should not exceed 120 hours of accumulated compensatory time. After a classified staff employee has accrued 120 hours of compensatory time, all subsequent overtime hours worked should be compensated in cash.
Human Resources will provide a warning notice when a compensatory balance exceeds 90 hours.
Accurate record keeping of overtime hours worked and compensatory time credited on bi-weekly time sheets is mandatory. Department administrators shall be responsible for assuring that compensatory time balances do not become excessive.
Tracking and Using compensatory time
Accrued compensatory time should be used within the same month it is accrued, whenever possible. Compensatory time can be tracked through LOUIE Time & Labor. When using compensatory time, employees must fill out the online time sheet through LOUIE Time and Labor and obtain prior approval from their supervisor.
Compensatory time at termination
Upon termination from university service or change in eligibility status, unused compensatory time shall be paid to non-exempt employees in accordance with the Fair Labor Standards Act (FLSA).
Any compensatory time balance should be paid at the employee’s most recent non-exempt rate of pay to the employee upon:
- change of status from non-exempt to exempt
Determining compensable time
In order to determine compensable time for non-exempt employees, there are many different factors that must be reviewed, such as:
- What job duties are outlined in the employee’s job description?
- What is the primary function of the position?
- Does the employee have a regular schedule or do they work a flexible schedule?
- Is there time spent waiting?
- If so, is it used for work or non-work activities?
Rest and meal periods
Employees must be paid for rest breaks less than 30 minutes, but longer duration breaks (generally one hour or more) are not considered hours worked if the employee is “completely relieved of duties for the purpose of eating regular meals.”
Examples of rest and meal periods Accordion Closed
A researcher in the field eats lunch while reviewing notes. This would likely be considered compensable time since she is not completely relieved of duties.
A researcher in the field stops and eats a meal while talking with others or reading a book for pleasure. Since these are not work activities, this time would not be compensable.
Employees in California
You must ensure that they are being given the opportunity for rest breaks and meal breaks regularly.
If you have an employee who works in any state other than Arizona, review information about working out of state.
Idle time/waiting time
Waiting time that is not for the benefit of the employer is not compensable work. The idle/waiting time must be required (being engaged to work) rather than optional (waiting to be engaged).
Examples of idle time/waiting time Accordion Closed
A researcher in the field can only observe a particular animal early in the morning and late in the day, which leaves the middle of the day open. If they are not doing other work at this time and are free to engage in any activity (such as taking a nap), then the time would not be compensable (waiting to engage).
A computer specialist who must stay at their desk to await a call, but is allowed to use the time to do homework for a class would be compensated (engaged to wait).
Generally, travel time for non-exempt employees will be considered compensable.
Learn more about compensating travel.