Under both state and federal law, employers must pay non-exempt employees overtime, at a rate of 1.5 times their regular rate of pay, for all hours worked over 40 in a workweek. Many employers try to avoid this payment obligation by giving employees additional time off – known as “comp time” – in lieu of paying them overtime. This practice may not violate state and federal wage laws if the time off is provided to non-exempt employees in the same week in which the excess hours are worked. This practice most likely does violate state and federal wage laws if the time off is provided to non-exempt employees in the week following the week in which the excess hours are worked.
On May 2, 2017, the U.S. House passed the Working Families Flexibility Act which, if signed into law, would allow for the use of comp time. According to the Act, an employer could elect not to pay a non-exempt employee overtime for hours worked over 40 in a workweek and, instead, provide that employee with time off in a following week, paid at their regular rate of pay. As a result, employees receiving comp time would end up with less compensation but more time off.
Massachusetts tends to follow federal law on many – but not all – employment issues. If this Act become law, it is possible that Massachusetts would elect to adopt the practice of allowing employers to provide this type of comp time. It is also possible that Massachusetts would reject the Act and keep the current prohibition on the use of comp time outside of the workweek.
Employers should not provide comp time to their employees until the practice of doing so has been explained to an attorney and approved. The Massachusetts Wage Act provides for triple damages for wage violations, making the improper use of comp time very costly and risky.
If you’d like to discuss comp time, please let us know.