Comp Time, Make Up Time. I often hear these used interchangeably. But in fact, they are two very different things, with very different rules, and managed by very different parts of the California labor code.
Both apply to dealing with California overtime. You remember our friend overtime. If an employee works more than 8 hours in a day, or 40 hours in a week, they must be paid time and a half for any additional hours. Well, it turns out, there are two situations where overtime pay might not apply.
Once is Compensatory or Comp Time, and the other is Make Up Time. And again, they are very different.
Comp Time is a provision of Labor Code 204.3 (and yes, I’m going to be that specific), and it’s basically time provided in lieu of overtime. So, Vicky works 3 hours of overtime on Wednesday. But instead of paying her 3 hours of overtime, you give her 3 hours of comp time.
Sounds simple right? One for the other – and hey, you don’t have to pay all that money for the extra time.
Well, of course it’s not that simple. To begin with, it’s not that straight forward.
Some of the rules around Comp time go like this:
First of all you need to have a written agreement with the employee. Now, that might be a collective bargaining agreement if you’re a union shop, of if you aren’t it might just be a stand along agreement or written policy both parties sign off on. In any event, you have to have one. And the employee has to specifically request comp time in writing.
“… you have to provide comp time at the same rate as you would pay overtime.”
OK, now we get to the good stuff.
As I said, it’s time provided in lieu of overtime, so you have to provide comp time at the same rate as you would pay overtime. So if you are giving someone comp time in lieu of one hour of overtime, then they are actually getting 1 and a half hours of comp time – because that’s the rate of overtime – 1.5.
Also comp time has to be paid out, at the one and a half rate, on termination. And in fact, under certain circumstances your employee can actually request that the time be paid out even outside termination.
Your employee can’t accrue more than 240 hours of comp time. And finally – comp time isn’t a thing at the Federal level. That means the Fail Labor Standards Act (or FLSA) doesn’t even recognize it. And the FLSA says you have to pay overtime for hours worked beyond 40 in a week.
So, in English – you might have a comp time provision. And you might provide it at the proper rate, and under the right circumstances. And the FLSA can still ding you for not paying overtime for more than 40 hours worked in a week.
Now, on to Make Up Time. I consider it, by far, the more friendly of the two options.
Again, it has it’s own Labor Code (513); and again it’s a California provision, and like Comp Time, you need a written policy or agreement.
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But, beyond that, things get a bit more manageable.
Think of Make Up Time this way. I’m working Monday through Friday, 8 hours each day. But on Friday, I have an appointment and need to leave 2 hours early. But I don’t want to use vacation time for those 2 hours, and I don’t’ want my pay docked. Enter Make Up Time. I can work 2 extra hours on Thursday to ‘make up’ the 2 hours I am losing on Friday. And my employer won’t have to pay me overtime for those 2 extra Thursday hours, because I’m working them under the Make Up Time guidelines.
Now yes, there are rules.
Make up time has to happen in the same workweek as the time off. It has to be my choice – my employer can’t make me use make up time vs. paying me overtime – but of course they could simply deny approval for overtime. Even if I’m working make up time, I can’t work more than 11 hours in a day or 40 hours in a week, without incurring overtime pay. And if something happens, and I work the extra hours on Thursday, but end up not going to my appointment on Friday – I still have to take those 2 Friday hours off. Otherwise my employer will owe me 2 hours of overtime for the week.
I hope this clears up the difference between make up time and comp time. And helps you figure out which one is best for you, or if you want to do it at all.