Compensatory Time Off

What is Compensatory Time Off?

Compensatory time off, also called comp time, is an optional method of compensating workers who put in extra hours. For example, instead of paying time and a half in overtime pay, a company with a compensatory time off policy will pay employees in the form of paid time off (PTO). In other words, a worker may be eligible for paid vacation time rather than overtime pay.

Why Compensatory Time Off Matters

According to the number of hours worked, PTO is typically awarded for compensatory time off. Employers should have a precise, thorough system to track collected comp time hours. If a company doesn’t give workers the necessary time off, they risk being sued.