Dispelling the 10 Biggest Wage and Hour Myths: Part VII
Wage and Hour Myth #7
Employees who prefer time off instead of overtime can be given compensatory time off in lieu of overtime pay. Although many employees may prefer time off in lieu of overtime pay, such a practice is illegal in the private sector. There is no such thing as compensatory time off in the private sector. While public sector employers are able to substitute compensatory time off for overtime pay, private sector employers cannot. Consequently, an employee who works 8 hours of overtime this week cannot be given time off with pay for 8 or 12 hours next week. The employee must be paid for the overtime hours. Work schedules can be manipulated in the same work week in order to avoid overtime pay (i.e., Monday through Thursday, the employee works 36 hours; the employer can instruct the employee to work only 4 hours on Friday to avoid overtime). Overtime earned in week 1 cannot be erased in week 2 by providing compensatory time off. Please note that the FLSA does permit employers to adopt Time Off Plans, however, these plans are very difficult to administer and, in many situations, will not eliminate overtime liability.
Check back tomorrow for Wage and Hour Myth #8.