Accurate Time Tracking Is So Much Easier With Workyard
Ensuring the satisfaction of the workers and benefits for the employees can sometimes be very challenging. Some workers love to be paid for all the extra hours they’ve worked while others prefer some free personal compensatory time.
Comp time is a way to compensate your salaried workers for all the extra hours they’re ve done in a week with some free time. While comp time might sound amazing for both employers and the employees there are certain limitations you need to know about.
If a worker has a regular working week but because of the accumulated tasks or major projects they stay later than usual they might accumulate a few extra hours that week. Usually, this would mean the employer has to compensate the mentioned employee and in some cases, this can be reimbursed as compensatory time off.
The free time to spend with family, resting, or focusing on hobbies has shown amazing results in productivity and some workers even prefer comp time over additional money. This can create a healthy work-personal life balance and improve the satisfaction and retention of employees.
But, there are a few things you need to consider before granting any comp time, so keep on reading to find out more.
Calculation of comp time is very straightforward, all you have to do is consider the number of hours worked over time and multiply that by 1.5. It’s very similar to calculations you might do when you need to pay time and a half, but it’s even easier because there are fewer rules and state-based variations.
So, to calculate the compensation time off for an exempt employee you need to take the number of extra hours in the week, let’s say the employee stayed 2 hours every day from Monday to Thursday and that would add up to 8 extra hours.
8 x 1.5 = 12
The comp time would be 12 hours of paid time off (PTO)
In some cases, the employees can receive overtime pay or choose to have the accrued comp time instead of overtime pay. But, keep in mind that compensatory time is not always allowed and you need to be careful to follow the state and government rules and regulations.
Comp time is a great tool to compensate salaried employees, but it’s not always legal or recommended to use it.
Just like many other compensation rules like overtime, there are federal rules provided by the FLSA (Fair Labor Standards Act) and additional state rules that might apply to comp time.
The FLSA makes a difference between exempt and non-exempt workers and regulates their ability to be compensated for the extra hours worked. Depending on the private or state sector and some additional rules provided by individual states only a hand full of salaried employees are entitled to legal comp time.
Here are the two different groups of employees to consider before implementing compensatory time:
Exempt employees are often salaried employees and/or often occupy specific management positions in companies. Overtime pay is not required by FLSA for exempt employees.
However, exempt employees can receive comp time in lieu of overtime pay.
This is great news for exempt employees working in the government sector, such as EMTs or fire protection, as they can use the overtime compensatory time to focus on rest and private life, and avoid burnout and employee transfers.
They might not need the extra money but free time is greatly appreciated and one of the best ways to ensure you keep all of the high-quality staff you have.
On the other hand, non-exempt employees (usually hourly-based workers) are always entitled to paid overtime and minimum wage. The FLSA ensures that workers who are usually working on an hourly basis get paid for working overtime by federal law for every given week.
Non-exempt employees can’t be compensated when they work overtime hours with some free time, as they are not eligible for comp time in the private sector.
So, even in cases where the employees are insisting on compensatory time instead of overtime pay you need to make sure it’s legally allowed in your state of residency.
In addition to major differences between exempt and non-exempt employees and their right to comp time, there is also the question of public and private companies and the different rules and regulations that apply.
As a general rule companies in the private sector are not allowed to use compensatory time for non-exempt workers. But, keep in mind that some states allow private sector companies to use comp time for workers that are not under the protection of the FLSA.
The rules are often too complicated to understand and the best thing you can do is contact the union representatives or consult with HR professionals.
Public sector employees such as the ones working in government agencies are allowed to use the compensation time in lieu of overtime pay. Even in some rare cases where such employees are considered hourly or non-exempt, they can be rewarded with comp time, but there are some rules and regulations.
Here are the government rules you need to know about if you want to use compensatory time instead of paying overtime:
It’s very important to emphasize the importance of regulation of work overtime and ensure the employee receives the compensation required and allowed in government agencies.
While many confuse the terms overtime pay and compensatory time, they are two different types of employee compensation.
It’s not easy to say which one is better considering there are certain rules and regulations that limit access to comp time in the first place, and there is always the added factor of worker satisfaction.
In most cases, the general rule is to use overtime for non-exempt workers and comp time for exempt workers. If you are still unsure, always check the state law and even consult professionals to see what is legally required.
Remember, under the FSLA the non-exempt employees have to receive minimum wage and be paid for every hour the employee works overtime. Tracking and calculating overtime pay accurately can be challenging, to save time and ensure compliance invest in using time tracking software.
If there is an option to offer comp time off it might be a great motivation for workers who appreciate a balanced lifestyle and prefer some accrued compensatory time rather than receiving overtime pay.
So, in conclusion, the overtime hours worked are best compensated with overtime pay for non-exempt employees, and with compensatory time for exempt working force.
Comp time might sound easy to understand and implement but the stats show that it is often used illegally.
Private employers can face significant penalties for the illegal use of comp time. In some states, the private sector businesses are allowed to pay comp time instead of overtime rate, but you need to make sure you are following all the regulations.
This is why comp time is not to be taken lightly, and you need to make sure to follow all the rules mentioned above if you decide to compensate accrued comp time.
Here are the official penalties that can be enforced if you don’t follow the overtime laws and federal laws:
Overtime pay and comp time are very well regulated and it’s mostly limited to preventing overworking employees and allowing a fair and comfortable working environment.
To ensure you are accurately tracking comp time, you need to implement a time tracking solution.
Compensating employees for occasional overtime work sounds simple enough but if you own a private business, have many employees, and want to ensure you accurately calculate the overtime and compensatory time you should be using a time tracking solution.
A GPS time clock app helps you automatically capture every worker’s start time, break time and end time for every shift and automatically calculates the total hours worked including the overtime component. In addition, if you have unsupervised workers in the field, GPS tracking helps you avoid disputes and provides an accurate view of exactly where the employee was throughout their shift.
Did you find this post helpful? Please rate it!
In this article, we cover how to calculate overtime pay, which employees are entitled to overtime pay, as well as some key tips of how to save thousands on your overtime costs.
When you own and manage a company keeping track of the payroll, and in particular tracking time and half pay can become a challenge. In this article, we help you understand what is time and a half, how to calculate it, and how to leverage tools that make tracking time and processing payroll a breeze.
Today, we’re going to look at the various forms of time clock fraud and how to stamp it for good at your company.
Workyard provides leading workforce management solutions to construction, service, and property maintenance companies of all sizes.