Compensatory Time Off – It’s Not As Simple As It Seems

Wage and Hour Landmine: Compensatory Time Off

Posted on 24-Jan-08 by The Timekeeper

You might be tempted to save some cash by simply offering your employees the option of taking compensatory time off (CTO) in lieu of paying overtime. Your employees might even like the idea of getting more time off.

But before you jump in with both feet, you’d be well-advised to talk to a lawyer familiar with employment law in your area, because CTO is fraught with booby traps just waiting to trip up the unsuspecting business owner.

I just came across this excellent article in the San Francisco Chronicle on issues related to CTO and nonexempt employees.

For instance, CTO may not even be allowed at all in your state. And if it is allowed, you likely have to “pay” CTO at a rate of 1.5 hours off for each hour of overtime worked. And there are loads of other restrictions and conditions that must be met.

If anything, CTO is an even trickier area of wage and hour law than “normal” overtime — and that’s pretty darned tricky.

So play it safe — make sure you check with a wage and hour lawyer before you implement any compensatory time off plan for your employees!