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Can my employees accrue compensatory time off (comp time) instead of being paid overtime?

Generally, no. Private employers generally are not permitted to offer compensatory time off (CTO) to nonexempt employees in lieu of paying overtime.

A very limited exception applies to employers who are not subject to the federal Fair Labor Standards Act but are covered under Wage Orders 2, 4, 6, 7, 9, 11, 12 or 15.

Public employees may use CTO, but they do not have the absolute right to decide when it will be used, according to a 2000 decision the United States Supreme Court.

Read more about Compensatory Time Off in the HR Library.

Q&As

If an employee works back-to-back consecutive shifts, does he need to be paid overtime for the second shift?
Must I treat a nondiscretionary bonus based on performance standards as part of the regular rate of pay and possible payment of overtime?
If my employee earns more than $100,000 per year, are they exempt from overtime?
Does a holiday count as a day worked when calculating overtime pay?
Are intrastate truck drivers exempt from overtime?
How is overtime calculated for an employee paid two different hourly rates?
Do I pay my employees based on overtime worked in one day or in one week?
Must I pay overtime on hours an employee is paid for time off such as vacations, holidays and sick time?
If I put an employee on salary, are they exempt from overtime?
Is the value of gift cards (given as a holiday gift) part of my employees’ compensation that needs to be considered when calculating overtime?