Compensatory time, as defined by the federal Fair Labor Standards Act, is paid time off given to non-exempt employees as a substitute for overtime pay. With the exception of certain employees of state and local governments, the practice is illegal for non-exempt employees, regardless of whether the employer pays them a salary or an hourly wage. Missouri state laws do not specifically address the issue of comp time for exempt employees, deferring to federal guidelines instead.
Why Comp Time is Legal for Exempt Employees
By definition, an exempt employee is one to whom the overtime laws do not apply; therefore, the employer has no legal obligation to provide additional pay or time off if the employee works more than 40 hours in a week. If the employer chooses to provide a salaried employee with paid time off as a reward for the extra hours, he may do so.
Limits on Hours
Neither Missouri nor federal laws restrict the number of hours an employer may require an employee over the age of 16 to work. The employer may schedule his employees for as many hours per day or week as he desires, and under Missouri law, he may terminate an employee for refusing to work the overtime. The only requirement is that the employer pays the overtime rate to non-exempt employees who qualify for overtime pay.
Computing Comp Time for Exempt Employees
The employer may compute comp time for his exempt employees in any manner he chooses, since he is under no obligation to provide any paid time off at all. He may provide one hour of comp time for every hour over 40 the employee works, 1.5 hours for every hour the exempt employee works in excess of 50 during the week, or any other scale he chooses. If a written company policy exists, the employer must apply the policy in a consistent manner.
If an employment contract is in force, the terms of the contract prevail if they are at least as beneficial to the employee as state and federal laws. Certain municipalities may also ban the practice of providing comp time to exempt employees. For example, in May 2011, the city council of Neosho, Missouri, proposed eliminating comp time for high-level exempt employees. The council postponed the discussion, and as of the time of publication, the matter is pending.