Comp time, short for "compensation time," refers to when an employer gives an employee paid time off for working additional hours. Employers generally give comp time in lieu of paying overtime. Through the Fair Labor Standards Act and Pennsylvania state labor law, employees are entitled to overtime pay, equal to one-and-a-half times the employee's regular hourly rate, for all hours worked in excess of 40 hours in one week, with some exceptions. In Pennsylvania, employers generally cannot award comp time in lieu of paying overtime to an employee.
Private-sector employers cannot pay an employee in comp time under Pennsylvania state labor law, with one exception. In Pennsylvania, comp time is permitted if the employee takes comp time the same week the comp time is earned. For example, if an employee works nine hours each day for the first four workdays in the week, the employer can elect to send the employee home early on the fifth work day to prevent the employee from working more than 40 hours and accumulating overtime that week.
Certain eligible government employees in Pennsylvania may be paid in comp time under special circumstances. For example, contract employees may be eligible under their employment contract with the state. Additionally, non-exempt state employees and state employees can earn comp time, with some limits. Non-exempt state employees--that is, employees who are entitled to overtime pay under the Fair Labor Standards Act--can be paid 1.5 hours of comp time in lieu of 1 hour of overtime pay, but only up to 240 comp time hours per year. However, exempt employees, that is, employees who are exempt from the overtime provision of the Fair Labors Standards Act, can be paid 1 hour of comp time in lieu of 1 hour of overtime, with no total hours limit.
State employees may forfeit earned comp time by changing jobs, even if their new position is at another state agency. Whether or not an employee forfeits his comp time is determined by his labor agreement. Additionally, most union state employees are required to take their comp time within 120 days of earning it, or it will be forfeited.