Your boss offers "comp time" — a day off next week — instead of overtime pay for the extra 10 hours you worked. Is that allowed? In most cases, no. Here's exactly when comp time is legal and what to do when it isn't.
"Comp time" — short for compensatory time — is paid time off given in lieu of overtime cash. Under the Fair Labor Standards Act, comp time is only legal for public-sector employees. Private employers must pay cash overtime, not give comp time. If your private employer offers comp time instead of cash OT, that's wage theft.
Federal, state, and local government employees can be offered comp time at the rate of 1.5 hours off per overtime hour worked, instead of cash overtime pay. The rules:
Congress has attempted to extend comp time to private employees multiple times — the Working Families Flexibility Act was reintroduced in 2023 — but no such law has passed. As of May 2026, private-sector comp time is illegal under federal law.
Some states attempted state-level comp time laws but these were struck down as conflicting with FLSA. The federal floor controls.
If you're a properly-classified exempt employee, FLSA doesn't apply to your overtime at all — you're not entitled to it. Your employer can give you comp time, flex time, or nothing extra, and it's all legal. The "no comp time for private sector" rule only applies to non-exempt workers.
This is why salaried managers often get "flex time" offered to them informally. That's legitimate because they're exempt. The same offer to an hourly worker would be illegal.
"Hey, you worked 10 extra hours this week. Take Friday off next week instead of getting OT pay" — that's illegal if you're non-exempt at a private employer.
What IS legal: rearranging your hours WITHIN the same workweek. Worked 50 hours Monday-Thursday? You can take Friday off and your weekly total drops to 50 hours — but that's still 10 hours of overtime that must be paid. Adjusting your schedule doesn't erase overtime.
Even less ambiguous: if your employer rearranges your schedule so that you work 30 hours one week and 50 the next, you must still be paid 10 hours of overtime for that 50-hour week. Averaging across weeks is also illegal.
If your private employer offers comp time instead of overtime, you have several options:
$25/hr employee works 10 hours overtime:
The hours-equivalent looks equal on paper. But cash overtime is taxable income, accrues to Social Security, and contributes to 401(k) match calculations. Comp time delivered as unpaid leave doesn't. Over a year of accumulated overtime, the lost retirement contributions and Social Security credits can be substantial.
A few states (Washington, Oregon) have comp time provisions for state government employees that mirror federal rules. No state allows private-sector comp time. California is especially strict — California labor commissioners have aggressively prosecuted comp time offers as wage theft.
If you're a private-sector non-exempt employee and your boss offers "comp time" instead of overtime, that's an FLSA violation. You're owed the cash. Politely decline, document the offer, and if it persists, the DOL will recover the back pay for you.
Last updated May 2026. If something here is wrong or out of date, email contactus@calculatehours.net — we update fast.