Is Comp Time Legal for Salaried Employees? Find Out Now!

If you’re an employer trying to balance fair compensation and work-life balance without stepping on legal landmines, this blog’s for you. Let’s break down when, where, and how comp time can be used legally for salaries employees and when it might come back to bite.

Is comp time legal for salaried employees in the UK?

If your salaried employees are clocking extra hours, can you offer comp time instead of overtime pay? In the UK, the concept exists, but not quite in the way you might expect. Before offering time instead of overtime, employers need to understand how labor laws and workplace customs like TOIL fit into the picture.

Understanding UK Working Time Regulations

The Working Time Regulations 1998 lay the groundwork for working hours and rest entitlements across the UK. They apply to wage employees, salaried employees, and hourly workers regardless of exemption status. Here’s what they say:

• The maximum number of hours in a week an employee works is 48, averaged over 17 weeks.

• Workers are entitled to:

  • A 20-minute rest break if the hours worked in a day exceed 6.

  • 11 consecutive hours of rest in a 24-hour period.

  • One day off per week, or two days per fortnight.

Employers must track hours worked accurately, whether it’s for hourly employees, non exempt employees, or salaried workers. There’s no separate rule in the UK for compensatory time per se, but TOIL (time off in lieu) is where things get interesting.

The role of TOIL in UK employment practices

Comp time often takes the form of time off in lieu of overtime pay. It’s commonly used in sectors with unpredictable hours or tight labor budgets.

Here’s how TOIL typically works:

• An employee works beyond contracted hours worked (usually outside the 9-to-5).

• Instead of pay overtime, they earn paid time off, later.

• This arrangement is often voluntary and must be agreed upon in advance.

TOIL isn’t defined in UK law, but it’s widely accepted, especially under collective bargaining agreements or included in staff handbooks and contracts. However, if you're not careful, offering TOIL to non exempt hourly employees or using it to avoid overtime wages can backfire.

You should never use TOIL in a way that denies an employee their minimum rest breaks or pushes them beyond legal working limits.

Employer obligations under UK law

Even though UK law doesn’t specifically regulate comp time legal status, offering TOIL comes with strings attached. Employers need to:

• Keep detailed records of hours worked, including any accrued comp time or accrued hours.

• Ensure comp time usage doesn’t breach maximum accrual limits or rest period entitlements.

• Make sure eligible employees agree in writing to the TOIL arrangement.

• Confirm that any agreement doesn't result in unused comp time that’s later disputed.

• Avoid forcing TOIL on public sector employees or private sector employees without proper consent.

Most importantly, TOIL should never be used to bypass legal pay obligations. Employers still have a duty to provide fair compensation and failing to do so could trigger legal action.

So yes, comp time (via TOIL) can work for salaried employees in the UK, but only if you do it by the book.

Is comp time legal for salaried employees in the US?

If you're managing salaried employees in the US, it’s not as straightforward as offering time instead of overtime. Thanks to the Fair Labor Standards Act, there are rules, exceptions, and a whole lot of grey areas.

Overview of the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) is the federal law that sets the rules on overtime pay, minimum wage, record-keeping, and youth employment. When it comes to comp time (also called compensatory time) FLSA is very clear in one aspect: it doesn’t allow private employers to offer comp time in lieu of overtime wages for nonexempt employees.

Here’s the basic breakdown:

• Non exempt hourly employees must receive overtime pay at 1.5x the regular rate for overtime hours worked beyond 40 hours in a week.

• Public sector employees (like emergency responders or emergency medical technicians) can earn comp time, but it must follow strict rules, including maximum accrual limits and prompt use within a reasonable period.

Private sector employers offering comp time legal arrangements need to be extra cautious. Unless you’re a government employer, the FLSA generally says no.

Exempt vs. non-exempt employees

A lot rides on whether someone is exempt or nonexempt. This classification determines whether they're entitled to overtime compensation and therefore, whether they can get comp time.

Here’s how it works:

To determine FLSA exemption status, employers should consider salary level, salary basis, and job duties. Misclassifying employees leads to major compliance issues. You don’t want to award comp time only to find out your exempt employees should’ve actually received overtime pay.

Recent changes to FLSA regulations

There have been ongoing updates that affect how you handle comp time, especially when determining exemption status and pay thresholds.

What’s changed recently:

• Salary threshold increases: The minimum salary to classify someone as exempt has been raised in several states. That means more workers now qualify as FLSA nonexempt employees and must get overtime compensation.

• Increased audits: The Department of Labor has been cracking down on employers who miscalculate overtime rate, misclassify staff, or employer deny comp time unfairly.

• Focus on timekeeping: More scrutiny is placed on how businesses track hours, calculate hours of comp time, and handle unused hours.

To stay compliant, private sector employers need airtight systems; automated time tracking tools, clear policy documents, and up-to-date training.

So is comp time legal for salaried employees in the US? Sometimes. But only if you’ve nailed down the FLSA exemption status, followed all labor laws, and understand exactly who your eligible employees are.

Implementing comp time policies effectively

Offering comp time can boost work-life balance and ease the labor budget, but only if the rules are crystal clear. A sloppy policy can mean legal headaches, unhappy employees, and disputes over unused comp time or accrued compensatory time. Let’s talk about how to set things up properly.

Best practices for policy development

If you're going to offer comp time (whether you're dealing with salaried employees, non exempt hourly employees, or public sector employees) you’ll need a written policy that ticks every legal box.

Here's what to include:

• Define eligibility: Be clear about which eligible employees qualify based on FLSA exemption status, job type, and contract terms. Mention if it applies only to government employees or if private sector employers are included.

• State how many hours can be accrued: Set maximum accrual limits to avoid excessive accrued hours.

• Clarify the comp time formula: For example, 1.5 hours of compensatory time for every overtime hour worked by nonexempt employees.

• Explain when and how comp time can be used: Include a reasonable period for requesting time off and what happens to unused hours.

• Include payout rules: If an employee leaves the company, specify what happens to any accrued comp time.

Don’t forget to mention how this policy interacts with collective bargaining agreements, if applicable. Also, always ensure policies are consistent with local labor laws.

Communicating policies to employees

Even the best policy won’t work if your team doesn’t understand it. Comp time can confuse hourly employees, salaried workers, and even employers if it’s not explained plainly.

Tips to keep things clear:

• Use simple language: Skip the legal jargon; explain what comp time is, how it’s earned, and how to use it.

• Train managers: They should be able to explain comp time usage, especially when employees work overtime or want to take paid time off.

• Give visual aids: Use charts or tables to show how calculating comp time works and how it compares to overtime compensation.

• Keep it accessible: Add the policy to your employee handbook, onboarding materials, and internal HR portal.

A short example can help too:

“If you work two overtime hours on a Saturday, you’ll receive three hours of comp time to use later—just request it within 60 days.”

Monitoring and record-keeping

Failing to track hours or monitor comp time accrual is a recipe for non-compliance. Whether you manage public sector employee works or private businesses, data accuracy is key.

Best practices:

• Use automated time tracking: Manual logs often miss extra hours or miscalculate overtime rate. Automating ensures that comp time is calculated fairly and consistently.

• Track every pay period: Monitor accrued compensatory time and usage within each pay period to avoid surprise liabilities.

• Audit regularly: Review records for discrepancies; especially for exempt employees who may work outside traditional schedules.

• Flag unused comp time: Set alerts for unused hours nearing expiry or payout triggers.

This is especially important in sectors with flexible work scheduling or flex time, where it's easier to lose sight of who’s earned what.

Solid record-keeping = less risk, happier employees, and full compliance with labor laws.

Easily manage your employees' hours worked!

• Easily clock in and out
• Automatic calculation of surcharges
• Link with payroll administration

Try for free Request a demo

Manage comp time effortlessly with Shiftbase

If you're offering comp time or paid time off in lieu of overtime pay, keeping track of everything manually can become a nightmare; especially when juggling accrued hours, maximum accrual limits, or different rules for exempt employees and non exempt hourly employees. That’s where Shiftbase comes in.

Our workforce management software helps you simplify:

• Employee scheduling so you can allocate shifts fairly and avoid unnecessary overtime hours worked.

• Time tracking to automatically log hours worked, comp time accrual, and ensure overtime compensation is accurate.

• Absence management to handle comp time usage without confusion or manual errors.

With real-time data, automated calculations, and full visibility into your team’s schedule, Shiftbase gives you the tools to manage comp time legal policies across the board—whether you're dealing with private sector employees, public sector workers, or a hybrid workforce.

👉 Start your free 14-day trial today and manage comp time with confidence: Try Shiftbase