Under certain conditions, employees of federal, state, or local government agencies who irregularly or occasionally work overtime may receive compensatory time off—which is time off that is compensated—instead of receiving cash overtime pay. It is usually illegal for private sector businesses to compensate employees who are eligible for overtime pay (are nonexempt under the Fair Labor Standards Act) with compensatory time—often referred to as comp time.

Policies on compensatory time off in lieu of overtime pay vary between employees who are covered by the Fair Labor Standards Act (FLSA) and those who are exempt from it (usually executive, professional, and administrative employees). Exempt employees are generally not eligible to receive overtime pay. But whether an employee is exempt or nonexempt under the FLSA, the government employer (agency) may be able to approve comp time for an employee.

Compensatory time off in lieu of overtime pay generally must be used within 26 pay periods. If an FLSA nonexempt employee doesn’t take comp time within 26 pay periods, the employer may have to pay the employee for that overtime work at the overtime rate in effect during the pay period in which the overtime work was performed.

In Idaho, as in other states, the rules regarding compensatory time off (comp time) in lieu of overtime pay are governed by the Fair Labor Standards Act (FLSA). For federal, state, or local government employees, comp time can be granted under certain conditions instead of cash overtime pay. This is typically for those who work overtime on an irregular or occasional basis. However, for private sector employees, it is generally illegal to provide comp time instead of overtime pay to nonexempt employees—those who are eligible for overtime under the FLSA. Exempt employees, often in executive, professional, and administrative roles, usually do not receive overtime pay and therefore the concept of comp time in lieu of overtime does not apply in the same way. When comp time is granted to nonexempt government employees, it must usually be used within 26 pay periods; otherwise, the employer may be required to pay the employee in cash at the overtime rate that was in effect when the overtime work was performed.