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 Missouri, as in other states, the rules regarding compensatory time off (comp time) in lieu of overtime pay are influenced 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 permissible even for employees who are nonexempt under the FLSA, meaning they would typically be eligible for overtime pay. However, for private sector employees, it is generally illegal to provide comp time instead of overtime pay to nonexempt employees. Exempt employees, which typically include those in executive, professional, and administrative roles, are not usually eligible for overtime pay, but government agencies may still grant them comp time. In both cases, when comp time is granted, it must be used within 26 pay periods, or the employee may be entitled to receive payment for the overtime at the applicable overtime rate. It's important to note that while these are the general federal guidelines, specific state or local government policies in Missouri may have additional provisions regarding comp time for government employees.