Competitive employee benefits packages can help you attract and retain talented employees. Types of leave within such packages include annual leave, maternity leave, sick leave, parental leave, and more. Employers encouraging staff to go the extra mile should consider offering compensatory leave benefits. This gives employees additional paid time off if they work overtime, during unusual hours, or on holidays.

Meaning of compensatory off

What is Comp off?

Compensatory off is an employee’s entitlement to take time off from work as a form of compensation for working on a holiday or weekend. Compensation is given as time off rather than monetary compensation.

Employees often receive these as rewards for their extra efforts to develop the organization. Compensatory off days are a way of taking care of employees on behalf of the organization so that employees will take equal care of the organization by maximizing their efforts.

Compensatory Off Rules

  1. Employees who work on public holidays can be compensated by taking the next day off or through a period equal to their regular hours if they come to the office to work. The same rule applies to employees who work on weekends, as long as they are genuinely at work.
  2. If a weekly off or public holiday falls during your work tour or travel, you will be given a half-day compensatory off. Please note that if you are traveling on your weekly off or public holiday, it will not be considered a working day, and you will not receive compensatory time off. Comp time is only given for the hours spent with clients or at the site.

Benefits of compensatory off

  1. A compensatory off policy holds employers accountable by preventing them from asking employees to work overtime.
  2. This reduces the likelihood of overwork and gives employees a chance to rest.
  3. It also encourages better planning so work can be completed during office hours.
  4. The compensatory off policy gives us the flexibility to take time off when employees need it.
  5. The compensatory off policy recognizes that time away from the office is essential.

Who is eligible for compensatory off?

The FLSA allows employees in the following four categories to receive compensatory leave:

  1. Employees of a government agency, such as a federal or state employee.
  2. Employees who receive a fixed salary.
  3. Employees work fewer than 40 hours in a given week, such as in a holiday week when they are paid for the holiday but do not work more than 40 hours.
  4. Employees in some states.

How to apply for compensatory off?

The steps to apply for comp off differ from company to company, but we’ve outlined a few common ones below:

Step 1: Before requesting a comp off, employees should be sure to read the organization’s guidelines. This will ensure that they put in an application that meets all requirements and makes the process as easy as possible.

Step 2: To recover extra time worked, you may need to seek approval from your manager or submit an expense report, depending on the rules of your organization.

Step 3: Once a comp-off request has been submitted to a manager, the manager has the discretion to approve or deny the request. The manager might approve the hours or days an employee claims as comp time off, or they might choose to reject the request.

How to create your own company compensatory policy?

Before implementing a comp-leave policy, it’s important to craft and communicate a clear leave policy to reduce confusion about when employees can take leave.

  1. Mention the criteria for compensatory leave eligibility, which must adhere to any legal restrictions on the practice.
  2. Mention in what form the compensatory will be fulfilled.
  3. When setting parameters for compensatory leave, employers should determine how long employees have to use their accrued leave.
  4. Documenting your policy and reviewing it with legal counsel to ensure it complies with the law is essential. It is equally important to train managers to apply the policy fairly in the organization.

Common examples of using compensatory off

  1. Government Organization: Federal and state employees may be eligible for compensatory leave instead of overtime pay. Under federal law, the rate of comp time is equal to 90 minutes of leave per hour of overtime worked. However, employees must use this comp time within the same pay period in which it was accrued. This can be challenging when most people work overtime because their company is in a busy period.
  2. Private companies: Private companies may offer paid time off instead of overtime pay for salaried employees who are not entitled to overtime compensation. This benefit can be administered relatively within the organization as long as it is consistent.
  3. Holidays: Some employers allow employees who work on company holidays to take compensatory leave on another day. This exchange of paid time off for comp time is called “flexible scheduling”.
  4. Exceptions: According to the Fair Labor Standards Act, private employers in Washington cannot offer compensatory leave to their employees. However, they can do so if they also pay these employees for their time off and ensure they do not work more hours than they are legally allowed during a given week.

What are the limitations of compensatory offs?

If you opt to use compensatory off instead of overtime pay, your employer must follow specific limitations and standards. These include:

  1. According to labor union representatives, union representatives can negotiate compensatory time policies if a worker belongs to a union.
  2. Before compensatory time is credited to your payroll, you and your employer must agree on how it will be calculated.
  3. For every overtime you work, your employer must pay you one and a half times your hourly rate.
  4. Compensatory off must be taken within the same pay period as in which the overtime was worked.

Employees of certain government agencies, such as health care workers, emergency personnel, and first responders, can earn compensatory off up to 480 hours per year. Certain government employees have a limit of 240 hours. Once an employee has collected this amount of compensatory off, the employer must allow the employee to take it unless doing so would disrupt essential business operations.


Compensatory off ensures your time is respected and valued and holds employees and organizations accountable for the true worth of everyone’s time. Employees will feel valued and supported, and managers will feel accountable for their employee’s well-being! With Akrivia HCM Leave Management System, you can manage and track all the comp offs of your entire workforce.  

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