Wage and Hour Laws FAQ
Can I give my employees time off instead of paying them overtime?
4. Can I give my employees time off instead of paying them overtime?
It depends on how much time off you give them, and when. Private employers are not allowed to give straight compensatory or "comp" time -- one hour off for every hour worked -- because this type of arrangement cheats employees out of their higher overtime pay. However, there are a couple of ways to rearrange an employee's work schedule during a pay period to avoid paying overtime. For more information, see Nolo's article Compensatory Time Might Not Be Legal.