Employment Law

by Bob Lawson Jr.

The work environment is changing in companies throughout the country. To meet employee demands, companies are exploring flexible work schedules, job- sharing programs, day care and the allowance for personal time. Of particular interest is the accrual of compensable time off from work or "comp time" for family issues, doctor visits or other personal matters.

Comp time is not to be confused with eligible leave under specified statutory requirements allowed by certain laws, such as the Family Medical Leave Act. Many employees simply desire the ability to accumulate paid time off from work instead of overtime or other benefits. Also, employers may use comp time as a reward or incentive for its employees.

Last year, Congress introduced legislation for employees to accrue compensatory time off, and President Clinton referenced this subject in his recent State of the Union address. Since there are no federal or state laws addressing this subject, any such time away from work remains within the employer's discretion. However, Missouri employers should be careful implementing a broad-based comp time program for all employees due to potential wage-and-hour violations.

Generally, private employers may not deviate from the Fair Labor Standards Act's requirement to pay "non-exempt" employees overtime for work in excess of 40 hours. Therefore, compensatory time is usually not available to "non-exempt" employees in lieu of overtime.

This rule, though, does not apply to "exempt" employees under the Fair Labor Standards Act (all employees are considered non-exempt unless they fall into one of the act's specific employment classifications which will exempt them from minimum wage and overtime requirements).

The employer and "exempt" employees are free to reach any agreement regarding comp time without violating the law. There is one narrow exception, though, for non-exempt employees allowed by the Department of Labor, namely a "time-off" plan.

Time-off plans differ from general comp-time agreements. These limited plans will not violate the overtime requirement if employers adhere to certain conditions. A permissible time-off plan must include that:

?The employee get time off at time and one-half for all hours over 40 hours worked in a week; and

?The employee must take the paid time off during the same pay period in which it was accrued.

For example, a non-exempt employee who works 50 hours the first week of a two-week pay period can take off 15 hours the following week. In this example, if the individual works 25 hours or less the second week, the employer will not be subject to any overtime for that pay period.

However, if the employee's 50-hour work week occurs during the second week of the pay period, then the time-off exception is not allowed, and the Department of Labor will require the employer to pay the overtime premium for that two-week pay period.

As previously stated, federal legislation was introduced on comp time. The U.S. House of Representatives passed the Working Families Flexibility Act of 1997 last year. Under this proposed legislation, eligible employees could receive compensatory time off rather than monetary overtime compensation.

The eligible employee could use his/her accrued compensatory time off for any personal matter, within a reasonable period after making a written request to the employer, as long as the comp time did not unduly disrupt the employer's operations.

Also, an employee may not accrue more than 160 hours of compensatory time each year. At the end of a year, the employer is required to pay the employee for any unused accrued compensatory time at the overtime rate.

Similar legislation has not been introduced in the Senate. Although it is doubtful that federal legislation will be passed this year, this employment issue looms on the horizon. For now, employers are cautioned regarding comp time for those employees who are subject to minimum wage and overtime requirements.

(Bob Lawson Jr. is an attorney with the firm of Blackwell Sanders Matheny Weary & Lombardi LLP in Springfield.)

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Missouri employers must take care that their comp-time policies don't violate wage-and-hour restrictions.[[In-content Ad]]