Illinois employers may wonder whether they can substitute compensatory time off, commonly referred to as comp time, for overtime pay. Some employees may even prefer comp time to overtime pay. State labor laws, though, are specific about who is and who is not eligible to receive comp time for working overtime hours. In general, the practice of paying comp time is illegal.
Comp time is paid time off. Employees earn and accumulate hours of comp time for working overtime hours. Employers may prefer to give employees paid time off at their regular rate instead of overtime pay -- which, according to the Illinois labor code, must be at least 1.5 times an employee's regular wage rate for all time worked past 40 hours during a given workweek. Employees may sometimes prefer the time off to the larger paycheck they receive with overtime pay.
Private Sector Employees
The Illinois Department of Labor website states that employers in the private sector may not replace overtime pay with comp time. The state takes its cue from federal legislation, specifically the Fair Labor Standards Act, which does not permit employers to grant comp time in lieu of overtime pay. The FLSA requires employers to compensate employees for overtime hours promptly and in the form of cash or another "negotiable instrument."
Public Sector Employees
As the Illinois Department of Labor implies in its statement that comp time is an illegal practice in the private sector, it is allowable for employees who work for government agencies at the state, local or interstate level. Just as private-sector employers must pay 1.5 times an employee's usual wage rate when the employee works overtime, public-sector employees must award at least 1.5 hours of comp time for each hour of overtime. Most public-sector employees may accumulate up to 240 hours of comp time. Emergency response personnel, firefighters, police and employees who work in some seasonal activities may accumulate up to 480 hours.
Illinois labor law exempts some employees from overtime coverage, which means their employers do not owe them overtime pay. With these employees, employers may craft an overtime policy of their choosing, meaning they may opt to give them a certain amount of comp time per overtime hour or no form of overtime compensation at all. Exemptions apply to, among other groups, salesmen and mechanics who work for dealerships; farm laborers; employees who work in executive, administrative or professional jobs as defined by the FLSA; commissioned employees as defined by the FLSA; and some workers in radio and TV in towns with populations of less than 100,000.
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