Compensatory Off

compensatory time off in the workplace

What is Compensatory Off?

Compensatory off is a time off entitled to an employee for working on paid holiday or week off defined by the company. It has to be availed by the employee in the given period of time only. Compensatory off is a way for organizations to recognize and reward employees’ efforts beyond their regular work expectations and promote work-life balance and employee well-being. There are also laws defined for availing compensatory off and payments if the employee works on statutory holidays. Companies with a compensatory off policy pay the employees in the form of paid time off (PTO).

Rules Of Compensatory Time Off

The rules regarding comp off can vary based on the organization’s policies and applicable labor laws. While specific rules may differ between companies and jurisdictions, here are some common principles and considerations regarding comp-off:


Companies may have criteria for employees to be eligible for comp-off. This may include factors such as job role, seniority, or specific employment contracts. It is important to consult company policies or HR department to determine eligibility.

Overtime Work

Comp-off is typically granted for working extra hours beyond the standard work schedule. The rules may specify the minimum number of extra hours required before comp-off is granted.

Approval Process

Employees usually need to obtain prior approval from their supervisor or manager to accrue or use comp-off. This ensures proper planning and coordination within the organization.

Accrual and Tracking

Companies may have rules regarding the accumulation and tracking of comp-off. This includes recording the number of hours worked above the regular schedule and the corresponding comp-off earned. It is important to accurately track and document comp-off to ensure transparency and fairness.

Utilization Period

Comp-off may have an expiration or utilization period, meaning employees must utilize their earned comp-off within a specified timeframe. This prevents excessive accumulation and helps maintain operational efficiency.

Conversion Options

Some companies may provide the option to convert accrued comp-off into monetary compensation instead of taking time off. This allows employees to choose between time off or additional pay, depending on their preference and company policies.

Legal Compliance

Companies must comply with relevant labor laws and regulations regarding comp-off. This includes adherence to maximum working hours, overtime compensation, and any specific requirements outlined by labor authorities.

Frequently Asked Questions Compensatory Time Off

Is comp-off allowed according to the laws ?

Laws may vary from state to state but the comp-off is also dependent on the type of employment. The non-exempt employees are not allowed for comp-off, they are to be paid on the basis of traditional overtime methods.

How to calculate comp-off ?

Compensatory time off, also known as comp off, is normally accrued by an employee based on the additional hours worked beyond their regular schedule. For example, you can figure out how much extra time an employee worked on holidays or overtime, convert it to paid time off (usually at a 1.5x or 2x ratio depending on business policy and labor laws), and then add it to their balance. To ensure fairness and compliance with labor laws, make sure you have a clear policy in place explaining how comp time is earned, tracked, and used.

Can comp-off be denied ?

Employees have to make a formal request in order to comp off their overtime. On the other hand, the employer can deny the overtime based on a valid situation.

Can comp-off be carried forward to the next year?

Company policies may differ, but it is common for comp-off to be utilized within the same calendar year. However, some organizations may allow limited carry-forward of unused comp-off hours into the next year. Employees should refer to company policies for specific details.