Compensatory or comp time is time worked by an employee beyond their required number of work hours, often calculated at 40 for exempt employees. Comp time is calculated and recorded and employees expect some remuneration for the extra hours worked, most often paid as time off from work, or comp time, which compensates for the extra hours worked by an employee.
Comp time is paid instead of pay or overtime pay to exempt employees. Nonexempt employees are most frequently covered by the regulations of the Fair Labor Standards Act (FLSA) for overtime pay and are ineligible for comp time.
Formally-recorded and calculated comp time is almost exclusively a public sector phenomenon, and occurs most frequently in a union represented environment. Private sector employers, who pay exempt employees for the accomplishment of a whole job, expect employees to devote the amount of time necessary to accomplish the organization's work. Private sector employers do not calculate hours worked over 40 by exempt employees nor call these hours comp time. Nor do private sector employees expect to be paid comp time.
Employers fear that comp time will instill in salaried employees an hourly mindset about work rather than the mindset of goal achievement, job accomplishment, and doing whatever is necessary to accomplish a job. When an employee's work load is extraordinary, private sector employers solve the problem by streamlining and continuously improving the job, assigning work goals to another employee, adopting a flexible work schedule, or hiring an additional employee.
Informally, many organizations leave time off decisions in the hand of managers who supervise staff. If an employee has an unusually active travel schedule, is devoting many weekend hours to work or work travel, or is temporarily working large numbers of hours for a new product release, a needed sales goal, or the integration of a new company or department, to name a few examples, a manager may allot the employee time off.
The key is that the time is not laid out on a scorecard and accorded tit for tat time off. The additional time worked comes with the job and exempt employees know that when they accept the position. The time necessary to accomplish the whole job is required.