Q: Last week you mentioned that only public sector employers are allowed to give hourly employees time off in lieu of overtime pay. But, I work for a private company and we commonly need hourly employees to work weekends -for instance, to staff a booth at an event. Even though some of them grumble, in order to avoid paying overtime we normally ask them to take off one afternoon during the week. I thought this was allowed.
A: Yes, this is allowed and is perfectly legal for both private and public employers. It’s also a sound business practice, in that it keeps payroll costs stable.
The difference between your example and last week’s is that in yours the “time-off” was taken prior to incurring the overtime. In other words, the total hours worked during that week, always remained below 40. In contrast, last week’s example had the employee actually work over 40 hours during the week, and the employer instead of paying overtime, gave the employee “time-off” (aka comp time) some time later. It is that practice -of giving comp time to hourly workers- that is only available to the public sector. Private businesses don’t have that option; they must pay hourly workers overtime -with money- for any hours worked over 40. However like I explained, businesses DO have the option to plan ahead, like you are doing.
So, if a business is planning a big project or event that will require the work of an hourly worker, they can modify that employee’s schedule during the week, -for instance, have them leave an hour early each day- so that total hours worked do not exceed 40.
Now, whether employees grumble or are happy with the arrangement is an entirely different matter. Some workers enjoy having variety in their schedule, and like the option of doing something different with their afternoon. Others may find the schedule change disruptive, especially if they have other commitments (family, church, school). So even though the practice is legal, it’s a good idea for businesses to make sure the employee is agreeable. Find more info on calculating overtime and public sector comp-time at: http://www.dol.gov/elaws/otcalculator.htm
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