Comp Time Instead of Overtime: Rules for Government Employees

If you work for a city, county, state or school district, you may be offered “comp time” instead of overtime pay. These rules apply to public agencies under section 7(o) of the FLSA, and they are more protective than many workers realize.

The rate

29 CFR 553.22 says comp time must be earned at no less than one and a half hours for each overtime hour. So the 480-hour cap equals at most 320 hours of actual overtime, and the 240-hour cap equals at most 160 hours.

The caps

Under 29 CFR 553.24, employees engaged in public safety, emergency response or seasonal activity can accrue up to 480 hours; others are capped at 240. The agency can’t use the higher cap just by labeling a job; “the work performed is controlling.” Once you hit the cap, further overtime must be paid in cash.

Using your comp time

29 CFR 553.25 says you must be allowed to use comp time within a “reasonable period” after asking, unless it would “unduly disrupt” operations, and “mere inconvenience to the employer is an insufficient basis for denial.” The comp-time arrangement must be agreed to before the work is performed.

Cashing out

29 CFR 553.27 says accrued comp time can be paid out at any time at your current regular rate. At termination, it must be paid at no less than the higher of your average regular rate over the last 3 years or your final regular rate.

Tips

• Check your balance on every pay stub.
• If you expect a raise, holding comp time until after it can mean a bigger payout, since cash-outs use the rate at the time of payment.
• Ask for the written agreement or union contract that governs comp time.

Published October 27, 2026. Sources are linked in the text.

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