As a general rule, most employees who work overtime in Texas must be paid at a higher rate. If they work more than 40 hours in a single week, they are entitled to time-and-a-half pay for those additional hours. As a simple example, an employee who typically earns $20 an hour would make $30 an hour for overtime.
Not all employees are eligible for comp time, but it can be an option in some situations. Comp time, or compensatory time, essentially means the employer gives the employee paid time off instead of paying them a higher wage for overtime hours.
For example, if you worked 43 hours during one week, your employer might offer comp time by telling you to take three hours off the next week instead of paying you overtime. But is this legal, or could it be considered wage theft?
Comp time must reflect overtime rates
The key point to remember about comp time is that it still has to be calculated at a time-and-a-half rate. If comp time is given at your standard rate, then you are experiencing wage theft.
Continuing the example above, if your employer tells you to come in three hours late on the following Monday, it may seem fair—three hours off for three hours of overtime. However, you are actually entitled to 4.5 hours off to account for the time-and-a-half rate. You are still owed the increased overtime rate, whether it’s paid as wages or provided as (paid) compensatory time off.
This illustrates how complex wage and hour disputes can be, and it highlights why mistakes may occur if employers or employees do not fully understand the rules and regulations. If you find yourself involved in such a dispute, it’s important to carefully explore your legal options.