Compensatory time-off plan is the practice of giving employees paid time off that can be used in the future - if they worked in excess of 40 per week.
This is a common practice in the public sector, however the Fair Labor Standards Act makes it more difficult in the private sector.
Some positions are exempt from Compensatory Time-Off under the Fair Labor Standards Act. This means they must be paid for any overtime work (over 40 hours per week).
Compensatory time-off is not legally required. Employers schedule compensatory time-off on an hour-by-hour basis, for example hours worked during the weekend outside of normal office hours.
Supervizors can deny employees compensatory time off if it will 'unduly disrupt' working practices. An employee who requests compensatory time-off must be given a 'reasonable period' with which to use the time off after it is granted.
Employees can accrue a maximum of 40 hours of compensatory time-off in a two-month period.