Compensatory Leave Meaning

Compensatory leave is paid time off given to employees in lieu of overtime pay for hours worked beyond their standard work schedule. It serves as an often desirable alternative for both employers and employees as a way to balance uneven and demanding schedules.

Compensatory leave is often referred to as “comp time” or “pay in lieu” of overtime because it is accrued to compensate workers for putting in extra hours.

Compensatory leave is most commonly implemented in industries where it’s common to work long, irregular hours, like healthcare, first responders, or law enforcement. Organizations must make sure that their compensatory time policy aligns with applicable laws and regulations.