What is the difference between compensatory time and overtime pay?

Compensatory time and overtime pay are two different forms of compensation for hours worked in excess of the standard 40-hour work week. Compensatory time, also known as “comp time,” is time off that an employee accrues when they work in excess of 40 hours per week. The employee can then use this accrued time off at their convenience. Comp time is usually paid at the employee’s regular rate of pay and can be used for anything, from vacation to sick days. Overtime pay, on the other hand, is money paid to an employee for any hours they work in excess of 40 per week. Under New Mexico state law, employees must be paid a time-and-a-half rate for any hours worked beyond 40. Additionally, any hours beyond 48 in a single week must also be paid at a double time rate. Overtime pay must be paid to the employee in the same pay period that the overtime hours were worked. Overall, the biggest difference between compensatory time and overtime pay is that compensatory time allows for an employee to use their accrued hours for time off at their convenience, while overtime pay requires that the employee receive a financial payout for any hours worked beyond 40. Both are required in New Mexico and are beneficial for employees and employers alike.

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What is the difference between compensatory time and overtime pay?

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