What is the difference between compensatory time and overtime pay?

The difference between compensatory time and overtime pay is that compensatory time is time off instead of money. Compensatory time is a type of leave paid to a worker in the form of time off instead of wages. It is used to compensate an employee for hours worked beyond the standard workday, typically after the fifth consecutive workday. Compensatory time allows employers to offer flexibility in scheduling. Overtime pay is an additional amount of money an employer pays to their employee for every hour that they worked beyond the standard 8-hour day or 40-hour work week. These additional hours are referred to as “overtime hours.” Overtime pay is usually 1.5 times the employee’s regular rate of pay. Overtime pay is mandated by the federal and Washington state governments, and employers must pay their employees for any overtime hours. In Washington, workers are entitled to receive either overtime pay or compensatory time off for overtime hours worked. Overtime pay is usually preferred by employees, as it gives them immediate money to use. Compensatory time off can be beneficial to employers, however, as it saves them money on wages while giving employees flexibility.

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What is the difference between compensatory time and overtime pay?

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