What are the differences between compensatory time and paid time off?

Compensatory time and paid time off are both ways an employee can receive compensation for hours worked. However, they are different in two key ways. Compensatory time, also known as “comp” time or overtime pay, is an agreement between an employer and employee where the employee accumulates extra hours, above their regular work hours, in lieu of pay. Depending on the state, compensatory time can be used for either vacation or pre-approved activities. In Hawaii, employers and employees may agree to use compensatory time off for up to 40 hours of vacation per year. On the other hand, paid time off (PTO) is leave time that is provided by an employer and paid for by the employer as a benefit for their employees. PTO can include vacation, sick days, holidays, and personal days. In Hawaii, employers are required to provide their employees with at least one hour of paid time off for every 20 hours worked or the equivalent of 8 days of PTO per year. In summary, compensatory time is an agreement between an employer and employee where the employee accumulates extra hours in lieu of pay, whereas paid time off is leave time that is provided by the employer and paid for by the employer as a benefit. In Hawaii, compensatory time can be used for vacation or pre-approved activities up to 40 hours per year, whereas employers are required to provide employees with at least 8 days of paid time off per year.

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What are the differences between compensatory time and paid time off?

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