Time off in lieu; compensatory time; or comp time refers to a type of work schedule arrangement that allows (or requires) workers to take time off instead of, or in addition to, receiving overtime pay. A worker may receive overtime pay plus equal time off for each hour worked on certain agreed days, such as bank holidays.
In the United States, such arrangements are currently legal in the public sector but not in the private sector.
For example, non-exempt workers must receive at least one and one half times their normal hourly wage for every hour worked beyond 40 hours in a work week. For example, workers who clock 48 hours in one week would receive the pay equivalent to 52 hours of work (40 hours + 8 hours at 1.5 times the normal hourly wage). That would permit the worker in this example to forgo the 12 hours of overtime pay and instead take 12 paid hours off at some future date.
In Australia, such arrangements both in the private and public sector are common.
In some cases, particularly when employees are represented by a labor union, overtime may be paid at a higher rate than 1.5 times the hourly pay. In some factories, for example, if workers are required to work on a Sunday, they may be paid twice their regular rate i.e.(double time).
Read more about this topic: Overtime
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