Q. "Can we use comp time with our employees?"
Answer:
It depends. For nonexempt employees of a private employer, no. The Fair Labor Standards Act (FLSA) doesn’t permit private employers to offer compensatory time in lieu of overtime pay.
You could offer time off to your exempt employees as a reward for working more than their typical work week, which is considered a form of flex time, but there are downsides:
First, exempt employees may grow accustomed to taking time off when they work extra hours, and which may not be a desirable or sustainable practice.
Second, tracking the hours of exempt employees in order to reward them may be extra work for both you and them.
Third, formalizing a “comp time” system for exempt employees could create confusion or a perception that they are compensated on an hourly basis.
Instead of creating a formal flex time system for exempt employees, it may be much simpler and smoother to find other ways to reward exempt employees for working extra hours when needed.