Background. Many churches have implemented "comp time" arrangements as a way to avoid paying overtime compensation to hourly employees who work more than 40 hours in one week. Instead of paying employees overtime compensation at a rate of one and a half times their normal rate of pay ("time and a half") for hours worked in excess of 40 in the same week, the employer "contributes" the excess hours to a "comp time account." Employees who work less than 40 hours in a week can draw upon their accumulated comp time so that they receive their normal paycheck for 40 hours of work.
Example. A church implements a comp time arrangement. Bill, an hourly full-time employee, works 50 hours for 10 weeks in 2000, accumulating 100 hours of comp time. The church only pays Bill for 40 hours of work during the weeks in which he worked 50 hours. He was not paid overtime compensation at a rate of one and a half times his normal hourly rate of pay for the hours worked in excess of 40 in any week. Bill takes a day off during the first week of April 2001, and asks to be paid for a full 40-hour week by drawing 8 hours from his comp time account. The church complies with this request.