AFGE Local 1812 has become aware of a major push by the Agency to ensure employees use their compensatory time before it expires. Many employees have been surprised to learn, when they request annual leave, that they are being required to use their earned compensatory time before their annual leave.

This, apparently, is an initiative coming from the Budget Office (as part of a cost saving initiative, so we hear). You should know that this initiative impacts employees differently depending on whether you are “Exempt” or “Non-exempt” from the Fair Labor Standards Act (FLSA). (If you are not sure whether you are exempt or non-exempt check box #10 on your latest pay statement. It will indicate etiher “E” for Exempt or “N” for Non-exempt.)

First, there are some situations in which compensatory time cannot be earned and the Agency must pay overtime. If you are Exempt from the FLSA (and over the GS-10 rate), the Agency can choose to compensate your irregular overtime work with compensatory time. For Exempt employees who work regular overtime, you must be paid Title 5 overtime pay.

If you are Non-exempt from the FLSA and you work irregular overtime, it is your choice on whether you will receive overtime pay or compensatory time. If you work regular overtime, there is no choice, you MUST be paid overtime pay (time and a half).

The Agency policy on the use of compensatory time states that the supervisor who approves the overtime work, which will result in compensatory time off for the employee, should schedule the time off at the same time the overtime work is approved and the compensatory time is earned. This doesn’t always happen and if it doesn’t happen the supervisor, in consultation with the employee, is supposed to schedule the time off as soon as possible before the compensatory time expires (26 pay periods after it was earned).

If compensatory time expires before it is used, The Agency will forfeit an FLSA Exempt employee’s expired compensatory time. An exception to this would be if the employee requested the compensatory time off and that request was turned down.

So it is actually beneficial for Exempt employees to make sure their compensatory time is scheduled and used. Otherwise, they risk losing it.

For Non-exempt employees, if the compensatory time expires, the compensatory time is converted to FLSA overtime pay (time and one half for every hour of overtime worked).

Supervisors are being given a spread sheet from the Budget Office alerting them if any employee they supervise has any compensatory time that is about to expire and instructing the supervisor to schedule the compensatory time off. Having the Agency pay overtime for compensatory time would be a black mark for the supervisor.

There are two cases where the supervisor is banned from substituting an employee’s compensatory time for annual leave: 1) within the last three months of the year, and 2) for any period of the employee’s vacation period (this is the period of extended leave employees are supposed to be given the opportunity to select at the beginning of every year).

The idea behind the ban on substituting compensatory time for annual leave during the last three months of the year is to prevent the Agency from forcing employees into a use or lose situation for their annual leave.

This ban is not the best situation for Exempt employees because expired compensatory time is forfeited but there is the possibility that use or lose annual leave may be restored. Exempt employees should make sure they use up any compensatory time that may be expiring at the end of the year instead of their annual leave and then seek a restoration of any annual leave that was lost.

For Non-exempt employees, any compensatory time that expires is converted to overtime pay, so if the supervisor does not schedule it, the ban on substituting annual leave for the two reasons stated above is beneficial for the Non-exempt employee. This is because expiring compensatory time is not forfeited for Non-exempt employees; it is converted to time and one half pay. The Non-exempt employee can use up his or her annual leave to avoid a use or lose situation and then cashing out any expiring compensatory time.

If you have any questions about this please contact your AFGE Local 1812 representative.