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Blog Banner of Compensatory Off Everything That You Need To Know About It

Compensatory Off: Everything That You Need To Know About It

Famously called comp time, comp leave, or comp off, this leave is undoubtedly one of a kind. While the other leaves are accumulated with time, comp leaves are earned through working extra hours on days offs, holidays, etc.

Compensatory off is the leave that is awarded as compensation to the employees who work extra for some hours or days. This type of leave enables people to encash the leaves when required in exchange for overtime that they have earned by working extra.

Companies with a comp off policy compensate the employees in the form of PTO or paid time off as the alternative to paying time and a half in overtime pay. It is thus essential to understand what time and a half are.

It is 50 percent more than what a worker gets as regular pay. This means that the company is liable to pay the worker his usual salary and an extra half of that for each overtime hour he works. It might sound challenging, but overtime policy pay can be calculated by multiplying the regular pay by 1.5.

The term’ compensatory off’, also called compensatory leave, compensatory time, or Comp hours, is the right of employees to take paid time off when they work overtime like on holidays, for extra hours, etc. Such a leave allows the employees to take off with pay in place of the overtime pay when they have worked under situations like holidays, a scheduled day off, overtime hours, or when the office is closed.

It would help if you remembered that compensatory leave works differently from other leaves as the time off is accrued, hour by hour. This means that for each hour of overtime the employee works, one hour of comp time is given. So the main idea is that the company compensates the employees with paid leaves rather than giving overtime pay.

Types of Compensatory Leave

While the various types of compensatory leaves are like in how they function, the situations in which hours may be provided vary.

1. Overtime compensatory leave

It is awarded when the employee chooses paid leave instead of overtime pay. For example, if the employee works 8 hours overtime, they can take 8 hours of paid time off on another date.

2. National holiday and weekend compensatory leave

Employees who work on a national holiday or a weekend for any reason are allowed to take time off at a later date.

Who is eligible for compensatory off?

Only the employees who have worked for at least 40 hours in the previous week are granted compensatory offs. Employees may even take half of the Comp off if needed to work for extra 3 hours or more after their actual work time on any given day.

Only the employees who have worked for at least 40 hours in the previous week are granted compensatory offs. Employees may even take half of the Comp off if needed to work for extra 3 hours or more after their actual work time on any given day.

There are 4 primary groups of employees that are qualified for Comp offs under the factory law-

  • Salary paying personnel 
  • Public sector workers, including central and state government employees
  • Non-exempt workers who put in less than 40 hours a week like during a vacation when they are compensated but don’t take are not free from the overtime pay.
  • Workers in some states like Uttar Pradesh, Tamil Nadu, West Bengal, Andhra Pradesh, Karnataka, Maharashtra, Rajasthan, Gujarat

For how many days is compensatory off valid?

Deciding the limit for Comp off validity depends on the company. There is no set number of days that the Indian government stipulates. Most organizations prefer making compensatory leaves available for around 30 days, as mentioned above.

Why Comp off was created?

Compensatory offs can be said to be the method to attract employees into giving their best, both in return for compensation as well as appreciation. Before the making of compensation in form of payments or offs, there were a lot of grievances that plagued the employees.

They were overexploitation, meager salary, and health issues. All such grievances started resulting in impacts such as anger issues, loss of interest in work, and disagreement among employers and employees. Lack of interest further resulted in situations where workers refused to put in additional efforts, leading to the company’s degradation.

It additionally led to employee strikes and protests to get their rights. So, after much negotiation, it was decided to offer the employees extra leaves or cash to compensate for their efforts and the company’s development.

How to draft your Compensatory leave policy?

Before making a comp-off policy, it is crucial to create and communicate a clear policy to reduce any confusion.

Clearly mention the criteria for Comp off eligibility that must adhere to legal restrictions

Mention in which form or case the compensatory off will be fulfilled

When setting the parameters for a comp off, the employer should determine how long the employees have to use the leave

Documenting the policy and then reviewing it with legal personnel is a must to ensure that it complies with the laws. It is also essential to train the managers to use the policy fairly.

So, before adopting a comp leave, a policy must be established. It is simple for employees and employers to know the expectations when the policy is written clearly and conveyed well. Also, when drafting the leave policy, public companies must meet all criteria. For example, the company and the association must agree to the Comp off policy if a union is involved.

Deciding the eligibility– When the employer decides who qualifies for the leave, it is essential to consider the current legal limitations. The exempt workers working more than 40 hours a week will get Comp off from the employer. Will these employees require permission to get the Comp off in advance? Will the non-exempt workers qualifying criteria be different from the exempt workers?

Calculation– It is also essential to establish the payment method for the Comp off. Will you give compensatory leave at an hourly price or some set price? How you will record the comp time is another concern. Is it a component of your HR software? Do you need to have supervisors keep a tab on it?

Other parameters– You must also set restrictions on how to use the comp time. How long may the employees use the compensatory leave? Will there be a limit on the number of hours of comp time one may accumulate? Is there any limitation on when the Comp off may be used?

Review and Training– You need to ensure that you record the policy with legal help to achieve the goal within the jurisdiction. It would help if you also guaranteed that your approach is used appropriately throughout the company and the management is well-taught about it.

Compensatory Off Rules

Workers who work on public holidays are compensated by taking off the next day or through a time equal to their working hours if they come to work. The same rule applies to the workers who work on weekends, as long as they are at work.

If a public holiday or a weekly off falls on your work travel, you will be provided with a half-day Comp off. Also note that if you are traveling on a weekly off or a public holiday, it will not be taken as a working day and you will not get the Comp leave. Compensatory time is only provided for the time spent at the site or with clients.

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In all, compensatory leaves have multiple benefits. The employers get saved from paying the added overtime salaries for the benefit of improved employee efficiency. Also, the worker gains an extra day off, maintaining that professional and personal balance. In retrospect, one may say that comp leaves are surely a win-win situation where the employer and the employee are satisfied with the overall negotiation and policy rules.

You can make policies for your employees using the Truein app. The policy can be made for employees working on weekends or holidays, and they will automatically get the Comp off. You can further create the rule for overtime if the worker works for extended hours, they will get a compensatory leave.

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