What does "compensatory time" (comp time) refer to?

Compensatory time, commonly referred to as "comp time," specifically relates to time off that is granted to employees in lieu of overtime pay. This practice is primarily applicable to public sector employees, where instead of receiving cash payment for hours worked beyond the standard workweek, the employee is instead awarded additional time off. This system allows employees to take paid time off at a later date, helping employers manage labor costs while still providing appropriate compensation for extra hours worked.

The concept is particularly relevant in government employment settings where budget constraints may limit the ability to provide monetary overtime compensation. By allowing comp time, agencies can offer a flexible benefit that supports work-life balance for their employees.

In contrast, the other choices relate to different forms of compensation or penalties that do not accurately define compensatory time. For instance, extra pay for working holidays refers specifically to holiday pay, bonus time for exceptional work correlates with incentive bonuses rather than time off, and time deducted from pay for unexcused absences pertains to disciplinary actions rather than compensation arrangements.