Compensatory Time-off Plan (also, “time off in lieu”)

What is Compensatory Time-off Plan (also, “time off in lieu”) ?

‘Compensatory TIme-off Plan’ refers to the leave policy in which an employee is given an extra leave for working during a holiday or a weekend. It might also be provided if the employee has worked a predetermined amount of time for being eligible to get a compensatory off.

It is a way of rewarding the employee for their loyalty and dedication towards the company. However, employers should have accurate measures in place to calculate the extra hours put in by the employee. Otherwise, it might lead to complications in future that might tarnish the loyalty that the employee has for the company.

Generally, companies limit the number of compensatory off an employee can accumulate over time so that it is not misused. As there is no specific law regarding compensatory off, the companies are free to decide the mandated double pay for overtime or provide compensatory off.

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