February 12, 2020

Pursuant to California Labor Code section 204.3, an employer may provide certain non-exempt employees with paid time off also known as compensatory time off (CTO) rather than pay them overtime compensation if the following elements are met:

ELEMENT NUMBER 1: The employer’s Compensatory Time Off (CTO) policy must be in writing

ELEMENT NUMBER 2: The employee must not accrue Compensatory Time Off (CTO) in excess of 240 hours. Once this limit is reached, the employee must be paid overtime compensation for any additional overtime work.

ELEMENT NUMBER 3: The employee must request CTO in lieu of overtime compensation, in writing

ELEMENT NUMBER 4: The employee must be regularly scheduled to work no less than 40 hours in a workweek. 

Compensatory Time Off (CTO) only applies to non-exempt employees who fall under the following IWC Wage Order Numbers:

  • Wage Order 2 Personal Services Industry.
  • Wage Order 4 Professional, Technical, Clerical, Mechanical and Similar Occupations.
  • Wage Order 6 Laundry, Linen Supply, Dry Cleaning and Dyeing Industry.
  • Wage Order 7 Mercantile Industry.
  • Wage Order 9 Transportation Industry.
  • Wage Order 11 Broadcasting Industry.
  • Wage Order 12 Motion Picture Industry.
  • Wage Order 15 Household Occupation.
  • Wage Order 17 Miscellaneous Employees.


OvertimeRate of Pay

Morris Nazarian

Attorney Morris Nazarian is a graduate of the University of California, Los Angeles, where he obtained his undergraduate degree, summa cum laude, in neuroscience. He serves the community of Century City and Los Angeles as an Employment Lawyer.