Section 7(o) provides as follows:
(o)(1) Employees of a public agency which is a State, a political
subdivision of a State, or an interstate governmental agency may
receive, in accordance with this subsection and in lieu of overtime
compensation, compensatory time off at a rate not less than one and one-
half hours for each hour of employment for which overtime compensation
is required by this section.
(2) A public agency may provide compensatory time under paragraph
(1) only--
(A) Pursuant to--
(i) Applicable provisions of a collective bargaining agreement,
memorandum of understanding, or any other agreement between the public
agency and representatives of such employees; or
(ii) In the case of employees not covered by subclause (i), an
agreement or understanding arrived at between the employer and employee
before the performance of the work; and
(B) If the employee has not accrued compensatory time in excess of
the limit applicable to the employee prescribed by paragraph (3).
In the case of employees described in clause (A)(ii) hired prior to
April 15, 1986, the regular practice in effect on April 15, 1986, with
respect to compensatory time off for such employees in lieu of the
receipt of overtime compensation, shall constitute an agreement or
understanding under such clause (A)(ii). Except as provided in the
previous sentence, the provision of compensatory time off to such
employees for hours worked after April 14, 1986, shall be in accordance
with this subsection.
(3)(A) If the work of an employee for which compensatory time may be
provided included work in a public safety activity, an emergency
response activity, or a seasonal activity, the employee engaged in such
work may accrue not more than 480 hours of compensatory time for hours
worked after April 15, 1986. If such work was any other work, the
employee engaged in such work may accrue not more than 240 hours of
compensatory time for hours worked after April 15, 1986. Any such
employee who, after April 15, 1986, has accrued 480 or 240 hours, as the
case may be, of compensatory time off shall, for additional overtime
hours of work, be paid overtime compensation.
(B) If compensation is paid to an employee for accrued compensatory
time off, such compensation shall be paid at the regular rate earned by
the employee at the time the employee receives such payment.
(4) An employee who has accrued compensatory time off authorized to
be provided under paragraph (1) shall, upon termination of employment,
be paid for the unused compensatory time at a rate of compensation not
less than--
(A) The average regular rate received by such employee during the
last 3 years of the employee's employment, or
(B) The final regular rate received by such employee, whichever is
higher.
(5) An employee of a public agency which is a State, political
subdivision of a State, or an interstate governmental agency--
(A) Who has accrued compensatory time off authorized to be provided
under paragraph (1), and
(B) Who has requested the use of such compensatory time, shall be
permitted by the employee's employer to use such time within a
reasonable period after making the request if the use of the
compensatory time does not unduly disrupt the operations of the public
agency.
(6) For purposes of this subsection--
(A) The term overtime compensation means the compensation required
by subsection (a), and
(B) The terms compensatory time and compensatory time off means
hours during which an employee is not working, which are not counted as
hours worked during the applicable workweek or other work period for
purposes of overtime compensation, and for which the employee is
compensated at the employee's regular rate.
[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23, 1987]
