What is Compensatory off?

Definition

Compensatory off is a substitute day of rest granted to an employee who worked on their weekly off or on a holiday, given instead of, or sometimes alongside, extra pay.

How it works

The point of a compensatory off is that the rest is preserved rather than sold. Policies usually put an expiry on it, because an accumulated pile of comp offs is an unfunded liability that surfaces when several people take them at once.

What it means in India

Where an employee is required to work on a day of rest, the applicable state Shops and Establishments Act or the Factories Act 1948 may require a substituted holiday within a specified window, and separately overtime provisions may require payment at the statutory rate. A compensatory off does not automatically discharge an overtime obligation, so check what the applicable act requires rather than assuming one substitutes for the other.

What people get wrong

• Assuming a comp off replaces overtime pay. The two arise under different provisions.
• Granting comp offs with no expiry and no record, then discovering the accumulated balance during a busy month.

Terms this one depends on

More on leave

Where this shows up in practice

Almost everything on this page ends up as a line on a payslip or a figure in a register. Shiftelio keeps attendance, leave, salary structure and the statutory deductions in one place, so the number in the letter and the number in the payslip come from the same record.