USA How is cashed in compensatory time recorded in payroll?

[The Hag]

If a union employee has provisions for comp time in their contract and chooses to cash in a certain number of hours from their comp bank, is this income reported/recorded as overtime? For example, Bob works 4 hours beyond his regularly scheduled shift and chooses to add the time to his comp bank. In this situation the 4 hours of “overtime” are entered in his comp bank at the overtime rate of 1.5 hours for every hour worked, which is 6 hours. Now Bob decides that he will exercise his option to sell his six hours back at his regular hourly rate. Is this income recorded/reported as regular pay, other pay or overtime pay?

 

[espresso_941]

If a union employee has provisions for comp time in their contract and chooses to cash in a certain number of hours from their comp bank, is this income reported/recorded as overtime? For example, Bob works 4 hours beyond his regularly scheduled shift and chooses to add the time to his comp bank. In this situation the 4 hours of “overtime” are entered in his comp bank at the overtime rate of 1.5 hours for every hour worked, which is 6 hours. Now Bob decides that he will exercise his option to sell his six hours back at his regular hourly rate. Is this income recorded/reported as regular pay, other pay or overtime pay?

I'd think it should be recorded as a liability at overtime rate in effect when earned, not recorded 'per hour'. So say Bob makes $40/hr his overtime rate is $60/hr. The journal entry should be $60 X 4hr = $240 credit to comp bank payable or whatever you call the account.
Then make a debit when Bob exercises his option, debit comp bank payable $240.

 

[kirby]

The original post said, "he will exercise his option to sell his six hours back at his regular hourly rate". So, if the provisions for usage of comp time specify that cashing in happens at the "regular hourly rate" then the income is recorded at the regular pay RATE but hopefully in an account titled "Paid Comp Time" or something similar to distinguish it from regular pay.

 

[The Hag]

I'd think it should be recorded as a liability at overtime rate in effect when earned, not recorded 'per hour'. So say Bob makes $40/hr his overtime rate is $60/hr. The journal entry should be $60 X 4hr = $240 credit to comp bank payable or whatever you call the account.
Then make a debit when Bob exercises his option, debit comp bank payable $240.

Thank you

 

[The Hag]

The original post said, "he will exercise his option to sell his six hours back at his regular hourly rate". So, if the provisions for usage of comp time specify that cashing in happens at the "regular hourly rate" then the income is recorded at the regular pay RATE but hopefully in an account titled "Paid Comp Time" or something similar to distinguish it from regular pay.

Thank you

 

[espresso_941]

I think where it gets confusing is when managers and owners of business keep track of these things in 'hours'. I prefer to track in currency (USD, CAD etc) that avoids confusion with the value (and liability) and other regulatory compliance issues.