[Code of Federal Regulations]
[Title 29, Volume 3]
[Revised as of July 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 29CFR553.27]

[Page 286]
 
                             TITLE 29--LABOR
 
         CHAPTER V--WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR
 
PART 553_APPLICATION OF THE FAIR LABOR STANDARDS ACT TO EMPLOYEES OF 
STATE AND LOCAL GOVERNMENTS--Table of Contents
 
                            Subpart A_General
 
Sec. 553.27  Payments for unused compensatory time.

    (a) Payments for accrued compensatory time earned after April 14, 
1986, may be made at any time and shall be paid at the regular rate 
earned by the employee at the time the employee receives such payment.
    (b) Upon termination of employment, an employee shall be paid for 
unused compensatory time earned after April 14, 1986, at a rate of 
compensation not less than--
    (1) The average regular rate received by such employee during the 
last 3 years of the employee's employment, or
    (2) The final regular rate received by such employee, whichever is 
higher.
    (c) The phrase last 3 years of employment means the 3-year period 
immediately prior to termination. Where an employee's last 3 years of 
employment are not continuous because of a break in service, the period 
of employment after the break in service will be treated as new 
employment. However, such a break in service must have been intended to 
be permanent and any accrued compensatory time earned after April 14, 
1986, must have been cashed out at the time of initial separation. Where 
the final period of employment is less than 3 years, the average rate 
still must be calculated based on the rate(s) in effect during such 
period.
    (d) The term ``regular rate'' is defined in 29 CFR 778.108. As 
indicated in Sec. 778.109, the regular rate is an hourly rate, although 
the FLSA does not require employers to compensate employees on an hourly 
basis.

[52 FR 2032, Jan. 16, 1987; 52 FR 2648, Jan. 23, 1987]