Only government agencies are permitted to offer compensatory time in lieu of overtime. If you are a private sector employer, you must pay overtime when an employee works over 40 hours in a workweek. (If your employee works 45 hours during one workweek, you could choose to schedule the employee for 35 hours during the following week, but that would not relieve you of the obligation to pay for the five hours of overtime during the first workweek.)
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