Hello,
I work at a public library that gives comp time for hours worked over 37.50 in a week. Comp time is computed as 1.5 times hours worked over 37.50. We also pay out in .25 increments. the problem arises when an employee works .25 hours over, and accrues .375 hours in comp time. They use .25 of comp time, and have a balance of .125 sitting in their file. we used to have a horrible boss, who saw no problem with this, but have recently come up with paying out anyone who has less than a .25 balance of comp time at the end of the calendar year.

Are there any legalities in an employee not being able to "exhaust" their comp time in a timely fashion?

I'm thinking of trying to pay out every quarter instead.

We used to "round up" comp time to quarter hours, but there arose the problem of people earning more time than they earned with public money.

Thanks,

Why not pay it out monthly or every other month? Unless your municpal regulations or union agreement say otherwise you don't have to allow it to be comp time, you can opt to just pay it.

I'm unsure why you are allowing employees to earn comp time and paying it/accruing it after 37.5 hours. The law only requires it after 40. Legally, those hours between 37.5 and 40 could be at straight time. If you are concerned about the taxpayer's dollars, that would be a logical place to make adjustments.