The U.S. Equal Employment Opportunity Commission’s (EEOC) practice of giving time off to employees who worked extra hours was insufficient for some employees, an arbitrator ruled.

The long-running dispute stemmed from a grievance filed by the National Council of EEOC Locals No. 216, AFGE, AFL-CIO, protesting the EEOC’s reclassification of certain investigators and mediators from non-exempt to exempt status under the Fair Labor Standards Act (FLSA) after a study by an outside consultant. The arbitrator issued an earlier, interim decision returning all but one group of employees to non-exempt status.

At issue in this decision was whether the EEOC had “suffered and permitted” employees in non-exempt positions to work overtime without offering employees a choice between extra pay or compensatory time. The EEOC says that the arbitrator agreed with the commission’s position with respect to those working a flexible schedule, but determined, however, that most other investigators, mediators, and paralegals in non-exempt status should have been offered the option of extra pay rather than just compensatory time.

“The EEOC offered compensatory time off to any employee who worked extra hours, but the arbitrator found that practice was not enough to satisfy the Fair Labor Standards Act,” Acting EEOC Chairman Stuart J. Ishimaru said. “EEOC employees work a variety of flexible schedules which contributed to the arbitrator’s factual finding. Going forward, the agency will examine its overtime practices and make any necessary changes. We want to do overtime right.”

Only public-sector employers can offer employees compensatory time. Compensatory time allows employees to take paid time off instead of being paid the overtime premium. Under President George W. Bush, legislation was proposed that would have extended compensatory time to the private sector, but that legislation never made it out of Congress.