What term describes an agreement where an employee receives time off with pay for working extra shifts?

The term "compensated absences" refers to a policy that allows employees to earn paid time off for various reasons, including working extra shifts. This encompasses various types of leave, such as vacation, holidays, sick leave, and, importantly in this context, the additional time off provided as compensation for the extra hours worked. This arrangement is beneficial for both employees and employers as it acknowledges the employee's extra effort while also providing them with valued time away from work.

The other options do not adequately define this specific arrangement. Gain-share typically relates to profit-sharing schemes, premium pay refers to extra earnings for particular shifts or hours worked rather than time off, and flex-time usually means a flexible work schedule rather than compensated time off. Therefore, compensated absences is the most fitting term to describe this scenario.