A Republican proposal to allow private employers to offer employees compensatory time off in lieu of paying overtime at time–and–a–half their regular rate has been approved by the U.S. House of Representatives and next moves to the Senate for consideration. The “Working Families Flexibility Act of 2017’’ (H.R. 1180) would amend the Fair Labor Standards Act (FLSA) to enable nonunionized private-sector employers to offer non-exempt employees the opportunity to voluntarily agree, in writing, to accrue 1.5 hours of comp time for each overtime hour worked, with a cap of 160 hours. Currently, the FLSA requires that covered private sector employers pay overtime for hours over 40 each week, unless employees are exempt under one of the FLSA’s recognized exemptions. The FLSA already permits public sector employers to offer comp time in lieu of overtime.
To enter into such an arrangement, employees would have had to work at least 1,000 hours in the previous 12 months. Employees would be permitted “to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.” Employers, on the other hand, would be required to pay monetary compensation for accrued, unused comp time: (i) at the end of each year (on or before January 31); (ii) within 30 days of the employee’s written request; or (iii) at the end of an employee’s employment. Additionally, employers would, upon 30 days’ notice, be able to: (i) pay “monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time”; and (ii) discontinue their comp time policies.
Proponents of the bill have argued that it will give employees more flexibility and assist employees in maintaining work-life balance, while opponents have argued that it undermines the fundamental worker protections of the FLSA.
In order to become law, the measure would need to attract a filibuster-proof majority (i.e., at least eight Democratic votes). To date, Democrats have strongly opposed the measure – no House Democrats voted for it – making it unlikely to become law in its current form. Even if it is passed, the Act would need to be reauthorized in five years following a study by the General Accounting Office on employer usage, employee complaints, and enforcement actions.
Absent the passage of similar state laws, the bill, if enacted, might have limited practical impact in states with minimum wage and overtime laws that do not permit the substitution of comp time for overtime. Employers in such states would still be required to pay time-and-a-half for all overtime hours worked.
Akerman attorneys will continue to monitor any developments with this bill and will provide updates if it makes its way through the Senate.