For more than 30 years, public-sector employees have been able to accrue “comp time” for working overtime hours.  This alternative to paying overtime may soon be available to private-sector employers as well.

On April 5, 2017, the House Education and the Workforce Subcommittee on Workforce Protections held a hearing on a proposed legislation seeking to help workers better balance work, family, and personal needs. The Working Families Flexibility Act, H.R. 1180, would amend the Fair Labor Standards Act (FLSA) to let private-sector employers offer workers the choice of paid time off or cash wages for overtime hours.

Opponents of the proposed legislation argue that the bill would weaken overtime rights for low-income workers who are already struggling to keep pace with the economy and offers no guarantee that the promised time off actually would be made available.

Pursuant to the proposed legislation, employees would have the choice of being paid time and one-half for overtime hours as required by the FLSA, or alternatively to receive compensatory time off at the same rate. The employee would have to agree to any compensatory time-off arrangement, either via a collective bargaining agreement made on behalf of the employee, of if not represented by union, through a written or otherwise verifiable record of an agreement made before the work is performed, which is “entered into knowingly and voluntarily by such employees and not as a condition of employment.”

Provisions of the proposed legislation include the following:

  • Employees who request the use of accrued compensatory time off “shall be permitted by the employee’s employer 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.”
  • To qualify for compensatory time off, an employee must have worked at least 1,000 hours for the employer during 12 months of continuous employment before the date of agreement or receipt of compensatory time off. Employees would not be able to accrue more than 160 hours of compensatory time.
  • By January 31 each year, employers would be required to pay employees monetary compensation for any unused compensatory time off for the preceding calendar year. Employers would have the option of using a 12-month period other than a calendar year, in which case payout would have to be made not later than 31 days after the end of the 12-month period. Employers would also be able to provide monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time after giving the employee 30 days’ notice.
  • Employers also would be able to discontinue their compensatory time policy at any time upon 30 days’ notice to employees, unless a CBA provides otherwise. Employees would be able to withdraw from the agreement at any time also, but to get monetary compensation for unused compensatory time off, they would have to make a written request and the employer would have 30 days to pay.