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Working Families Flexibility Act - Overtime or Comp Time?

As we all know, a private employer must pay a non-exempt overtime for hours worked over 40 hours in a work week, and offering comp time in lieu of overtime is not allowed under the federal Fair Labor Standards Act (FLSA). Well, that may change with a new provision being considered by the U.S. House of Representatives as part of the “Working Families Flexibility Act of 2017.”

If passed, the bill would allow all eligible non-union employees to enter into a compensatory-time agreement “knowingly and voluntarily… and not as a condition of employment” and “affirmed by a written or otherwise verifiable record.” In order to become eligible, an employee must have worked at least 1000 hours during 12 months of continuous employment. Unionized employees could implement a policy in their collective bargaining agreement. Under the proposal, rather than being paid overtime, employees would earn compensatory time at the rate of 1.5 hours per hour worked over 40 in a work week. The bill also contains the following provisions:

  • The amount of comp time accrued will be capped at 160 hours
  • Unused comp time must be paid out annually at the rate of time and one-half the employee’s regular rate of pay by January 31st of each year by the employer, within 30 days of receiving an employee’s written cash-out request, or when a worker’s employment ends for any reason.
  • With 30 days of notice, an employer may cash out an employee’s accrued comp time that is in excess of 80 hours
  • Prohibits retaliation against employees for opting either in or out of a comp time program
  • Employees are entitled to use comp time “within a reasonable period,” excepting if the employer deems it would “unduly disrupt” operations

Proponents of the bill point to the fact that for more than 30 years, public-sector employees have been able to accrue compensatory time for working overtime hours. They argue that it isn’t fair that private sector workers are not afforded he same freedom and flexibility to choose what is best for them and their families.

There are, however, those who oppose the measures presented in this bill. Vicki Shabo, Vice President of the National Partnership for Women and Families said “the so-called Working Families Flexibility Act… will harm rather than help America’s working families. People today are struggling to meet their job and family obligations, to make ends meet and to save for the future. For most people, there is no ‘either-or choice’ to me made between time and money. Both are absolutely critical to survival, security, and the pursuit of better opportunities.”

Opponents also point to the piece of legislation giving employers the right to deny use of accrued comp time if it would “unduly disrupt” business operations. Representative Mark Takano (D-Calif.) issued statement saying, “The bill gives employers the right to deny low-income workers the overtime pay they’ve earned, while giving their employees nothing but vague promises in return.”

Analysts believe that if the bill is passed, the U.S. Department of Labor will almost assuredly issue extensive recordkeeping requirements for employers regarding the tracking of accrued comp time and when balances must be (or may be) cashed out.

The bill is intended as a test pilot program, and would expire automatically 5 years after its enactment.