Comp Time In Lieu of Overtime Pay?
Republicans in the House of Representatives made good on a long-time dream of amending the Fair Labor Standards Act (FLSA) to allow private employers to provide comp time to non-exempt employees instead of paying overtime. Something which many state and municipal governments give to employees, but which is prohibited by federal law, comp time in lieu of overtime could drastically alter employers' wage costs and the overtime calculus we have grown accustomed to these past 70+ years.
The Working Families Flexibility Act, as passed by the House, would amend the FLSA to allow employers to give employees the choice between being paid overtime wages of 1.5x the employees' regular rate of pay for all time worked over forty (40) hours per week (i.e. the current law), or offering employees the option of accruing 1.5x hours for every hour worked of overtime. Thus, the law gives employers the option of offering the swap-scheme and employees the option of taking it, versus the current situation which requires employers to pay overtime wages to non-exempt employees. As currently drafted the law would cap the amount of accrued time off per year at 160 hours. If employees do not use the time off within a year the employer would have to then pay the hours out in wages. Also, to qualify for the program employees would need to work at least 1,000 hours in the 12-month period prior to starting the comp time program.
Next stop for the Working Families Flexibility Act is the Senate, where prospects are not as rosy for passage, but it does not appear to be dead on arrival by any means. Given that this bill could alter the compensation system for most non-exempt employees in the U.S., it will be important to monitor the progress of this piece of legislation.
Thompson Coe’s Tips of the Week are not intended as a solicitation, do not constitute legal advice and do not establish an attorney-client relationship.