On this blog, I try not to get too political. The practice of law is complicated enough without getting involved in the political arena beyond simply reporting what has become law and how it will impact clients. But I feel compelled to do get political on this point and urge everyone, clients, potential clients and random visitors to this blog to urge Congress, specifically the Senate to pass the Working Families Flexibility Act of 2017 (text is to House version as passed).
What is this bill you may ask? Probably one of the smartest amendments to the Fair Labor Standards Act in recent or even longer memory. The bill gives private sector employers the option, along with agreement from the employee, to compensate overtime work with compensatory time rather than requiring the employer pay overtime wages. So the employee can elect to receive what is most valuable to them, time or money.
Unlike so much legislation that mandates certain actions, this bill puts the power of overtime compensation back where it belongs, in the hands of employers and employees.
Here are the key details of the bill:
- The default position will be overtime at the standard time and a half pay to be paid as wages. An employer may, but is not required, to provide comp time as an option. If the employer wants to continue to pay overtime wages, they may do so.
- Before work is performed that would be eligible for comp time, but at any time, the employer and employee can enter into a written agreement to provide the employee with comp time rather than monetary over time. The Employer cannot coerce, intimidate, require taking comp time as a condition of employment, or otherwise influence the employee’s decision. The employee can withdraw from the agreement and get unused comp time cashed out.
- Not all employees are eligible. Employees are eligible for comp time if they have worked at least 1000 hours in continuous employment over the 12 month period before electing to receive comp time. So this condition will render ineligible most seasonal works, most workers who work less than 20 hours per week on average, temporary employees, or new employees. These workers, if they work more than 40 hours in a workweek would still get overtime wages.
- The employee would receive 1.5 hours of compensatory time for each hour of overtime worked. But the employee may not accrue more than 160 hours (20 days) of comp time.
- At 80 hours of comp time accumulated, an employer can cash out the time by providing the monetary equivalent with 30 days notice so that an employee can take time off if they choose. This prevents the employee from banking a large number of comp time hours.
- By Jan 31 of each year, (or 31 days after the end of the employer’s record keeping year if different) the employer must cash out the unused comp time balance.
- Employees would request the use the comp time, subject to the employer’s reasonable policies regarding the use of paid time off.
- The comp time would supplement but not replace other paid time off that is accrued, such as vacation, sick leave, or other paid time off.
Try as I might, I can’t really find a downside to this legislation for employees. Employees would be able to choose their form of compensation. Some employees would rather have the time lost to overtime work to spend with family, friends, hobbies, or other purposes. Some employees will want the cash. Each employee should be able to choose. If and when an employee’s circumstances change, they can change from comp time to paid overtime.
For employers, the only down side is tracking the comp time and saving the money that would normally be paid in overtime pay to cover cash out requests and the fact that not everyone will make the same decision. NOTE: comp time earned in lieu of overtime pay is NOT paid time off.
All the other overtime rules appear to be unchanged, which means no employer is required to provide over time work, no employee is required to accept unscheduled overtime.
So, I encourage everyone to call the United States Senate (202) 224-3121, give them your home state and the switchboard will connect you. Alternatively, you can go here to find your Senator’s office address and phone numbers. Encourage them to support and pass this shockingly commonsense legislation. The Senate Bill is S. 801.