New Legislation Proposes Employees' Choice of Comp Time in Lieu of Overtime

By: Robert D. Martin, Esq.

New legislation proposed in the United States House of Representatives seeks to offer hourly employees more choices in maintaining work-life balance. The Working Family’s Flexibility Act of 2017, H.R.1180, sponsored by the Representative Martha Roey (R-AL) amends the Fair Labor Standards Act and authorizes employers to offer employees the option to either receive time-and-a-half pay for every hour worked over forty, or to accumulate those time-and-a-half paid time off hours worked over forty to be used as paid time off (“comp time”) at some other point during the year. Like all other overtime provisions in the FLSA, this option would only apply to hourly workers who do not fall under one of the Act’s recognized exemptions.

The bill does prohibit an employee from accruing more than 160 hours of this comp time, or four weeks. In the event that the employee does not use comp time by the end of the calendar year, the employer is required to pay the original overtime that would have been due to the employees.

In the event that an employer decides to discontinue the comp time program, the employer must give employees 30 days’ notice. Likewise, the employee can withdraw from an agreement to receive comp time at any time.

The crucial point here is that the decision to take comp time in lieu of overtime pay is left solely to the employee. Employers may not force the employee to make such a determination and may not terminate an employee for deciding to take overtime pay instead of comp time.

Several private and government employers already use a comp time or flex time program for their FLSA exempt employees.

The comp time is not accrued on an hour for hour basis; rather, it is accrued on a time and a half basis. For instance, if an employee works fifty hours in a week under the act, he would be either entitled to forty hours of regular pay, and ten hours of time and a half pay, or regular hourly pay for fifty hours, and fifteen hours of comp time.

Critics of the measure say that the bill offers a false choice, in that employees would not actually have the ability to make the determination of whether to accept comp time or overtime, and that the employer reserves the right to deny use of the comp time if it would interfere with business. However, the bill explicitly prohibits employees from requiring comp time rather than overtime as a condition of employment. Furthermore, under current law, employees already have the right to approve or deny time off, with the exception of FMCA.

In this writer’s estimation, this bill balances the needs of employers and employees to bring the working environment into the 21st century without taking a hit to productivity or work-life balance. Additionally, the bill has a sunset provision which will cause the Act to expire after 5 years if it is not renewed by Congress. That way, if the act does not have the impact as planned, it can be retired without an act of Congress.

The legislation was passed the House and is awaiting a vote in the Senate.

If you are an employer and would like to know more about how the Working Families Flexibility Act of 2017 will or could affect your business, call Robert Martin at Meridian Law at 615-647-0645.