A new bill, called the Working Families Flexibility Act of 2017 (H.R. 1180), was introduced and passed by the House on May 2, 2017. If signed into law, the Act would amend the Fair Labor Standards Act to allow private sector employers to provide compensatory time (aka comp time) for nonexempt employees in lieu of overtime pay, an option currently available to public employers only. If signed into law, the Act would sunset (i.e., cease to be in effect) five years after the date the Act becomes law.

If providing comp time, the number of hours would have to equal at least one and one-half hours for each hour an employee worked overtime. In addition, the following conditions would apply:

  • For a nonunion employee, the employer and employee would be required to have an agreement in place before the employee performs the work. The agreement, which should be in writing, would have to specify that the employer has offered and the employee has chosen to receive comp time in lieu of overtime pay, and that the employee entered into the agreement “knowingly and voluntarily” and not as “a condition of employment.”
  • In the case of a union employee, the collective bargaining agreement would be required to include provisions allowing employees to receive comp time in lieu of overtime pay.
  • No employee (whether nonunion or union) would receive or agree to receive comp time unless the employee had worked at least 1,000 hours during a period of continuous employment with the employer in the 12-month period before the date of the agreement or receipt of comp time.

The bill caps the maximum comp time hours an employee could accrue during a calendar year at 160 hours, and it requires that an employer would have to pay out any accrued comp time not used by the end of the year no later than January 31st. In addition, unused accrued comp time would have to be paid out to an employee who terminates employment, regardless of whether the termination is voluntary or involuntary. The bill also provides that an employer would have to pay out accrued but unused comp time in excess of 80 hours at any time after giving the employee at least 30 days’ notice.

When unused comp time is paid out, it would be considered unpaid overtime compensation, and it would have to be paid at a rate not less than the higher of  the regular rate earned by the employee when the:

  • Comp time was accrued or
  • Employee received payment of the comp time

Other provisions of the bill include:

  • An employer would have to allow an employee who requests to use some of his or her accrued comp time to take the time off within a reasonable period after the request so long as doing so does not unduly disrupt the employer’s operations.
  • Except when a collective bargaining agreement provides otherwise, an employer that has adopted a policy offering comp time to employees could terminate the policy after giving employees 30 days’ notice.
  • An employee who has signed an agreement for comp time could withdraw his or her agreement at any time. In addition, an employee could request in writing at any time that his or her accrued but unused comp time be paid out. An employer would have to pay out the comp time within 30 days of receiving an employee’s written request.
  • An employer could not directly or indirectly intimidate, threaten, or coerce or attempt to intimidate, threaten, or coerce any employee to interfere with an employee’s rights to request or not request comp time off in lieu of overtime or require any employee to use his or her comp time.

The House bill passed by a vote of 229 to 197 with no Democrat voting in favor of the bill.  The Senate version of the bill (S. 801) was introduced to the Committee on Health, Education, Labor, and Pensions on April 3, 2017. Your PS&A team will keep you informed on any new developments.