Private-Sector Comp Time – Don’t Count On It!

Private-Sector Comp Time – Don’t Count On It!

Compensatory time off or “comp time” is paid time off that is provided to employees instead of overtime pay.  Comp time has been used by public employers for decades.  There have been several attempts in the past to legalize comp time for private sector employers.  So far, no changes to the law have been passed.

On May 2, 2017, H.R. 1180, the Working Families Flexibility Act of 2017, passed the U.S. House of Representatives 229-197.  All Democrats and six Republicans voted against the bill.  H.R. 1180 must also pass the U.S. Senate in order to be presented to the President.  The White House Administration has already indicated that if H.R. 1180 were presented to the President in its current form, his advisors would recommend that he sign the bill into law.  However, given that at least some Democrats must vote in favor of the bill in the Senate it is unlikely that the President will ever be given this chance.

The Working Families Flexibility Act of 2017 amends the Fair Labor Standards Act (FLSA) to provide the following:

  1. Allows private-sector employers the ability to offer employees the option of selecting compensatory time off in lieu of overtime wages.
  2. Requires a written agreement between the employer and the employee to use comp time. The agreement must be entered into knowingly and voluntarily by the employee and cannot be a condition of employment.
  3. If the employee is represented by a union, the comp time agreement must be negotiated and agreed to as part of the collective bargaining agreement.
  4. Employers are not permitted to use such a comp time arrangement unless the employee has worked at least 1,000 hours in a period of continuous employment with the employer during the preceding 12-month period.
  5. Employees must be permitted to use any accrued comp time within a reasonable period after making the request if the use does not unduly disrupt operations.
  6. Employers are prohibited from intimidating, threatening, or coercing employees into agreeing to comp time in lieu of overtime wages.
  7. An employee can accrue up to 160 hours of compensatory time each year and any unused time must be paid out at the end of the year, upon written request by the employee, or at the time of termination (voluntary or involuntary).

Proponents of H.R. 1180 assert that its passage would provide greater flexibility to employer and employees because it would allow employees to have a safety net for those times when they must be off work and do not have available vacation/PTO or sick leave.  Proponents claim that the bill is pro-worker and pro-family because it provides employee with options.  Opponents of H.R. 1180 claim that its passage would erode overtime protections for employees.  Opponents emphasize that the new bill does not offer new employee rights, but provides employers with the right to delay paying overtime wages with employees being guaranteed the ability to use the accrued comp time when they need it.  The bill has been referred to the Senate’s Committee on Health, Education, Labor, and Pensions, but no hearings or votes have been scheduled.

Contributor: Jessica A. Schoendienst, Attorney at Law | Weintraub Tobin