House of Representatives Passes Working Families Flexibility Act of 2017 - Focus on Paid Overtime vs. Compensatory Paid Time Off
On May 3, 2017, the U.S. House of Representatives passed H.R. 1180, dubbed the Working Families Flexibility Act of 2017 (the “Act”), that would give employers and employees the ability to agree to compensate the employee compensatory paid time off instead of monetary compensation for overtime hours worked.
Currently, the Fair Labor Standards Act (“FLSA”) only allows employers to compensate its employees for overtime hours worked by paying the employee 1 ½ times the employee’s regular rate of pay. This rigid requirement at times may strain an employer’s resources, even when the overtime work may be needed. The Working Family Flexibility Act of 2017 would allow the option of compensation through paid time off at a rate of not less than 1 ½ hours for each hour of employment for which overtime compensation is required under the FLSA.
This opportunity would only be allowed if negotiated into a collective bargaining agreement or, in the case of an employee who is not represented by a labor organization, by written agreement between the employer and employee. Further, this option would only be available to full-time employees who have worked for the employer for at least one year.
An employee may accrue not more than 160 hours of compensatory time under the Act’s provisions. The Act would give employees the ability to use the compensatory time within a reasonable period after making the time off request as long as its use does not unduly disrupt the operations of the employer.
Allowing employers to have the flexibility to offer non-monetary forms of overtime compensation will undoubtedly alleviate the financial burden many employers may face when deciding whether to allow an employee to work overtime. Ultimate enactment of the bill would bring immediate relief desperately needed by employers.
President Trump has indicated that he will sign the bill into law if it comes across his desk. The next step is for the U.S. Senate to consider this legislation.
For the full text of the Working Families Flexibility Act of 2017, click here.