Seyfarth Synopsis: On May 2, 2017, the House of Representatives passed a bill amending the Fair Labor Standards Act to permit private employees to choose to take paid time off instead of monetary overtime compensation when working more than 40 hours in one week. Passed along party lines in the House, the bill would still need to pass the Senate, making its future somewhat uncertain. Should the Senate approve it, the Trump Administration has already signaled its support for the bill.

The Working Families Flexibility Act of 2017

Long permitted for government employees, compensatory time off (“comp time”) is generally prohibited in the private sector. Every few years, Congress seeks to reconcile that dichotomy. This year, Rep. Martha Roby (R-AL) introduced the Working Families Flexibility Act of 2017 (H.R. 1180), which would permit an employee and their private-sector employer to agree that the employee would accept time off in the future for those hours worked in excess of 40 hours in one week, in lieu of receiving overtime premium pay in that pay period.

To illustrate, assume an employee works 50 hours in one workweek. For those 40 hours worked by the employee, the employee would receive 40 hours of pay at the regular rate. Instead of receiving 10 hours of overtime premium pay, the employee could agree to take 15 hours of paid time off at another time (i.e., one and one-half hours for each overtime hour worked). Such an agreement would necessarily mean that the employee would not receive any monetary compensation for those overtime hours worked in that pay period (at least initially).

Other provisions related to this significant amendment to the FLSA’s overtime rules include a provision capping the number of accrued comp time hours at 160 hours per employee, and requiring employers to cash out unused compensatory time on an annual basis. Also, an employer would have the option of providing monetary compensation for an employee’s unused compensatory time in excess of 80 hours, after giving 30 days’ notice to the employee. Employers would be prohibited from interfering with employees’ right to request (or not request) comp time, meaning an employer could not force an employee to agree to forego overtime premium pay in favor of compensatory time off.

H.R. 1180 Faces an Uncertain Future in the Senate

The House passed the bill largely along party lines. A similar vote in the Senate would result in passage, but the Senate’s legislative filibuster looms large. It is unclear whether there would be 60 votes to overcome the filibuster. If there are, however, private sector employees – like their government counterparts – will be able to take comp time: the Trump Administration has already publicly stated its support for the bill.

We will continue to keep an eye on any new developments about this legislation.