The House of Representatives passed at least two notable measures last week. You probably heard about the new healthcare legislation, but you may not have heard about the Working Families Flexibility Act (WFFA). Though Republican representatives were not invited to a celebration in the Rose Garden following its passage, employers need to keep an eye on the WFFA. If enacted, the WFFA would allow employers to offer employees who work overtime the choice of paid time off or time-and-a-half pay as compensation. The act would require employers to continue offering traditional overtime pay; a PTO option would simply become a legal alternative that the employee could choose.

Quick FLSA Refresher

Last year at this time, we were preparing for significant changes to the salary threshold requirement for the Fair Labor Standards Act’s (FLSA) white collar exemptions. While a Texas district court ultimately struck down those changes at the end of 2016, one benefit to that process was that many employers brushed up on the FLSA’s overtime requirements. In case you did not, though, here is a quick refresher on the basics:

  • The FLSA generally requires covered employers to pay nonexempt employees minimum wage (currently $7.25 per hour) and time-and-a-half compensation for hours worked over 40 in a workweek.
  • Covered employers (almost everybody) are employers engaged in interstate commerce or whose annual gross volume of sales or business is $500,000 or more.
  • There are a number of exemptions, and you should look closely at an employee’s duties and compensation to ensure that he or she meets all of the requirements to fall into that exemption. An employee is not exempt simply because he or she is salaried.

WFFA Chances of Passing

The WFFA serves as a reminder that offering additional PTO, sometimes called “comp time,” is not currently a lawful form of overtime compensation for private employers. The requirement for time and a half for hours over 40 in a workweek will stand unless the Senate also passes the WFFA, and that may be a longshot. All 52 Republican Senators as well as eight Democrats must vote for the act to avoid a filibuster. The act did not have unanimous Republican support in the House, and it is unlikely to garner unanimous support in the Senate. Republican Congressmen have introduced similar measures on several occasions over the years, most recently in 2013, but none has passed both chambers to change the overtime pay requirements. We will keep you posted.