As predicted in our recent post about comp time Heads-Up Employers: Is comp time the wave of the future? legislation that would allow private sector employers to offer their employees compensatory time off in lieu of overtime was reintroduced in the House of Representatives last week. On April 9, 2013, Rep. Martha Roby (R-AL) introduced the Working Families Flexibility Act (H.R. 1406) that, if passed, would amend the Fair Labor Standards Act (FLSA) to permit private-sector employees to opt for paid time off (“comp time”) at a rate of at least one-and-one-half hours of compensatory time per hour of overtime pay earned.
Comp time has long been available in the public sector: Instead of being paid in cash for the overtime hours, a public sector employee is allowed to accumulate and take time off in the future with pay on the basis of 1½ hours of paid time off for each actual hour of overtime worked. To date, this type of comp time option has not been extended to private sector employers. Indeed, private sector comp time is unlawful except in certain limited situations.
Echoing the sentiments of Eric Cantor’s “Making Life Work” speech from earlier this year, Rep. Roby, chief sponsor of the bill, said in a press release: “right now the law prohibits private businesses from offering comp time options for their employees, even though it is legal in the public sector. Washington shouldn't stand in the way of an employer and an employee coming to a ‘comp time’ agreement that each is happy with.”
Just days after it was introduced, the bill was debated during a House subcommittee hearing on April 11, 2013. A list of panelists and links to their testimony can be found here.
Although similar legislation has been introduced over the years, Rep. Roby claimed that the current bill addresses some of the concerns expressed during previous congressional terms. The legislation leaves it up to the employee to decide whether or not they want comp time, and includes several employee protections to ensure that the comp time option is voluntary. For example, the bill stipulates that there must be a written agreement between the employee and employer from which the employee can withdraw and cash out accrued work time.
During the debate, supporters of the legislation touted the need for workplace flexibility:
Chairman Tim Walberg (R-MI) remarked that for nearly 30 years public sector employees have enjoyed the use of comp time off in lieu of cash wages, and that it is “only fair to extend the same benefits to millions of workers in the private sector.” He said that giving private sector employees the choice between cash wages and paid time off is “an issue whose time has come.”
Juanita Phillips, Director of Human Resources for Intuitive Research and Technology Corp, speaking on behalf of the Society for Human Resource Management (SHRM), said that the use of comp time has worked well for public employees for nearly three decades, and that permitting non-exempt private sector employees the choice of cash payments or paid time off gives them more control over their time.
Critics, however, argued that the power would really be in the hands of the employer:
Ranking member Joe Courtney (D-CT) claimed that this bill would force employees “to compromise their paychecks in order to get time off” and expressed concern that the bill does not address what happens to the accrued comp time in the event a firm goes out of business or files for bankruptcy. He also argued that tracking comp time would place an administrative burden on employers.
Likewise, Judith Lichtman, Senior Advisor to the National Partnership for Women and Families said “This legislation is based on smoke and mirrors. It pretends to offer the time off people need, when they need it, but in fact, it is a pay cut for workers without any attendant guarantee of time.”
The bill’s introduction by Republican lawmakers is likely to increase the odds that it will advance in the House this term.