U.S. House of Representatives Passes the Working Families Flexibility Act

Last week, the U.S. House of Representatives passed the Working Families Flexibility Act— a bill that if enacted, would allow private-sector employees to receive “compensatory time” off in lieu of traditional overtime pay. The bill, H.R.1180, passed 229 to 197, largely along party lines, with all the Democrats and just six Republicans voting against it. Employers and employee alike are watching these developments closely; as they have the potential to upend the nearly eighty year status quo governing how overtime is earned and paid.

Under federal law, non-exempt employees must receive overtime pay at one-and-one-half times their regular rate of pay for each hour worked over 40 in a workweek. The proposed change would give employees a second option. If the employer and employee agree in writing, the employee can receive 1.5 hours of compensatory time for each overtime hour worked. The employee may use the accrued comp time as paid time off in subsequent weeks, so long as the “use of the compensatory time does not unduly disrupt the operations of the employer.”

The comp time would be calculated using the employee’s regular rate of pay during the week in which it was earned, or the week in which it was used, whichever is higher. Employees would be able to accrue up to 160 hours of compensatory time. Employers would be required to cash out accrued compensatory time at the end of each year and at the end of an employee’s employment.

The White House issued a statement supporting the bill, stating that it would “help American workers balance the competing demands of family and work by giving the flexibility to earn paid time off — time they can later use for any reason.” Democrats, however, strongly oppose the measure, and argue that, if enacted, the bill will work to undermine worker’s rights by significantly shifting the balance of power and leaving the decision of which type of compensation an employee receives in the hands of the employer instead of the employee.

It is unclear when the Senate will vote on the bill. We will continue to its progress and update you with new developments as they occur.