House Passes Comp Time Bill

May 08, 2017

The U.S. House of Representatives passed the Working Families Flexibility Act (WFHA), which proponents see as giving employees the highly valued option of taking comp time instead of overtime pay.

The White House has signaled its approval of the WFHA, saying in a Statement of Administration Policy that it “would help American workers balance the competing demands of family and work by giving them flexibility to earn paid time off—time they can later use for any reason, including family commitments like attending school appointments and caring for a sick child.” The Trump Administration also said that the bill “contains critical protections to ensure employees can continue to choose overtime pay and to prohibit employers from coercing their employees to accept compensatory time instead of overtime pay.”

Republican proponents have asserted that the WFHA would amend the Fair Labor Standards Act (FLSA) to “modernize the law and better meet the needs of the 21st century workforce.” They see the WFHA a “pro-family, pro-worker proposal” that includes reforms such as letting employers offer employees a choice between cash wages and accruing comp time for overtime hours worked. No employee could be forced to take comp time, they point out.

Specifically, the WFHA would permit employees to accrue up to 160 hours of comp time each year. An employer would be required to pay cash wages for any unused time at the end of the year. Workers would be free to “cash out” their accrued comp time whenever they choose to do so.

What do employees really get?

Opponents have stressed that while the WFHA states employees are free to choose whether to accept comp time, the legislation makes it more likely that employers will assign overtime to workers who accept comp time, and less likely that a worker who needs overtime pay will be able to get it.

Another aspect of the WFHA that opponents do not like is its provision that employees must be permitted to use comp time “within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.” A section-by-section analysis points to the significant litigation in the public sector over when an employee may use comp time. Some courts have held it reasonable for an employer to deny the use of comp time for up to one year. That means that an employee who wants comp time to care for a sick child, to address her own health needs, or for any other reason that requires taking time off on a specific date has no real assurance that she will be able to take time off when she needs it.

Moreover, while the WFHA permits an employee to accrue up to 160 hours of comp time, an employer can decide unilaterally to provide monetary compensation for up to 80 of those hours. In addition, on January 31 of each year, the employer must provide monetary compensation for the employees’ unused compensatory time off accrued during the preceding calendar year, unless the employer designates a different 13 month period as a payout deadline instead of a calendar year. Since employers must compensate employees for any unused comp time at the end of the designated 13-month period, this means in practice that employees who want to use their comp time will have to do so before it expires.