May 25, 2017

Is time off more important than money to your employees?

Urban lore suggests that employees seeking better work-life balance prefer additional time off to extra money. True or not, Congress is working on legislation to amend the Fair Labor Standards Act to allow eligible employees to choose overtime pay or additional time off.

Under the proposed Working Families Flexibility Act, which passed the House of Representatives on party lines, 229-197, on May 2, hourly employees who work more than 40 hours in a workweek could bank up to 160 hours of compensatory time in a year, earned at a rate of 1.5 hours for each hour worked. Employees would be given the choice whether to accrue compensatory time or receive overtime pay. Compensatory time off in lieu of overtime pay already is available to public sector employees. Proponents of the bill believe it gives private sector employees more flexibility.

It is important to emphasize that employees will not lose the overtime pay if they cannot use the banked time by the end of the year. Employers would then be obligated to pay out any unused banked time. Employers could deny an employee’s request to use banked time based on business requirements. In addition, employees, with 30 days’ notice, can elect to have some or all the banked time paid out. 

It is unclear what fate this measure will have in the Senate. Many Democratic senators dislike the bill, despite it having anti-coercion provisions, contending it gives employers too much power. They also believe it presents a false choice between time and money when working families actually need assistance with both. A similar version of this bill passed the House in 2013 but it failed in the Senate.

Chuhak & Tecson’s employment lawyers will keep you informed of future developments regarding the fate of this legislation. 

This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.

Client alert authored by: Jeralyn H. Baran, Principal

This alert originally appeared in the May 2017 Employment Focus newsletter.