Our friends in the public sector have long benefited from providing employees “comp time” in lieu of paying overtime. In short, instead of paying employees overtime after 40 hours in a week, they give the employee 1.5x the number of hours of overtime in a bank to be used at a later time, much like vacation or PTO is used. My friends, this could be coming to your private-sector workplace soon.
Yes, Congress passed the Working Families Flexibility Act of 2017 (HR 1180) last week. I know what you are thinking – the House passed 2 bills? In the same week? That’s right, it’s not all about healthcare reform on Capitol Hill…
In all seriousness, if this makes it through the Senate, there are very good chances that President Trump would sign the bill. While this isn’t a slam dunk, it moves the proposed legislation past 99% of the other bills that have been proposed thus far. So let’s break it down and understand the bill a little more.
Would we have to provide comp time to our employees? No, employers can choose not to offer this to employees or offer to only certain classifications of employees. But if you would offer it to employees, only those that work at least 1,000 hours in the past 12-month period could participate.
Are employees required to choose comp time instead of being paid out overtime? No. Employees would have to enter in an agreement “knowingly and voluntarily” that is not a condition of employment. It’s a good idea to get this in writing. Absent an agreement, the default is that the employee is paid overtime. And any time the employee wants to change their mind, they can opt out of the agreement again (though employers would have to 30 days to make the change).
Is there any limit? Yes, employees could only receive up to 160 hours of comp time.
Can an employee cash out comp time? Yes, at any time the employee can ask for the bank of time to be cashed out and an employer would have to comply within 30 days of the request. Similarly, the employer can choose to cash out comp time at any point that the bank exceeds 80 hours (by providing 30 days’ notice). In addition, the employer would have to automatically cash out any unused comp time from the prior calendar year by January 31 each year.
SHRM believes that providing this option to employers would give more workplace flexibility to employees. Does this sound good to you? Would you love to give your employees the choice of comp time instead of paying overtime? Or maybe you think this is a terrible idea? Tell your Senators! Call or email Tammy Baldwin or Ron Johnson today. Tell them your story and make an impact for all employers.