If you are a private employer, it is 100 percent illegal for you to provide employees comp time in lieu of overtime for hours worked by non-exempt employees over 40 hours in a work week. If a non-exempt employee works overtime, you must pay them overtime, and you violate the FLSA if you provide comp time in its place.
The Working Families Flexibility Act introduced earlier this year in Congress, seeks to change this rule.
If enacted, the bill would enable employees to earn compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation would otherwise be required. It also:
- Caps the amount of comp time an employee may accrue at any given time at 160 hours.
- Requires that employers annually pay out any unused comp time.
- With 30 days’ notice, permits employers to pay out any unused comp time in excess of 80 hours.
- Provided for payment of unused comp time upon termination of employment for any reason.
- Prohibits retaliation.
- Gives employers the flexibility to schedule requested time off within a reasonable amount of time after it is requests, such that operations are not disrupted.
Critics argue that this bill is a “scam” and “phony”:
Workers may request the time for any purpose they like, including care for a sick child or even baseball opening day. There’s just one hitch: the boss may decide an absence that particular day would “unduly disrupt” business operations and specify an alternative date when the child happens to be well and in school and the World Series has come and gone. Flexibility often is a one-way street. … There are a few other drawbacks. When overtime assignments come around, workers get to choose which option they prefer, pay or comp time. But the boss also gets to make the assignments. Those who need overtime to pay the bills may well be passed over. For them, this bill represents a pay cut.
That argument missed one key piece of the legislation — the decision to choose comp time in lieu of overtime rests solely with an employee.
An employer may provide compensatory time to employees … only if such time is provided in accordance with a [written] agreement arrived at between the employer and employee before the performance of the work … (i) in which the employer has offered and the employee has chosen to receive compensatory time in lieu of monetary overtime compensation; and (ii) entered into knowingly and voluntarily by such employees and not as a condition of employment.
In other words, if an employee values overtime over comp time and would rather have extra money instead of extra time off, then the employee chooses overtime. If an employee, like many these days, prefers flexibility and work/life balance, then the employee chooses comp time. What is the harm? Where is the lack of flexibility? Where is the pay cut?
” and (ii) entered into knowingly and voluntarily by such employees and not as a condition of employment.”
Many, many employees will have no way to ‘prove’ if they were passed over for OT because they would choose pay rather than comp time, and could be subject to retribution if they tried. Much like harassment cases, cases concerning pay inequity, etc., the reality for the vast majority of workers is not the text-book ideal.