New bill would allow private employers to offer time off in lieu of extra pay

The legislation, which would amend the Fair Labor Standards Act, will likely face Democratic opposition in the Senate

A new bill that Republicans proposed in April would give private sector employers the same flexibility with regard to overtime compensation that public employers currently enjoy. The Working Families Flexibility Act—not to be confused with the earlier Democratic bill of the same name (see “Name Game”)—would amend the Fair Labor Standards Act to allow private employers to offer compensatory time off to employees who work extra hours instead of giving them overtime pay. Public employers already have this option.

This policy would be optional and would have to be agreed upon by both companies and employees (or the unions that represent them). For each hour of overtime worked, companies would give 1.5 hours of compensatory time, up to 160 hours total comp time per year. Employers would then pay the value of any comp time not taken at the end of a 12-month period within 31 days.

Business Benefits

The ability to offer compensatory time in lieu of money would be a useful tool to help employers manage their cash flow. Large projects that require employees to work a lot of overtime wouldn’t necessarily have a huge price tag attached if workers could just take some time off when the project is over. Comp time also provides a huge advantage for seasonal employers.

Join the Conversation

Advertisement. Closing in 15 seconds.