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Working Families Flexibility Act: Choice between overtime pay or unguaranteed time off

April 6th, 2017  |  Pamela Wolf

On April 5, the House Education and the Workforce Subcommittee on Workforce Protections held a hearing on what proponents say is a commonsense proposal that would help Americans better balance work, family, and personal needs. The Working Families Flexibility Act, H.R. 1180, would amend the FLSA to let private-sector employers offer workers the choice of paid time off or cash wages for overtime hours. But those who oppose the measure argue that the bill would weaken overtime rights for low-income workers who are already struggling to keep pace with the economy and offers no guarantee that the promised time off actually would be made available.

Brief tour of the bill. Under H.R. 1180, employees would have the choice of being paid time and one-half for overtime hours as required by the FLSA, or compensatory time off at the same rate. The employee would have to agree to any compensatory time-off arrangement, either via a collective bargaining agreement made on behalf of the employee, of if not represented by union, through a written or otherwise verifiable record of an agreement made before the work is performed, which is “entered into knowingly and voluntarily by such employees and not as a condition of employment.”

Use. Employees who request the use of accrued compensatory time off “shall be permitted by the employee’s employer to use such 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.”

Accrual. Employees would not be permitted to agree to or receive compensatory time off unless they have worked at least 1,000 hours for the employer during 12 months of continuous employment before the date of agreement or receipt of compensatory time off. Employees would not be able to accrue more than 160 hours of compensatory time.

Unused comp time. By January 31 each year, employers would be required to pay employees monetary compensation for any unused compensatory time off for the preceding calendar year. Employers would have the option of using a 12-month period other than a calendar year, in which case payout would have to be made not later than 31 days after the end of the 12-month period. Employers would also be able to provide monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time after giving the employee 30 days’ notice.

Withdrawal. Employers also would be able to discontinue their compensatory time policy at any time upon 30 days’ notice to employees, unless a CBA provides otherwise. Employees would be able to withdraw from the agreement at any time also, but to get monetary compensation for unused compensatory time off, they would have to make a written request and the employer would have 30 days to pay.

Good or bad for workers? As is often the case, there is disagreement about whether the measure would serve the best interests of workers. Proponents pointed out that for more than 30 years, public-sector employees have been able to accrue “comp time” for working overtime hours. But outdated federal rules prevent private-sector workers from receiving the same flexibility. “This simply isn’t right, and it isn’t fair,” said Subcommittee Chairman Bradley Byrne (R-Ala.) at the hearing. “Private-sector workers should be afforded the same freedom to do what’s best for themselves and their families. For many Americans working paycheck to paycheck, earning extra overtime pay is the choice that’s best for them. But the federal government shouldn’t assume that’s the best choice for all workers.”

Subcommittee Democrats, see it differently, though, suggesting that instead of paying workers for their overtime work, H.R. 1180 would let employers pocket employees’ overtime pay in return for a vague promise that employees may be able to take compensatory time off at some point in the future.

“This bill ought to be named the Betrayal of Working Families Act because it once again violates the Trump administration’s promise to empower vulnerable Americans,” Subcommittee Ranking Member Mark Takano (D-Calif.) said in a statement. “The bill gives employers the right to deny low-income workers the overtime pay they’ve earned, while giving their employees nothing but vague promises in return. At a time when there is so much this Committee can do to support working families, it is disappointing that we are even considering legislation that would take us in the opposite direction.”

Parity and flexibility. One invited witness pointed to the parity between government workers and private employees, as well as the flexibility that H.R. 1180 would provide. “Many Wellstone employees work side-by-side with Huntsville Police Department officers, who do benefit from the option of receiving overtime pay or comp time,” said Leslie Christ, chief resource officer of an Alabama nonprofit focused on behavioral health. “It is difficult for employees to understand why the rules are different for public or governmental agencies when they work so hard for our community.”

Christ went on to explain how hard it was to inform an expectant mother that she couldn’t accrue comp time. “She incurred significant overtime and asked me if she could ‘waive’ the overtime to ‘credit’ her that time … I had to explain to her that we were unable to do so because it was against the law,” Christ said. “It was difficult conveying this message to this single mom-to-be, who felt she should be allowed the option to choose for herself whether to take the overtime pay or paid leave when her child was born.”

Crystal Frey, vice president of human resources for a Maryland real estate business, shared how comp time would help employees juggling school, family, and work. “I was recently approached by a non-exempt leasing consultant who was facing numerous life-changing events at one time, including the birth of her child, her upcoming marriage, and the completion of her college degree … If comp time had been an option available to her, I believe it would have given her even more access to paid leave.”

Urging Congress to pass the Working Families Flexibility Act, Frey said, “It is troubling that Congress has not yet extended this same benefit to hardworking private-sector employees. In the 21st century workplace, it’s time to give private-sector non-exempt employees the opportunity to choose for themselves whether to receive cash wages or paid time off for working overtime.”

Built-in protections. While opponents say the bill lacks necessary worker protections, Leonard Court, a labor attorney with years of experience, reminded members, “The bill is carefully drafted to ensure that employees retain maximum flexibility in being able to choose whether to take the comp time option, whether to continue exercising it, when they may seek a cash-out of their banked time, and to protect them from any coercion or undue influence from the employer as to whether they exercise the comp time option.”

Court added, “The Fair Labor Standards Act’s 40-hour workweek as the threshold for earning overtime compensation remains totally untouched.”

Christ explained how the bill puts workers in control. “If an employee opted to participate in a comp-time arrangement but later realized that overtime pay was a greater need, the employee would have the right to discontinue participating in the comp time program after given written notice,” Christ said.

Smoke and mirrors? Not everyone sees the bill as pro-worker. Vicki Shabo, Vice President of the National Partnership for Women and Families, testified about the legislation’s impact on workers. Speaking in opposition to H.R. 1180, Shabo said “the so-called Working Families Flexibility Act … will harm rather than help America’s working families. People today are struggling to meet their job and family obligations, to make ends meet and to save for the future. For most people, there is no “either-or choice” to be made between time and money. Both are absolutely critical to survival, security, and the pursuit of better opportunities.”

Shabo said there is no question that working people and families need updated workplace policies and higher wages, noting also that in some cities and states, successful policies are in place to offer just that. “Unfortunately, H.R. 1180 would do the opposite. This legislation is based on smoke and mirrors,” she said. “It pretends to offer the time off people need when they need it but, in fact, it offers a pay cut for workers without any attendant guarantee of time. It also sets up a dangerous, false dichotomy between time and money when, in fact, working families need both.”

“Quite simply, H.R. 1180 would be a step in the wrong direction for approximately 59 million hourly, full-time workers as well as for salaried, non-exempt workers who are eligible for overtime pay,” Shabo continued. “Instead of providing working people and their families with the time off and the financial stability they need to care for themselves and their loved ones, this ‘flexibility’ bill offers forced choices and false promises.”

Bills that would not trade pay for time off. Subcommittee Democrats noted that several concrete solutions that would strengthen wage and hour laws rather than weaken them already have been offered. For example, the Healthy Families Act, Schedules that Work Act, and the Family and Medical Insurance Leave Act would provide families with paid time off from work and fair schedules without forcing workers to forfeit overtime pay or work excessive hours to spend time with their families.

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