On May 2, 2017, the United States House of Representatives passed H.B. 1180, the Working Families Flexibility Act. The Senate has received the bill for consideration. The bill would amend the Fair Labor Standards Act (FLSA) and authorize private employers to provide compensatory time (comp time) off for overtime hours worked by employees. Instead of being compensated by cash wages for working overtime hours, employees would have the option to apply overtime hours to paid time off. For example, if an employee worked 45 hours in a work week, the employee could either choose to be compensated for the 5 hours of overtime or could apply those 5 hours as comp time for later use. Each hour of comp time would be banked at an overtime rate, which would equal 7.5 hours of comp time in this example.
In order for the Act to apply, there must be a written agreement between the employer and employee permitting the employee to apply overtime hours to comp time. For a unionized workforce, a collective bargaining agreement would have the same effect. Any agreement under the Act must be revocable by the employee at any time and employers are permitted to discontinue comp time programs after 30 days’ notice.
Employees must have worked at least 1,000 hours for their employer during a continuous 12-month period to be eligible for a comp time program. Under the Act, employees may only accrue 160 hours of comp time. The bill requires employers to provide monetary compensation for any unused comp time accrued at the end of each year or upon termination of an employee. While employers have the option to payout any accrued comp time that exceeds 80 hours after giving an employee 30 days’ notice, employees may exercise the option to be compensated for any of their accrued but unused comp time at any time. Employers would be granted 30 days to make the requested payments.
The bill prohibits an employer from intimidating, threatening, or coercing an employee in order to: (1) interfere with the employee’s right to request or not to request compensatory time off in lieu of payment of monetary overtime compensation, or (2) require an employee to use such compensatory time. The bill also provides for liquidated damages for any employer violations. In addition, employees would be granted a private right of action to directly sue their employers under the Act.
If the bill passes the Senate, the White House has indicated that the President would sign the bill. If it becomes law, it would likely affect a large amount of employers in the private sector. Employers in Kansas should be mindful of the proposed amendment to the FLSA and how it could impact their businesses. The employment law attorneys at Joseph, Hollander & Craft can provide guidance on complying with the FLSA and advise on the pros and cons of offering comp time programs.