June 27, 2022

Volume XII, Number 178

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June 24, 2022

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House Passes Bill To Allow Private Employers To Offer Paid Time Off In Lieu Of Overtime Time Pay

On May 2, 2017, the House passed H.R. 1180, The Working Families Flexibility Act of 2017, which would allow private employers to offer paid time off, also known as “comp time,” instead of time-and-a-half wages for overtime hours. Congress had previously amended the Fair Labor Standards Act in 1985 to allow public-sector employees to be given comp time instead of pay for overtime hours worked.

The bill would amend the Fair Labor Standards Act to allow private employers and eligible workers (those that have worked at least 1,000 in the preceding 12 months) to voluntarily agree to 1.5 hours of compensatory time for every hour of overtime worked, for up to 160 hours of compensatory time per year. The requested time would have to be approved by the employer.

The bill provides that no later than January 31st of each calendar year, the employer will provide monetary compensation for any unused compensatory time off accrued during the preceding calendar year that was not used prior to December 31. An employer may provide monetary compensation for an employee’s unused compensatory time in excess of 80 hours at any time after giving the employee at least 30 day notice. Compensation is provided at not less than the regular rate earned when the compensatory time was accrued, or the regular rate earned by such employee at the time such employee received payment of the compensation, whichever is higher. The proposed bill includes provisions that would allow workers to cash out their comp time if they leave the job.

The House passage of the bill for private industry also comes as the Obama administration rule to expand overtime eligibility is on hold nationwide, pending federal litigation in Texas. That rule would double the salary threshold—up to about $47,500—below which workers automatically qualify for time-and-a-half overtime pay.

The bill now heads to the Senate, where some Democratic support is needed to keep it from stalling as it has in past years.

© Copyright 2022 Squire Patton Boggs (US) LLPNational Law Review, Volume VII, Number 124
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About this Author

Meghan E. Hill Labor & Employment Attorney Squire Patton Boggs Columbus, OH & New York, NY
Partner

Meghan Hill’s clients benefit from her holistic approach and ability to incorporate their goals and objectives when working to prevent and solve employment law problems. Meghan’s big-picture view allows her to understand all ramifications employers face when dealing with issues, as well as identify broader issues outside of employment. Meghan works with numerous diversified industrial companies and has a growing healthcare client base.

Meghan regularly represents companies in complex litigation and wage and hour collective and Rule 23 class actions in federal courts, including...

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