House Republicans recently introduced a bill that would allow employees to receive paid time off instead of overtime pay under the Fair Labor Standards Act. The legislation, called the Working Families Flexibility Act of 2017 (which you can find by clicking here), was introduced earlier this month, and appears to have broad support among Republicans, meaning that it has a good chance of becoming law.
Currently, the Fair Labor Standards Act requires employers to provide certain employees with overtime pay, equal to 1.5 times their regular hourly salary, for every hour worked over 40 in a week. The Working Families Flexibility Act would permit employees to take paid time off instead of receiving increased hourly wages as overtime compensation. Importantly, this law would only apply to private sector employees.
The bill would permit employees to receive 1.5 hours of paid time off for every hour of overtime worked. So, if an employee worked 50 hours in a week, he or she would be eligible to receive 15 hours of paid time off (i.e. 10 hours of overtime work x 1.5=15 hours of paid time off).
Employers and employees would both have to agree to this arrangement before the overtime work is performed for it to take effect. Employees would have to agree knowingly and voluntarily, and participation cannot be a condition of employment. Both employers and employees can choose to stop participating if they give the other 30 days’ notice.
An employer must permit an employee to use this paid time off “within a reasonable period” after the request as long as doing so does not “unduly disrupt the operations of the employer.” Employees can accrue up to 160 hours of paid time off each year. If an employee leaves, then the employer must pay the employee 1.5 times his or her regular hourly rate for any unused time off. Any paid time off not taken by the end of the year must also be paid out at a rate of 1.5 times the employee’s regular wage.
Personally, I am having trouble finding anything to dislike about this bill. No one will be forced to receive paid time off in lieu of overtime pay, so I do not think that the this bill would infringe upon employer or employee rights. I am sure that many employees would love more time off, and employers may be more motivated to provide overtime pay if they know that it will not increase their costs. Do you agree? Let me know if there could be negative consequences to this law that I might not have taken into consideration.