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Thursday, June 13, 2013

Compensatory Time and the Working Families Flexibility Act of 2013

Benjamin Collins
Analyst in Labor Policy

Gerald Mayer
Analyst in Labor Policy

On May 8, 2013, the House passed H.R. 1406, the Working Families Flexibility Act of 2013. If enacted, this bill would amend the Fair Labor Standards Act (FLSA) to allow private sector employers to provide future paid leave (compensatory time or comp time) in lieu of overtime wages.

Under current law, the FLSA requires employers to pay covered, nonexempt employees one and one-half times their regular hourly wage (“time and a half”) for any hours worked in excess of 40 in a single work week. If enacted, H.R. 1406 would give employers and employees the option to agree to replace overtime wages with one and one-half hours of paid time off for each hour of overtime worked. H.R. 1406 would not affect workers who are not presently covered by, or are exempt from, the overtime provisions of the FLSA such as many executive, administrative, and professional employees.

Under H.R. 1406, the replacement of overtime wages with comp time would be optional for both employers and employees. If an employer and an employee (or the representative of the employee) enter into a comp time agreement, either party may terminate the agreement. If such an agreement is terminated, any unused comp time would be converted to a cash payment to the employee.

Under a comp time agreement, employees would be permitted to accrue up to 160 hours of comp time. Once a year, employers would be required to convert all unused comp time to a monetary payment. Accrued comp time would also be converted to a monetary payment upon the voluntary or involuntary termination of an employee.

If enacted, the comp time provisions of H.R. 1406 would expire five years after enactment.

Date of Report: May 20, 2013
Number of Pages: 8
Order Number: R43088
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