On May 3, 2017, the U.S. House of Representatives voted to approve legislation that would allow private-sector employers to offer compensable time (more commonly known as “comp time”). The legislation, titled the Working Families Flexibility Act, passed by a vote of 229-197. The legislation now moves to the Senate for deliberation.
The Working Families Flexibility Act would amend the Fair Labor Standards Act (FLSA) to allow private-sector employers to give hourly and salary non-exempt employees an option: earn paid time off for overtime hours worked or be paid at one and a half times their regular rate of pay for time worked in excess of 40 hours in a week. This change would give private-sector employers the same flexibility as public-sector government employers.
While some have expressed concerns, supporters of the bill point to several features of the Working Families Flexibility Act that provide employees with protections against potential employer abuses:
Employee’s Choice
Whether an employee earns comp time or is paid overtime, is up to the employee. Under the Working Families Flexibility Act, employers could not force their employees to take comp time in lieu of overtime compensation. It is the employees’ option. If an employee prefers to receive a larger paycheck rather than additional paid time off, the employer must pay the employee overtime compensation when its earned.
Written Agreement Required
The Working Families Flexibility Act requires a written agreement between the employer and employee, which both parties enter into knowingly and voluntarily, to use comp time in lieu of overtime compensation.
Accrual and Pay Out
Employees could accrue up to 160 hours of comp time each year — that’s nearly one month’s worth of paid time off. Employees would be free to “cash out” their accrued comp time as they choose. However, at the end of the year, employers would be required to pay out any unused comp time as cash wages. This eliminates any incentive for employers to prevent employees from taking accrued comp time. They either allow the employee to used accrued comp time or pay it out at the end of the year.
Prohibition of Coercion or Intimidation
Employers are specifically prohibited from using intimidation, coercion, or in any way force an employee to accept comp time in lieu of overtime compensation. Employers who are found to have done so would be required to pay employees double the amount of wages owed.
Nevertheless, those who oppose the legislation believe that low-wage employees would feel pressured to take comp time as opposed to overtime compensation to appease their employer. Support and opposition of this bill falls squarely along party lines, with Democrats being largely in opposition.
“While they say it’s voluntary and a matter of their choice, as a practical matter, it’s not,” said House Minority Whip Steny Hoyer (D-Md.). “This bill takes away overtime pay and instead the worker gets a vague I.O.U.,” said Rep. Suzanne Bonamici (D-Ore.).
Whether this legislation makes it to President Trump’s desk to sign into law remains to be seen. The Working Families Flexibility Act has to make it through the U.S. Senate first. The legislation could face a steep uphill battle in the Senate as opponents could withhold a vote on the measure through a filibuster.
What does this mean for Nevada employers? Under Nevada law, employers must pay employees for all time worked, including any overtime worked at one and a half times their regular rate of pay. Nevada law does not permit compensatory time in lieu of overtime compensation for private-sector, nongovernmental employees. Therefore, if a hourly or salaried nonexempt employee works overtime, they must receive overtime compensation.
Nevada Association of Employers (NAE) is your resource for the latest developments in labor and employment, including wage and hour issues like this one. Contact NAE to learn what additional products and services we have available for Nevada employers.
