Compensatory time, aka Comp Time, has been an acceptable practice for government employees, but a recent bill passed by the House on May 2nd moves on to the Senate.
Comp time is formally defined as time off that is accrued by an employee in exchange for cash overtime pay, or more precisely as 1.5 hours of Comp time in exchange for 1 hour worked of overtime. While this may be happening in private businesses today, it is currently a violation of the Fair Labor Standards Act (FLSA), and the Working Families Flexibility Act of 2017 (H.R. 1180) is looking to change that as it passed with a 22-16 vote in the House.
This Bill would allow employees to accrue up to 160 hours of comp time in a 12 month period, with any unused comp time at the end of the 12 month period reverting back to overtime, and being paid within the following 31 days. This is a bit scaled down from the government sector law, as law enforcement, fire protection, and emergency response personnel, and employees engaged in seasonal activities may accrue up to 480 hours of comp time, and all other state and local government employees accruing up to 240 hours.
Comp time would also be paid at the greater of the rate at the time when the comp time was earned or the final regular rate at the time the comp time is paid. The Bill also adopts similar language to that in effect for government employees where an employee must be permitted to use Comp time “within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer”.
This will be an opt-in by the employee, so an employer cannot make this a mandate across the company, and if an employee does participate, they can opt-out providing their employer with 30 days notice. Personally, that sounds like a record keeping nightmare for an employer. Who is in, who is out. what was the rate at the time it was earned, how much to pay out? Or better yet, a possible cash flow problem for the employer. In season, when an employer is busy and has the earnings, employees could work overtime and bank their comp time, then in the off season decide to cash out or use their comp time. At this point he employer may not have the funds because they did not properly save or budget for it.
Versions of this Bill have been attempted over the past 20 years, with none of them making it all the way into law, but we will keep an eye on this one.
Here is a link to view the full Bill as well check its status;