By Randall Sutton 

The U.S. House of Representatives passed a bill last week that would amend the Fair Labor Standards Act (FLSA) to allow private-sector employers to give their hourly and salaried nonexempt employees the option of receiving paid time off in lieu of overtime premium wages for working more than 40 hours in a workweek. Known as “compensable time” or “comp time,” this exception to the overtime laws is allowed and common in the public sector but not available to private sector employers.  Although compensable time offers employees and employers additional flexibility, House Democrats oppose the comp time bill, arguing that an employee may feel coerced into trading time off for additional overtime pay.

Known as the “Working Families Flexibility Act of 2017, H.R. 1180 would:

  • Allow private-sector employers to give their employees a choice between accruing paid time or receiving cash wages for overtime hours worked;
  • Allow an employee to accrue up to 160 hours in comp time each year, if the employee elects to take the time option;
  • Allow employees to ‘cash out’ their comp time at any time;
  • Require a written agreement between the employer and employee, stating that the employee enters into the agreement knowingly and voluntarily;
  • Forbid an employer from intimidating, coercing, or forcing an employee to choose comp time, and would require an employer found guilty of doing so to pay the employee doubt the amount of wages owed; and
  • Retain all protections currently existing for employees under FLSA, including the overtime premium requirements and the 40-hour workweek limitations.

Although H.R. 1180 passed the House, it did so with no Democratic support. The proposal now faces a fight in the Senate, where the rules allow opponents to filibuster this kind of legislation. In order to break the filibuster, Senate Republicans need 60 votes. As they occupy only 52 seats in the Senate, the future of this comp time bill is uncertain.

If H.R. 1180 becomes federal law, it does not guarantee that private sector employers in Oregon will be allowed to offer comp time upon its passage. Oregon law specifically requires an employer to pay non-exempt employees one and one-half times their regular rate of pay for every hour over 40 worked in one week, although it does allow public employees to offer comp time at the rate of time and a half in lieu of overtime wages when budgeted funds are not available for the payment of overtime. Because state law can diverge from federal law when it is more generous to the employee, it is possible that an amendment to the FLSA will not have an impact on private employers in Oregon unless and until our own legislature amends our laws too. We will keep you posted as the Senate takes on H.R. 1180 and the question of compensable time.

Randall Sutton leads the firm’s Employment Law & Litigation practice group. The information in this article is not intended to provide legal advice. For professional consultation, please contact Randall Sutton at Saalfeld Griggs PC.  503.399.1070.  rsutton@sglaw.com.  © 2017 Saalfeld Griggs PC.

Randall P. Sutton