Breaking News-House Passes Comp Time Bill!

May 23, 2017

Some Frequently Asked Questions for the Curious…

The House passed a bill named the Working Families Flexibility Act of 2017 earlier this month that, if signed into law, would dramatically change private sector compensation in the United States.  Interested? Keep reading.

What is “comp time”?  “Comp time” is the concept of allowing an employee who works overtime to choose paid time off in lieu of overtime compensation.  It is currently not legal in the private sector, but allowed in the public sector.

Why should I care about this bill?  As an employer, you may appreciate the flexibility of providing employees 1 hour of paid time off for each hour of overtime worked in the place of paying cash in overtime compensation which is currently 1.5 times the hourly wage.  Employers who offer seasonal employment may appreciate the ability to offer comp time for employees to use during layoff periods.

When will this bill become law?  This is uncertain.  The bill must still pass the Senate and be signed by the President.  Republicans are optimistic they can get the bill passed.  It may be several weeks before it even hits the Senate for consideration.

What are the specific details?  As currently drafted, the bill allows employees to choose to accrue up to 160 hours of “comp time” for hours worked beyond 40 in a week.  Employers could not force employees to accept the comp time in lieu of actual overtime payments.  In addition, the bill allows both employers and employees to change the comp time option back to regular overtime.  Employers who make the switch would need to provide employees with 30 days’ notice.  If employee’s accrued time off is not used by the end of the year, it will be cashed out. Employers are supposed to honor an employee’s request to use comp time in a reasonable manner.  Opponents of the bill are fearful that employers will use the bill to discriminate against those employees who don’t choose the comp time option, and also wrongfully deny the use of comp time to those who do choose it.

What does this mean for Wisconsin employers? This is uncertain.  Wisconsin has its own wage and hour regulations.  Currently, the concept of “comp time” is not recognized under Wisconsin law.  Without Wisconsin legislation that adopts this federal legislation, an argument could be made that comp time would still be prohibited under Wisconsin law.

Where can I get more information?  Ruder Ware will keep you posted of further developments. In the meantime, if you need more information, please contact anyone in our Employment, Benefits & Labor Relations practice group.

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