The House of Representatives recently passed the Working Families Flexibility Act (H.R. 1180), an act that would provide employees more workplace flexibility. The bill aims to give private-sector employees a choice in how they’re compensated for working more than 40 hours during a given workweek: either with cash wages or in the form of paid time off (PTO).
Employees could earn 1.5 hours of PTO, rather than being paid time-and-a-half, for every overtime hour worked. The bill has sparked much debate—despite the fact that 85 percent of employees consider workplace flexibility a major factor in taking a new job.
While waiting to see whether it passes through the Senate, here’s what you and your employees should know about the Working Families Flexibility Act.
Compensatory paid time off is optional
Private-sector employers can choose to offer PTO accrual as an alternative to overtime wages. However, they must offer both options—no employer can make compensatory PTO a requirement. Employees then have a choice between the two, and it’s entirely up to the employee.
Both employees and employers are protected
No employee can be forced to choose compensatory PTO instead of wages. Employers and employees must complete and sign a written agreement stating that the employee accepts, knowingly and voluntarily, to use compensatory time in lieu of wages. If a union represents an employee, the union must also be part of the collective bargaining agreement.
Employees will be paid for overtime—no matter what
Employees can earn up to 160 hours of compensatory PTO and are free to “cash out” their hours as they choose. The bill states that an employee who requests time off “shall be permitted by the employer to use such time within a reasonable period after making the request if the use of compensatory time does not unduly disrupt the operations of the employer.”
Employers have to approve the amount and dates of time requested off. This particular detail has caused the most debate, due to the fear that employers might “scam” employees and reject time off requests. However, no bill can be without regulations, as there will always be those who try to take advantage of the system.
The bill therefore ensures that employees are compensated for working overtime, no matter what. Employers designate and communicate to their employees a 12-month period—either a calendar year or some other 12-month period determined by the employer—during which the compensatory time must be used. Any PTO not used within 31 days of the designated 12-month period must be paid out to employees at the time-and-a-half overtime rate.
What does this mean for you?
This idea is nothing new—state and local government employees are already given the option between PTO and overtime pay. However, as of now, the Senate will have to vote in favor of the bill before it can move forward. If it passes, the proposed law would offer private-sector workers the flexibility to attend to personal needs and balance them more evenly with workplace commitments.
Still have questions? Read more about the Working Families Flexibility Act, or get in touch with us. We’re always happy to help!