[House Report 115-101]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-101
======================================================================
WORKING FAMILIES FLEXIBILITY ACT OF 2017
_______
April 28, 2017.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Ms. Foxx, from the Committee on Education and the Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 1180]
[Including cost estimate of the Congressional Budget Office]
The Committee on Education and the Workforce, to whom was
referred the bill (H.R. 1180) to amend the Fair Labor Standards
Act of 1938 to provide compensatory time for employees in the
private sector, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Working Families Flexibility Act of
2017''.
SEC. 2. COMPENSATORY TIME.
Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) is
amended by adding at the end the following:
``(s) Compensatory Time Off for Private Employees.--
``(1) General rule.--An employee may receive, in accordance
with this subsection and in lieu of monetary overtime
compensation, compensatory time off at a rate not less than one
and one-half hours for each hour of employment for which
overtime compensation is required by this section.
``(2) Conditions.--An employer may provide compensatory time
to employees under paragraph (1) only if such time is provided
in accordance with--
``(A) applicable provisions of a collective
bargaining agreement between the employer and the labor
organization that has been certified or recognized as
the representative of the employees under applicable
law; or
``(B) in the case of an employee who is not
represented by a labor organization that has been
certified or recognized as the representative of such
employee under applicable law, an agreement arrived at
between the employer and employee before the
performance of the work and affirmed by a written or
otherwise verifiable record maintained in accordance
with section 11(c)--
``(i) in which the employer has offered and
the employee has chosen to receive compensatory
time in lieu of monetary overtime compensation;
and
``(ii) entered into knowingly and voluntarily
by such employee and not as a condition of
employment.
No employee may receive or agree to receive compensatory time
off under this subsection unless the employee has worked at
least 1,000 hours for the employee's employer during a period
of continuous employment with the employer in the 12-month
period before the date of agreement or receipt of compensatory
time off.
``(3) Hour limit.--
``(A) Maximum hours.--An employee may accrue not more
than 160 hours of compensatory time.
``(B) Compensation date.--Not later than January 31
of each calendar year, the employee's employer shall
provide monetary compensation for any unused
compensatory time off accrued during the preceding
calendar year that was not used prior to December 31 of
the preceding year at the rate prescribed by paragraph
(6). An employer may designate and communicate to the
employer's employees a 12-month period other than the
calendar year, in which case such compensation shall be
provided not later than 31 days after the end of such
12-month period.
``(C) Excess of 80 hours.--The employer may provide
monetary compensation for an employee's unused
compensatory time in excess of 80 hours at any time
after giving the employee at least 30 days notice. Such
compensation shall be provided at the rate prescribed
by paragraph (6).
``(D) Policy.--Except where a collective bargaining
agreement provides otherwise, an employer that has
adopted a policy offering compensatory time to
employees may discontinue such policy upon giving
employees 30 days notice.
``(E) Written request.--An employee may withdraw an
agreement described in paragraph (2)(B) at any time. An
employee may also request in writing that monetary
compensation be provided, at any time, for all
compensatory time accrued that has not yet been used.
Within 30 days of receiving the written request, the
employer shall provide the employee the monetary
compensation due in accordance with paragraph (6).
``(4) Private employer actions.--An employer that provides
compensatory time under paragraph (1) to an employee shall not
directly or indirectly intimidate, threaten, or coerce or
attempt to intimidate, threaten, or coerce any employee for the
purpose of--
``(A) interfering with such employee's rights under
this subsection to request or not request compensatory
time off in lieu of payment of monetary overtime
compensation for overtime hours; or
``(B) requiring any employee to use such compensatory
time.
``(5) Termination of employment.--An employee who has accrued
compensatory time off authorized to be provided under paragraph
(1) shall, upon the voluntary or involuntary termination of
employment, be paid for the unused compensatory time in
accordance with paragraph (6).
``(6) Rate of compensation.--
``(A) General rule.--If compensation is to be paid to
an employee for accrued compensatory time off, such
compensation shall be paid at a rate of compensation
not less than--
``(i) the regular rate earned by such
employee when the compensatory time was
accrued; or
``(ii) the regular rate earned by such
employee at the time such employee received
payment of such compensation,
whichever is higher.
``(B) Consideration of payment.--Any payment owed to
an employee under this subsection for unused
compensatory time shall be considered unpaid overtime
compensation.
``(7) Use of time.--An employee--
``(A) who has accrued compensatory time off
authorized to be provided under paragraph (1); and
``(B) who has requested the use of such compensatory
time,
shall be permitted by the employee's employer to use such 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.
``(8) Definitions.--For purposes of this subsection--
``(A) the term `employee' does not include an
employee of a public agency; and
``(B) the terms `overtime compensation' and
`compensatory time' shall have the meanings given such
terms by subsection (o)(7).''.
SEC. 3. REMEDIES.
Section 16 of the Fair Labor Standards Act of 1938 (29 U.S.C. 216) is
amended--
(1) in subsection (b), by striking ``(b) Any employer'' and
inserting ``(b) Except as provided in subsection (f), any
employer''; and
(2) by adding at the end the following:
``(f) An employer that violates section 7(s)(4) shall be liable to
the employee affected in the amount of the rate of compensation
(determined in accordance with section 7(s)(6)(A)) for each hour of
compensatory time accrued by the employee and in an additional equal
amount as liquidated damages reduced by the amount of such rate of
compensation for each hour of compensatory time used by such
employee.''.
SEC. 4. NOTICE TO EMPLOYEES.
Not later than 30 days after the date of enactment of this Act, the
Secretary of Labor shall revise the materials the Secretary provides,
under regulations published in section 516.4 of title 29, Code of
Federal Regulations, to employers for purposes of a notice explaining
the Fair Labor Standards Act of 1938 to employees so that such notice
reflects the amendments made to such Act by this Act.
SEC. 5. GAO REPORT.
Beginning 2 years after the date of enactment of this Act and each of
the 3 years thereafter, the Comptroller General of the United States
shall submit a report to Congress providing, with respect to the
reporting period immediately prior to each such report--
(1) data concerning the extent to which employers provide
compensatory time pursuant to section 7(s) of the Fair Labor
Standards Act of 1938, as added by this Act, and the extent to
which employees opt to receive compensatory time;
(2) the number of complaints alleging a violation of such
section filed by any employee with the Secretary of Labor;
(3) the number of enforcement actions commenced by the
Secretary or commenced by the Secretary on behalf of any
employee for alleged violations of such section;
(4) the disposition or status of such complaints and actions
described in paragraphs (2) and (3); and
(5) an account of any unpaid wages, damages, penalties,
injunctive relief, or other remedies obtained or sought by the
Secretary in connection with such actions described in
paragraph (3).
SEC. 6. SUNSET.
This Act and the amendments made by this Act shall cease to be in
effect on the date that is 5 years after the date of enactment of this
Act.
H.R. 1180, WORKING FAMILIES FLEXIBILITY ACT OF 2017
Purpose
The purpose of H.R. 1180, the Working Families Flexibility
Act of 2017, is to amend the Fair Labor Standards Act of 1938
(FLSA) to provide compensatory time for employees in the
private sector.
Committee Action
104TH CONGRESS
Subcommittee hearing on Voluntary Compensatory Time Off
The Committee on Economic and Educational Opportunities'
(now known as the Committee on Education and the Workforce
consideration of legislation allowing compensatory time for
private-sector employees began during the 104th Congress. As
part of a series of oversight hearings on the FLSA, the
Subcommittee on Workforce Protections held a hearing on June 8,
1995, on amending the FLSA to provide private-sector employers
with the option of allowing their employees to voluntarily
choose to take compensatory time off. The following individuals
testified at the hearing: Ms. Arlyce Robinson, Administrative
Support Coordinator, Computer Sciences Corporation, Falls
Church, Virginia; Ms. Kathleen M. Fairall, Senior Human
Resource Representative, Timken Company, Randolph County, North
Carolina; Ms. Sandie Moneypenny, Process Technician, Timken
Company, Randolph County, North Carolina; Dr. M. Edith Rasell,
Economist, Economic Policy Institute, Washington, D.C.; and Mr.
Michael T. Leibig, Attorney-at-Law, Zwerdling, Paul, Leibig,
Kahn, Thompson & Wolly, P.C., Fairfax, Virginia.
Subcommittee hearing on H.R. 2391, Working Families Flexibility Act of
1996
On November 1, 1995, the Subcommittee on Workforce
Protections held a hearing on H.R. 2391, a bill introduced by
Rep. Cass Ballenger (R-NC) to amend the FLSA to provide
voluntary compensatory time for private-sector employees. The
following witnesses testified at the hearing: Mr. Pete
Peterson, Senior Vice President of Personnel, Hewlett-Packard
Company, Palo Alto, California; Ms. Debbie McKay,
Administrative Specialist, PRC, Inc., McLean, Virginia; and Mr.
Michael T. Leibig, Attorney-at-Law, Zwerdling, Paul, Leibig,
Kahn, Thompson & Wolly, P.C., Fairfax, Virginia.
Full Committee and House passage of H.R. 2391, Working Families
Flexibility Act of 1996
On December 13, 1995, the Subcommittee on Workforce
Protections approved H.R. 2391, as amended, by voice vote, and
ordered the bill favorably reported. On June 26, 1996, the
Committee on Economic and Educational Opportunities approved
H.R. 2391, as amended, by voice vote, and ordered the bill
favorably reported by a roll call vote of 20 to 16. The U.S.
House of Representatives (House) passed H.R. 2391, as amended,
on July 30, 1996, but the Senate did not act on it prior to the
adjournment of the 104th Congress.
105TH CONGRESS
Introduction of and Subcommittee hearing on H.R. 1, Working Families
Flexibility Act
On January 7, 1997, Rep. Ballenger introduced H.R. 1, the
Working Families Flexibility Act. The Subcommittee on Workforce
Protections held a hearing on H.R. 1 on February 5, 1997. The
following individuals testified at the hearing: Rep. Kay
Granger (R-TX); Rep. Tillie Fowler (R-FL); Representative Sue
Myrick (R-NC); Ms. Christine Korzendorfer, Manassas, Virginia;
Mr. Peter Faust, Clear Lake, Iowa; Ms. Linda M. Smith, Miami,
Florida; Dr. Roosevelt Thomas, Vice President of Human
Resources and Affirmative Action, University of Miami, Coral
Gables, Florida, testifying on behalf of the College and
University Personnel Association; Ms. Diana Furchtgott-Roth,
Resident Fellow at the American Enterprise Institute for Public
Policy Research, Washington, D.C.; Mr. Robert D. Weisman,
Attorney-at-Law, Schottenstein Zox & Dunn, Columbus, Ohio; Mr.
Russell Gunter, Attorney-at-Law, testifying on behalf of the
Society for Human Resource Management (SHRM), Alexandria,
Virginia; Ms. Karen Nussbaum, Director, AFL-CIO Working Women's
Project, Washington, D.C.; and Ms. Helen Norton, Director of
Equal Opportunity Programs, Women's Legal Defense Fund,
Washington, D.C.
House passage of H.R. 1, Working Families Flexibility Act
On March 5, 1997, the Committee on Education and the
Workforce (Committee) discharged the Subcommittee on Workforce
Protections from further consideration of the bill and
favorably reported H.R. 1, as amended, by a roll call vote of
23 to 17. The House passed H.R. 1, as amended, on March 19,
1997, but the Senate did not act on it prior to the adjournment
of the 105th Congress.
106TH CONGRESS
Introduction of H.R. 1380, Working Families Flexibility Act
On April 13, 1999, Rep. Ballenger introduced H.R. 1380, the
Working Families Flexibility Act, and it was referred to the
Committee; however, there was no action taken on the
legislation.
107TH CONGRESS
First Session--Introduction and legislative action
On May 24, 2001, Rep. Judy Biggert (R-IL) introduced H.R.
1982, the Working Families Flexibility Act.
Second Session--Subcommittee hearings
While there was no action taken on H.R. 1982 in the 107th
Congress, the Subcommittee on Workforce Protections held two
hearings focusing on the issue of increasing workplace
flexibility under the FLSA.
On March 6, 2002, the following individuals testified
before the Subcommittee: Mr. Ronald Bird, Chief Economist,
Employment Policy Foundation, Washington, D.C.; Dr. Carl E. Van
Horn, Professor and Director, John J. Heldrich Center for
Workforce Development, Rutgers, the State University of New
Jersey, New Brunswick, New Jersey; Mr. William J. Kilberg,
Senior Partner, Gibson, Dunn & Crutcher, LLP, Washington, D.C.,
testifying on behalf of the U.S. Chamber of Commerce; and Ms.
Judith M. Conti, Co-Founder and Director, Legal Services and
Administration, D.C. Employment Justice Center, Washington,
D.C.
On May 15, 2002, the following individuals testified before
the Subcommittee: Mr. Donald J. Winstead, Acting Associate
Director for Workforce Compensation and Performance, U.S.
Office of Personnel Management, Washington, D.C.; Mr. Andy
Brantley, Associate Vice President for Human Resources,
University of Georgia, Athens, Georgia, testifying on behalf of
the College and University Professional Association for Human
Resources (CUPA-HR); Mr. Thomas M. Anderson, J.D., SPHR, Human
Resources Director, Fort Bend County, Rosenberg, Texas,
testifying on behalf of SHRM; and Mr. Dennis Slocumb, Executive
Vice President and Legislative Director, International Union of
Police Associations, AFL-CIO, Alexandria, Virginia.
108TH CONGRESS
Introduction and Subcommittee hearing on H.R. 1119, Family Time
Flexibility Act
On March 6, 2003, Rep. Biggert introduced H.R. 1119, the
Family Time Flexibility Act. The Subcommittee on Workforce
Protections held one hearing on the legislation on March 12,
2003. The following individuals testified at the hearing: Mr.
Houston L. Williams, Chairman and CEO, PNS, Inc., San Jose,
California, testifying on behalf of the U.S. Chamber of
Commerce; Ms. Terri Martell, Electrician, Eastman Kodak
Company, Wayland, New York; Ms. Ellen Bravo, National Director,
Nine to Five: National Association of Working Women, Milwaukee,
Wisconsin; and Mr. John A. Dantico, SPHR, CCP, Principal of
Compensation/HR Consulting, The HR Group, Northbrook, Illinois,
testifying on behalf of SHRM.
Committee activity on H.R. 1119, Family Time Flexibility Act
On April 3, 2003, the Subcommittee on Workforce Protections
favorably reported H.R. 1119, without amendment, to the
Committee by a roll call vote of 8 to 6. On April 9, 2003, the
Committee approved H.R. 1119, without amendment, and ordered
the bill favorably reported to the House by a roll call vote of
27 to 22. However, the House did not act on H.R. 1119 prior to
the adjournment of the 108th Congress.
110TH CONGRESS
Introduction of H.R. 6025, Family-Friendly Workplace Act
On May 13, 2008, Rep. Cathy McMorris Rodgers (R-WA)
introduced H.R. 6025, the Family-Friendly Workplace Act, which
was referred to the Committee on Education and Labor (now known
as the Committee and Education and the Workforce); however, no
action was taken on the legislation.
111TH CONGRESS
Introduction of H.R. 933, Family-Friendly Workplace Act
On February 10, 2009, Rep. McMorris Rodgers introduced H.R.
933, the Family-Friendly Workplace Act, which was referred to
the Committee on Education and Labor; however, no action was
taken on the legislation.
113TH CONGRESS
Introduction of and Subcommittee hearing on H.R. 1406, Family-Friendly
Workplace Act of 2013
On April 9, 2013, Rep. Martha Roby (R-AL) introduced H.R.
1406, the Working Families Flexibility Act of 2013, which was
referred to the Committee. On April 11, 2013, the Subcommittee
on Workforce Protections held a hearing on H.R. 1406. The
following individuals testified at the hearing: Mr. Andy
Brantley, President and Chief Executive Officer, CUPA-HR,
Knoxville, Tennessee; Ms. Karen DeLoach, Montgomery, Alabama;
Ms. Juanita Phillips, Director of Human Resources, Intuitive
Research and Technology Corporation, Huntsville, Alabama,
testifying on behalf of SHRM; and Ms. Judith Lichtman, Senior
Advisor, National Partnership for Women & Families, Washington,
D.C.
Full Committee markup and House passage of H.R. 1406, Family-Friendly
Workplace Act of 2013
On April 17, 2013, the Committee considered H.R. 1406. Rep.
Roby offered an amendment in the nature of a substitute to make
technical changes to the legislation. The Committee favorably
reported H.R. 1406, as amended, to the House by a roll call
vote of 23 to 14. On May 8, 2013, during Floor consideration by
the House, Rep. Chris Gibson (R-NY) offered an amendment that
was adopted by a roll call vote of 384 to 42. The amendment
would have required the Government Accountability Office (GAO)
to submit a report to Congress, two years after enactment of
the legislation, regarding private-sector use of compensatory
time. H.R. 1406 passed the House, as amended, by a roll call
vote of 223 to 204. The bill was not acted on by the Senate
prior to the adjournment of the 113th Congress.
115TH CONGRESS
Introduction of H.R. 1180, Working Families Flexibility Act of 2017
On February 16, 2017, Rep. Roby introduced H.R. 1180, the
Working Families Flexibility Act of 2017, which was identical
to H.R. 1406 as passed by the House during the 113th Congress.
The bill was referred to the Committee.
Subcommittee hearing on H.R. 1180, Working Families Flexibility Act of
2017
On April 5, 2017, the Subcommittee on Workforce Protections
held a hearing on H.R. 1180. The following individuals
testified at the hearing: Ms. Leslie-Jo Boyd Christ, Chief
Resource Officer, WellStone Behavioral Health, Huntsville,
Alabama; Mr. Leonard Court, Esquire, Director, Crowe & Dunlevy,
Oklahoma City, Oklahoma, testifying on behalf of the U.S.
Chamber of Commerce; Ms. Crystal Frey, Vice President of Human
Resources, Continental Realty Corporation, Baltimore, Maryland,
testifying on behalf of SHRM; and Ms. Vicki Shabo, Vice
President, National Partnership for Women & Families,
Washington, D.C.
Full Committee markup of H.R. 1180, Working Families Flexibility Act of
2017
On April 26, 2017, the Committee considered H.R. 1180.\1\
Rep. Bradley Byrne (R-AL), Chairman of the Subcommittee on
Workforce Protections, offered an amendment in the nature of a
substitute making technical changes to the introduced bill. The
Committee voted to adopt the amendment in the nature of a
substitute by voice vote. The bill was favorably reported to
the House, as amended, by a roll call vote of 22 to 16.
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\1\H.R. 1180, Working Families Flexibility Act of 2017: Markup
Before the H. Comm. on Educ. and the Workforce, 115th Cong. (Apr. 26,
2017).
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Summary of H.R. 1180
H.R. 1180 gives private-sector employers and employees an
option under the FLSA that federal, state, and local
governments have had for many years. H.R. 1180 does not affect
the compensatory time provisions already applicable to
employees of federal, state, and local governments. The bill
permits private-sector employers to offer their employees the
option of selecting compensatory time off or cash overtime
wages. An employee will be able to choose, based upon a
voluntary agreement with his or her employer, to have his or
her overtime compensated with paid time off.
The bill does not change the 40-hour workweek to affect the
manner in which overtime is calculated. ``Non-exempt''
employees who work more than 40 hours within a seven-day period
will continue to receive overtime compensation at a rate of not
less than one and one-half times an employee's regular rate of
pay. If an employer and an employee agree on compensatory time,
the paid time off will accrue at the rate of not less than one
and one-half hours for each hour of overtime worked.
H.R. 1180 provides new employee protections, in addition to
those contained in current law, in order to protect against the
coercive use of compensatory time. The bill requires any
arrangement for the use of compensatory time to be an expressly
mutual agreement between the employer and the employee. In the
case of employees who are represented by a recognized or
certified labor organization, the agreement must be between the
employer and the labor organization. In other cases, the
agreement is with an individual employee, must be entered into
knowingly and voluntarily by the employee, and may not be a
condition of employment.
To be eligible to choose compensatory time, an employee
must have worked at least 1,000 hours in a period of continuous
employment with the employer during the 12-month period
preceding the date the employee agrees to receive or receives
compensatory time.
An agreement for the use of compensatory time between an
individual employee and his or her employer must be affirmed by
a written or otherwise verifiable statement that the employee
has chosen to receive compensatory time off in lieu of cash
compensation. The agreement must be made, kept, and preserved
in accordance with the recordkeeping requirements under Section
11(c) of the FLSA.\2\
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\2\29 U.S.C. Sec. 211(c).
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An employee can accrue up to 160 hours of compensatory time
each year. Any accrued compensatory time that has not been used
by the employee by the end of each year (or an alternative 12-
month period as designated by the employer) must be paid by the
employer to the employee in the form of monetary compensation.
Likewise, any unused, accrued compensatory time would be cashed
out at the end of an employee's employment with the employer,
whether voluntary or involuntary. An employee may also request
in writing that monetary compensation be provided, at any time,
for accrued compensatory time that has not yet been used. In
all cases, the compensatory time would be cashed out at the
regular rate of pay earned by the employee when the
compensatory time was accrued, or at the regular rate earned by
the employee when the employee cashed out, whichever is higher.
An employee may, at any time, withdraw from a compensatory
time agreement with his or her employer. Within 30 days of
receiving such a written request, the employer shall provide
the employee with monetary compensation for the unused, accrued
compensatory time.
A private-sector employer must provide an employee with 30
days' notice prior to cashing out an employee's accrued, unused
compensatory time. However, an employer may only cash out
unused compensatory time accrued by an employee in excess of 80
hours, unless the cash out is employee-initiated. A private-
sector employer must also provide employees with 30 days'
notice prior to discontinuing a policy of offering compensatory
time to employees.
Any accrued, unused compensatory time would be considered
to be the same as wages owed to the employee. For the purposes
of enforcement, as with any other violation of the FLSA, all of
the remedies under the law would apply. In addition, any
employer who directly or indirectly intimidates, threatens, or
coerces any employee into selecting compensatory time off in
lieu of cash compensation, or who forces an employee to use
accrued compensatory time, would be liable to the employee for
the cash value of the accrued compensatory time, plus an
additional equal amount as liquidated damages, reduced by the
amount of compensatory time already used by the employee.
Finally, H.R. 1180 contains a sunset provision whereby the
legislation ceases to exist five years after the date of its
enactment. This will allow Congress to review the use of
compensatory time by private-sector employers and employees
and, if need be, to make adjustments in the legislation
authorizing its use.
Committee Views
Background
The FLSA was enacted in 1938.\3\ Among its provisions is
the requirement that hours of work by ``non-exempt employees''
beyond 40 hours in a seven-day period must be compensated at a
rate of one and one-half times the employee's regular rate of
pay.\4\ Certain exceptions to the ``40 hour workweek'' are
permitted, under Sections 7 and 13 of the FLSA,\5\ for a
variety of specific types and places of employment where
circumstances have led Congress, over the years, to enact
specific provisions regarding maximum hours of work for those
types of employment. In addition, the ``overtime pay''
requirement does not apply to employees who are exempt as
``executive, administrative, or professional'' employees.\6\
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\3\Id. Sec. Sec. 201-219.
\4\Id. Sec. 207.
\5\Id. Sec. 207, 213.
\6\Id. Sec. 213.
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Under the FLSA's overtime requirements, overtime pay for
employees in the private sector must be in the form of cash
wages paid to the employee in the employee's next paycheck.
This is different than overtime requirements for employees in
the public sector. Section 7(o) of the FLSA, added to the law
in 1985, provides that state and local government employers may
offer their employees compensatory time at a rate not less than
one and one-half hours for each hour of employment for which
overtime compensation is required, subject to regulatory
requirements administered by the Department of Labor.\7\ While
federal government employees may also earn compensatory time
off, their use of compensatory time is governed by the Federal
Employees Flexible and Compressed Work Schedules Act of 1978
and subject to regulatory requirements administered by the
Office of Personnel Management.\8\
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\7\Id. Sec. 207(o); 29 C.F.R. Sec. Sec. 553.20-553.28.
\8\See 5 U.S.C. Sec. Sec. 5543, 6123; 5 C.F.R. Sec. Sec. 550.114,
551.531. Of particular note, federal government employees may generally
earn one hour of compensatory time for each hour of overtime worked.
See 5 U.S.C. Sec. 5543.
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This difference in treatment between the private and public
sectors is explained by the fact that the public-sector
compensatory time provisions were added nearly 50 years after
the FLSA was originally written. As a result, the public-sector
compensatory time provisions included a recognition that the
workplace and workforce had changed greatly since 1938.
Specifically, in adding Section 7(o) to the FLSA in 1985,
Congress recognized that changes in the workplace and workforce
had led many state and local governments and their employees,
prior to their being covered by the FLSA,\9\ to mutually agree
upon forms of compensatory time. As the Senate Committee on
Labor and Human Resources explained in including compensatory
time for state and local governments in the 1985 amendments to
the FLSA:
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\9\In Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528
(1985), the Supreme Court held that state and local government
employees were covered by the FLSA.
The Committee also is cognizant that many state and
local government employers and their employees
voluntarily have worked out arrangements providing for
compensatory time off in lieu of pay for hours worked
beyond the normally scheduled workweek. These
arrangements--frequently the result of collective
bargaining--reflect mutually satisfactory solutions
that are both fiscally and socially responsible. To the
extent practicable, we wish to accommodate such
arrangements.\10\
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\10\Report on S. 1570, Committee on Labor and Human Resources, U.S.
Senate, 99th Congress, First Session, Senate Report No. 99-159 at 8.
The Committee is certain that compensatory time can provide
``mutually satisfactory solutions'' in the private sector no
less than is the case in the public sector. The Committee has
heard compelling testimony from employees in the private sector
who are covered by the overtime protections of the FLSA and who
believe that a change in the law to allow compensatory time
would be of great benefit to them.
Ms. Arlyce Robinson, an Administrative Support Coordinator
for Computer Services Corporation and an hourly non-exempt
employee, described to the Subcommittee how she would like to
be able to use compensatory time:
I am here this morning to share with you my feelings
about the impact of a law that was created over 50
years ago to protect many of us in the workplace, the
Fair Labor Standards Act. I know that under this law,
as a non-exempt employee I am eligible for overtime if
I work more than 40 hours in a work week. And, while I
never turned down an opportunity to earn more money,
there have been times when I would have gladly given up
the additional pay to enjoy flexibility in planning my
work schedule, the same flexibility that my exempt
colleagues have had for some time. Let me give you an
example.
In a few months, as all of you know, the weather
around Washington D.C. will become much colder. We are
likely to see some snow and ice. And if we have a
winter like the one we had two years ago, we will
likely see a great deal of snow and ice. If it snows on
a Monday or Tuesday--at the beginning of my workweek--
and I can't get to work on one of those days, I know
that I can make up the hours that I missed by working
extra hours later in that same week--say on Thursday or
Friday. However, if it snows at the end of my workweek,
we have a different issue. Although my company would
like to allow me to make up the work during the
following workweek, the fact is that they can't allow
it without incurring additional costs. You see, if I
only worked 4 eight hour days--or 32 hours--the first
week, I would have to work 48 hours the following week
in order to have a full 80 hour paycheck for the two
week period. But right now under the Fair Labor
Standards Act, each one of the 8 hours worked over 40
in the second week would have to be paid on an overtime
basis. That's just too expensive for my company, given
the number of non-exempt employees that we have. So
since I can't make up the time in the second week, I
have to take vacation leave which keeps my paycheck
whole but gives me less vacation to use later--when I
would like to use it. My only other alternative is to
take leave without pay, which keeps my vacation intact,
but results in my losing money in my paycheck. And I do
need my paycheck!!
. . . For the first 20 years of my career, I worked in
the public sector as a secretary and as an
administrative assistant in the DC public school system
and for the DC Office of Personnel. When I worked for
these agencies, I was able to earn and use compensatory
time. I can't earn that now . . . This lack of
flexibility is especially difficult for parents of
young children, both mothers and fathers, and,
particularly, for single parents. Doctor appointments
and school conferences can often only be scheduled
during work hours. For non-exempt employees, this often
means having to take sick leave or vacation leave to
have a few hours off to take care of family
responsibilities.\11\
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\11\Hearings on the Fair Labor Standards Act before the
Subcommittee on Workforce Protections, Committee on Economic and
Educational Opportunities, U.S. House of Representatives, 104th
Congress, First Session, Serial No. 104-46 at 180-81.
Ms. Sandie Moneypenny, a process technician for the Timken
Company and an hourly non-exempt employee, described how having
the option of choosing compensatory time could help her as a
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working mother:
Compensatory time off for a working mother like
myself would be very helpful. If I had to leave work
because of a sick child, wanted to attend a teachers
conference, needed to take my child to the dentist or
just wanted time off to be with my family, I would have
the option without it affecting my pay.
Today I can only use compensatory time in the week it
occurs, but as most of you know, life doesn't seem to
work that way. If I could bank my overtime, I wouldn't
have to worry about missing work if my child gets sick
on Monday or Tuesday. I also would only be postponing
valuable time off with my family when I have a busy
work week, because I could always take the time off at
a later date.\12\
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\12\Id. at 186.
Ms. Deborah McKay, an administrative specialist, with PRC,
Inc. testified about why she would like to have the option of
---------------------------------------------------------------------------
selecting compensatory time off:
Under this proposal, an employee would be given the
option to use overtime compensatory time at a later
date when these family emergency type situations occur.
Personally, I would find this time useful in working on
term papers and projects for school as well as waiting
for the repairman. There is nothing more frustrating
than having to take a whole day of leave to have a
scheduled repairman show up--supposed to show up at 9
a.m. and then not show up until 3 or 4 in the
afternoon.
. . . [W]hat I am recommending is simple . . . [H]ave
the FLSA amended by giving non-exempt and exempt
employees the option of time and a half pay or time and
a half of equal value off.\13\
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\13\Id. at 416-17.
Mr. Peter Faust, an hourly employee at a nonprofit facility
for individuals who are mentally and/or physically disabled,
related the difficulty he and his wife have when struggling to
balance family responsibilities with work schedules and the
importance additional time off would have for him and his
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coworkers:
There are a lot of ways to make money in this country
and lots of ways to spend it, but there's only one way
to spend time with yourself, family or friends, and
that's to have the time to spend.
In this country of choice, can the working families
have a choice? Some already do. Federal employees have
had the choice to save comp time since 1978. State and
local employees can save it too. Does our government
value the private working families in this country
enough to give us the same choice?\14\
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\14\Hearing on H.R. 1, Working Families Flexibility Act, before the
Subcommittee on Workforce Protections, Committee on Education and the
Workforce, U.S. House of Representatives, 105th Congress, First
Session, Serial No. 105-1 at 17-18.
Ms. Linda M. Smith, a medical staff credentialing
coordinator and secretary at the Bascom Palmer Eye Institute,
expressed her ``wholehearted support'' for the development of a
program that would enable her to have the option of
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compensatory time:
With the implementation of the banked comp time
program, I could use my overtime hours to create time
for pregnancy leave for a second child, furthering my
education, taking care of a debilitated parent, or,
closest to my heart, creating special days with my
daughter. A goal of mine is to obtain my degree. My
employer allows me to take one class during working
hours, without pay. With accrued comp time, I could
take the class during working hours, with pay. Accrued
comp time would also allow me to take time off for
doctors' appointments, teachers conferences, or to care
for a sick child without having to use accrued sick
time. In this way, sick time could be saved for
catastrophic or long-term illnesses.\15\
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\15\Id. at 22.
Ms. Christine Korzendorfer, an hourly employee with TRW,
told the Subcommittee how important it would be for her to be
---------------------------------------------------------------------------
able to choose compensatory time:
This schedule as a hourly employee provides me with a
lot of overtime pay. This pay is important to me.
However, the time with my family is more important. If
I had a choice there are times when I would prefer to
take comp time in lieu of overtime. What makes this
idea appealing is that I would have a choice with the
legislation you are considering.
Just recently, my son was ill and I had to stay at
home with him. I took a day of vacation which I would
have preferred to use for vacation! But I did not want
to take unpaid leave. . . . If I had the choice, I
would have used comp time in lieu of overtime for that
day off from work. Besides, I would have only had to
use about five and one-half hours of comp time to cover
that eight hour day.\16\
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\16\Id. at 10-11.
Ms. Terri Martell, an electrician with the Eastman Kodak
Company, told the Subcommittee about the increased flexibility
---------------------------------------------------------------------------
that compensatory time would provide to her and her co-workers:
Another example of needing flexibility with overtime
pay and how it is paid is when the children are sick. I
remember when my 10-year old Eric was born, I used up
eleven of my twenty vacation days to stay home with him
or take him to the doctor just that first year. Being a
first time mom and needing to nurture him while he was
sick was very important to him and to me. As a working
mother, it is very stressful to be at work when your
children are in someone else's care. In 1993, I could
have used that [comp] time during those emergencies.
I have heard from co-workers who feel strongly about
the need for the more flexible schedules--the kind that
comp time would allow. These are employees who are
caregivers of their aging parents. One colleague in
particular told me of her need to balance work and
family. For her, comp time would mean allowing more
flexibility in spending more time with her ill parent.
The ability to save overtime as comp time and use it in
times of need is crucial when crisis occurs but also to
cope with day-to-day challenges. Also, someone who has
used up annual vacation hours may have a need for extra
time later in the year. Banking comp time could offer
options instead of requiring employees to choose
between working and taking time off without pay to
address family needs.\17\
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\17\Hearing on H.R. 1119, Family Time Flexibility Act, before the
Subcommittee on Workforce Protections, Committee on Education and the
Workforce, U.S. House of Representatives, 108th Congress, First
Session, Serial No. 108-7 at 50.
Ironically, employees who are classified as exempt under
the FLSA are not so restricted by law and often are permitted
by their employers to have much more flexibility in their
schedules than non-exempt employees. But for non-exempt
employees, the law has denied them the flexibility that they
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need and want. As Ms. Robinson summarized:
While the law was intended to protect us--and maybe
50 years ago it did--in today's business world it has
had the effect of creating the illusion of two classes
of workers. The term non-exempt is often misinterpreted
to mean ``less than professional.''\18\
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\18\Hearings on the Fair Labor Standards Act before the
Subcommittee on Workforce Protections, Committee on Economic and
Educational Opportunities, U.S. House of Representatives, 104th
Congress, First Session, Serial No. 104-46 at 181.
Ms. Karen DeLoach, a bookkeeper from Montgomery, Alabama,
shared her personal insight into the importance of allowing
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employees to choose between compensatory time and cash wages:
You may wonder why compensatory time could matter to
an empty-nester who seems to be in pretty good health.
Why would I need more time off from work than the paid
sick and vacation time that my employer agreed to allow
annually? Well, I've learned in the last several years
that there can still be many unforeseen needs in
addition to any planned break from the routine.
In the last three years, my mother, my brother, my
father-in-law and one of my sons-in-law have all passed
away, some at relatively early ages. I am not getting
any younger, and neither is the rest of the world so
yes, I say again, time is precious to me. I would
greatly appreciate the option at work to choose between
being compensated in dollars or days.\19\
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\19\Hearing on H.R. 1406, Working Families Flexibility Act of 2013,
before the Subcommittee on Workforce Protections, Committee on
Education and the Workforce, U.S. House of Representatives, 113th
Congress, First Session, Serial No. 113-13 at 16.
Ms. Crystal Frey, vice president of human resources for a
real estate business, shared how compensatory time would help
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employees better manage their work and family life:
I was recently approached by a non-exempt leasing
consultant who was facing numerous life-changing events
at one time, including the birth of her child, her
upcoming marriage, and the completion of her college
degree . . . [I]f comp time had been an option
available to her, I believe it would have given her
even more access to paid leave.\20\
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\20\Hearing on H.R. 1180, Working Families Flexibility Act, before
the Subcommittee on Workforce Protections, Committee on Education and
the Workforce, U.S. House of Representatives, 115th Congress, First
Session (oral testimony of Crystal Frey, Continental Realty
Corporation).
There is ample support for concluding that Ms. Robinson,
Ms. Moneypenny, Ms. McKay, Mr. Faust, Ms. Smith, Ms.
Korzendorfer, Ms. Martell, and Ms. DeLoach are not alone in
wanting the increased flexibility provided by the Working
Families Flexibility Act. As Ms. Juanita Phillips, Director of
Human Resources at Intuitive Research and Technology
---------------------------------------------------------------------------
Corporation, testified before the Subcommittee:
The increased diversity and complexity within the
American workforce--combined with global competition in
a 24/7 economy--is driving the need for more workplace
flexibility. C-suite executives, for example, say the
biggest threat to their organizations' success is
attracting and retaining top talent. Human resource
professionals believe the best way to attract and
retain the best people is to provide workplace
flexibility. Moreover, a large majority of employees--
87 percent--report that flexibility in their jobs would
be ``extremely'' or ``very'' important in deciding
whether to take a new job.\21\
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\21\Hearing on H.R. 1406, Working Families Flexibility Act of 2013,
before the Subcommittee on Workforce Protections, Committee on
Education and the Workforce, U.S. House of Representatives, 113th
Congress, First Session, Serial No. 113-13 at 11.
Most recently, Ms. Leslie-Jo Boyd Christ, chief resource
officer at a nonprofit focused on behavioral health, detailed
the effects of denying workers the opportunity to choose
---------------------------------------------------------------------------
compensatory time:
Many [of our] employees work side by side with
Huntsville Police Department officers, who do benefit
from the option of receiving overtime pay or comp
time--it is difficult for employees to understand why
the rules are different for public or governmental
agencies when they work so hard for our community.\22\
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\22\Hearing on H.R. 1180, Working Families Flexibility Act, before
the Subcommittee on Workforce Protections, Committee on Education and
the Workforce, U.S. House of Representatives, 115th Congress, First
Session, Apr. 5, 2017 (oral testimony of Leslie Christ, WellStone
Behavioral Health).
Mr. Leonard Court testified before the Subcommittee about
how the protections under the Working Families Flexibility Act
of 2017 would help ensure employee choice and control over
---------------------------------------------------------------------------
their selection of compensatory time:
The bill is carefully drafted to ensure that
employees retain maximum flexibility in being able to
choose whether to take the comp time option, whether to
continue exercising it, when they may seek a cash out
of their banked time, and to protect them from any
coercion or undue influence from the employer as to
whether they exercise the comp time option.\23\
---------------------------------------------------------------------------
\23\Id. (oral testimony of Mr. Leonard Court, Esq., Crowe &
Dunlevy).
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H.R. 1180, Working Families Flexibility Act of 2017
H.R. 1180 amends the FLSA to permit employers in the
private sector to offer their employees the voluntary option to
receive overtime pay in the form of compensatory time off in
lieu of cash wages. The legislation does not change the
employer's obligation to pay overtime at the rate of one and
one-half times the employee's regular rate of pay for any hours
worked more than 40 in a seven-day period. The bill simply
allows overtime compensation to be given in the form of paid
time off, at the rate of one and one-half hours of compensatory
time for each hour of overtime worked, and only if the employee
and employer agree on that form of overtime compensation. As is
the case where compensatory time is already used in the public
sector, the employee would be paid at the employee's regular
hourly rate of pay when the compensatory time is used.
H.R. 1180 does not alter current use of compensatory time
in the public sector in any way. Rather, the legislation
extends the option of compensatory time off to private-sector
employees, which is the same option that federal, state, and
local government employees have had for many years, and which
has the support of private-sector employees who have testified
before the Committee. The legislation includes numerous
protections for employees to assure that employees' choice and
use of compensatory time are truly voluntary. Compensatory
time, as provided in H.R. 1180, is not a mandate on employers
or employees. H.R. 1180 simply gives employees and employers
the opportunity to agree to this arrangement, an opportunity
that is now denied to them by the FLSA.
Compensatory time agreement
Under H.R. 1180, an employer and his or her employee must
reach an express mutual agreement that overtime compensation
will be in the form of compensatory time. If either the
employee or the employer does not so agree, then the overtime
compensation must be in the form of cash wages.
The agreement between the employer and employee must be
reached prior to the performance of the work for which the
compensatory time would be given. The agreement may be specific
as to each hour of overtime, or it may be a blanket agreement
covering overtime worked within a set period of time.
The bill allows two types of employer-employee agreements
on compensatory time. Where the employee is represented by a
recognized or certified labor organization, the agreement must
be in the collective bargaining agreement between the employer
and the recognized or certified labor organization. By
referring to a labor organization that has been recognized or
certified under applicable law, H.R. 1180 includes any law
providing for recognition or certification of labor
organizations representing private-sector workers in collective
bargaining, including, at the federal level, the National Labor
Relations Act and the Railway Labor Act.
Where an employee is not represented by a recognized or
certified labor organization, the agreement must be made
between the employer and the individual employee. The bill
specifies that any such agreement between the employer and an
individual employee must be entered into knowingly and
voluntarily by the employee, and it may not be a condition of
employment.
The bill also requires that, with regard to agreements
between employers and individual employees, the agreement on
compensatory time between the employer and the employee must be
affirmed in a written or otherwise verifiable statement. The
latter is intended to allow computerized and other similar
payroll systems to include this information, so long as the
employee's agreement to take the overtime in the form of
compensatory time is verifiable. The Committee does not intend
that the agreement could be purely oral with no contemporaneous
record kept. To further assure compensatory time agreements are
authentic, H.R. 1180 provides that, pursuant to the general
recordkeeping authority of the FLSA, the Secretary of Labor has
authority to prescribe the information which the records of
such agreements must include and the period of time the records
should be maintained by the employer.\24\
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\24\29 U.S.C. Sec. 211(c).
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The assurance that an individual employee's agreement to
choose compensatory time is voluntary is further protected by
provisions in the bill that allow an employee who has entered
into such an agreement to withdraw it at any time. Thus, an
employee who agrees that all or a portion of the overtime hours
he or she works will be compensated in this form may at any
point withdraw from that arrangement, in which case any
subsequent hours of overtime worked by the employee must be
compensated in the form of cash wages.
Just as is the case with compensatory time as it operates
in the public sector, H.R. 1180 does not require that the same
agreement be made with every employee, or that the employer
agree to offer compensatory time to all employees.\25\
Opponents of compensatory time claim this allows an employer to
unfairly single out employees and to force them to take
compensatory time in lieu of cash wages against the employee's
wishes. However, the bill's express prohibition on ``direct or
indirect coercion'' and attempted coercion of employees (see
discussion below), prohibits an employer from conferring any
benefit or compensation for the purpose of interfering with an
employee's right to request or not request compensatory time.
Thus, an employer may not single out employees for overtime
work for the purpose of rewarding or punishing employees for
their willingness or unwillingness to take compensatory
time.\26\
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\25\29 C.F.R. 553.23(c) (``An employer need not adopt the same
agreement or understanding with different employees and need not
provide compensatory time to all employees.'')
\26\Obviously an employer also may not use any overtime policy,
including compensatory time, to discriminate among employees for any
reason prohibited by law. See Testimony of Mr. Robert Weisman, Hearing
on H.R. 1, Working Families Flexibility Act, before the Subcommittee on
Workforce Protections, Committee on Education and the Workforce, U.S.
House of Representatives, 105th Congress, First Session, Serial No.
105-1.
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The opponents of compensatory time have argued that
compensatory time should be denied to employees in the private
sector, but if it is allowed, then ``low-wage'' workers and
certain occupations (e.g., temporary, seasonal, or part-time
occupations) should be excluded. The Committee believes that
many workers who likely would be included in a national
definition of ``low-wage'' want to have the option of
compensatory time off--and are perfectly capable of making that
decision themselves. Indeed, some of the most forceful and
compelling testimony before the Subcommittee in support of
allowing workers the option of compensatory time was given by a
``low-wage worker,'' Mr. Peter Faust, who likely would be
denied that option if all such workers were excluded from H.R.
1180.\27\ Further, the requirement for mutual agreement by the
employer and the employee and the employee protections in the
bill ensure that compensatory time is voluntary. The Committee
sees no reason to deny certain employees the option of
compensatory time based solely upon their level of income or
their occupation.
---------------------------------------------------------------------------
\27\Id. at 17-18.
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Conditions on compensatory time
The Committee intends that compensatory time be a matter of
agreement between employers and employees and, to that end, the
law should permit employers and employees some flexibility in
structuring compensatory time arrangements. H.R. 1180 provides
certain parameters for such compensatory time arrangements,
primarily in order to ensure employees are fully protected.
These parameters apply whether the compensatory time agreement
is with a labor organization or with an individual employee
(see discussion above). The agreement between the employer and
employee may include other provisions governing the
preservation, use, or cashing out of compensatory time, so long
as these provisions are consistent with H.R. 1180. To the
extent that any provision of an agreement is in violation of
H.R. 1180, the provision would be superseded by the
requirements of the FLSA.\28\
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\28\This relationship between the agreement and the parameters
stated in law is the same as applies to public-sector compensatory
time. See 29 C.F.R. Sec. 553.23(a)(2).
---------------------------------------------------------------------------
Employee eligibility requirements
To be eligible to choose compensatory time, an employee
must have worked at least 1,000 hours in a period of continuous
employment with the employer during the 12-month period
preceding the date the employee agrees to receive or receives
compensatory time. Under the bill, this 1,000 hour requirement
is assessed on a ``rolling'' basis, such that to be eligible to
enter an agreement to receive compensatory time, or to actually
receive compensatory time in lieu of cash compensation for
overtime, such employee must have worked at least 1,000 hours
in a period of continuous employment with the employer in the
12-month period prior to either entering such an agreement or
actually receiving compensatory time.
The Committee expects that the phrase ``period of
continuous employment with the employer'' will be construed to
encompass an unbroken period of time in which an employee is
maintained on the payroll of a single employer (or, as
applicable, its successor) on active status, or on inactive
status where the employer has a reasonable expectation that the
employee will return to duty (e.g., an employee on paid or
unpaid leave whom the employer reasonably expects will return
to duty will generally be considered to be in a ``period of
continuous employment'' with the employer).
Compensatory time accrual limit
H.R. 1180 provides that an employee may accrue no more than
160 hours of compensatory time. This is in contrast to the
public-sector provisions in current law that allow most
employees to accrue 240 hours of compensatory time (in some
occupations, employees may accrue up to 480 hours). The lower
limit for private-sector employees is designed to protect both
employers and employees against accrual of excessive amounts of
compensatory time liability.
The Committee emphasizes that this 160-hour limit is the
legal maximum that may be accrued. Employers and employees may
establish a lower limit for compensatory time accrual, and
employees, of course, may decline compensatory time as payment
for overtime altogether.
Monetary compensation for unused compensatory time
The bill requires annual ``cash out'' of all accrued
compensatory time. Such annual cash out protects both employers
and employees against accrual of excessive amounts of
compensatory time liability. Unless an alternative date is
established by the employer, the annual cash out date is the
end of the calendar year (December 31), and the employee must
be paid for the accrued compensatory time not later than the
following January 31. The employer may establish an alternative
annual cash out date, in which case the employer must pay the
employee for any accrued and unused compensatory time within 31
days of the end of the 12-month period. Subject to continued
agreement between the employer and employee, the employee may
begin to accrue compensatory time anew after the cash out date.
An employer may cash out some accrued compensatory time
more frequently than annually. However, the employer must
provide an employee with 30 days' notice prior to cashing out
the employee's accrued, unused compensatory time, and may only
cash out accrued compensatory time that is in excess of 80
hours.
An employee may also choose to cash out his or her accrued
compensatory time at any time. The employee may submit a
written request to such effect to the employer, upon which
request the employer must cash out the employee's accrued
compensatory time within 30 days of receiving the request.
There is no limit on an employee's ability to cash out accrued
compensatory time.
As described above, an employee who has an individual
agreement with his or her employer regarding compensatory time
may withdraw that agreement at any time. Similarly, an employer
who offers compensatory time to employees may discontinue such
policy upon giving employees 30 days' notice, except where a
collective bargaining agreement provides otherwise. In the
event an employer does discontinue offering compensatory time,
any hours of compensatory time already accrued by employees
remain the employees' hours and must be so recognized by the
employer.
The bill provides that upon the voluntary or involuntary
termination of employment, an employee's unused compensatory
time must be cashed out by the employer, and it is to be
treated as a wage payment due and owed to the employee. The
bill further provides that any payment owed to an employee or
former employee (whether because of the annual cash out of all
accrued compensatory time, because of the employee's request to
cash out accrued compensatory time, because of the employer's
decision to cash out certain accrued compensatory time as
described above, or because of the voluntary or involuntary
termination of employment) shall be considered unpaid overtime
compensation owed to the employee. In addition to making
explicit that the remedies for unpaid overtime compensation
under the FLSA apply, this provision also assures that any
unpaid, accrued compensatory time is treated as unpaid employee
wages in the event of the employer's bankruptcy. Thus, any
unpaid, accrued compensatory time would have the same priority
claim and legal status as other employee wages under both the
FLSA and the Bankruptcy Code. As described above, the payment
for accrued compensatory time is owed to the employee or former
employee when the claim for payment is made, and it takes the
same priority as other wages as of that date.
In all cases in which accrued compensatory time is cashed
out, the rate of cash out must be the employee's regular rate
of pay when the compensatory time was accrued or the employee's
regular rate when the employee cashed out, whichever is higher.
Thus, for example, if compensatory time is accrued during the
course of a year and the employee has received an increase in
his or her hourly rate of pay during the year after the
compensatory time is accrued, the cash out rate at the end of
the year would be the employee's regular rate of pay at the end
of the year, reflecting the employee's increase in pay, even if
the compensatory time was accrued prior to the pay increase.
Notice to employees
H.R. 1180 requires the Secretary of Labor to revise the
posting requirements under the regulations of the FLSA to
reflect the compensatory time provisions of the bill. This will
help to ensure that employees are informed of the circumstances
under which compensatory time may be offered by an employer,
the employees' right to accept or decline such offer, and the
employees' rights regarding the use of compensatory time. The
Secretary of Labor may, of course, promulgate such regulations
as necessary in order to implement the provisions of H.R. 1180.
Compensatory time and employment benefits
Opponents of H.R. 1180 have raised the unfounded claim that
compensatory time would reduce an employee's pension benefits.
The overtime hours for which an employee receives compensatory
time are hours for which the employee is paid or entitled to
pay for the performance of duties for the employer. Therefore,
they would fall within the definition of ``hours of service''
under the Employee Retirement Income Security Act, for which
the employee would be credited for purposes of accrual,
participation, and vesting of benefits.\29\
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\29\C.F.R. 2530.200b-2.
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Obviously, in some cases the employee also has not worked
hours that he or she otherwise would have when the employee
uses (as compared to accrues) compensatory time off. Thus, the
employee's total hours worked may be reduced, not by the
earning of compensatory time, but by substituting the
compensatory time off for other hours of work. If, as a result,
the employee works fewer total hours, the employee's total
monetary earnings and credits for benefits may be less. But
that effect is no different than any other decision by the
employee (for example, refusing optional overtime work) that
reduces the total number of hours actually worked by the
employee. Of course, employees who choose to take compensatory
time off have elected to receive a benefit that enables them to
spend more time with their family or for whatever purpose they
wish, which is not available to employees who elected to
receive cash wages.
Similarly, opponents have suggested compensatory time
disadvantages an employee's eligibility for unemployment
benefits or the amount of unemployment benefits to which the
employee would be entitled. H.R. 1180 clearly treats
compensatory time as employee wages, and any payments for
accrued compensatory time would be treated the same as other
employee wages under state laws, for purposes of eligibility
for unemployment benefits and determination of the amount of
benefits. Receipt of compensation for accrued compensatory time
when an employee's employment is terminated may, depending on
state law on ``disqualifying income,'' defer receipt of
unemployment benefits, but it would not diminish the total
benefits to which the employee may be entitled. However, to
suggest, as some have, that compensatory time payments should
not be considered as wages in any unemployment benefit
determination would be to turn existing federal policy on
``disqualifying income'' on its head, by dictating to the
States how this form of employee wages should be treated.
Employee use of accrued compensatory time
Under H.R. 1180, an employee who has accrued compensatory
time may generally use the time whenever he or she so desires.
The only limitations the bill puts on the use of compensatory
time is that the employee's request to use compensatory time
off be made a reasonable time in advance of using it, and
employee's use of time off does not ``unduly disrupt'' the
employer's operations. It is the Committee's intent that an
employer shall grant the employee's request to use accrued
compensatory time off on the date and/or time requested by the
employee, if the use on such date and/or time does not ``unduly
disrupt'' the employer's operations, and if the employee has
requested use of the accrued compensatory time within a
reasonable period in advance of the date and/or time requested.
These conditions on the use of accrued compensatory time
are the same as those in current law for public-sector use of
compensatory time under Section 7(o) of the FLSA.\30\
Regulations issued by the Department of Labor under Section
7(o) define ``unduly disrupt'' as follows:
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\30\29 U.S.C. Sec. 207(o)(5).
When an employer receives a request for compensatory
time off, it shall be honored unless to do so would be
``unduly disruptive'' to the agency's operations. Mere
inconvenience to the employer is an insufficient basis
for denial of a request for compensatory time off. For
an agency to turn down a request from an employee for
compensatory time off requires that it should
reasonably and in good faith anticipate that it would
impose an unreasonable burden on the agency's ability
to provide services of acceptable quality and quantity
for the public during the time requested without the
use of the employee's services.\31\
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\31\29 C.F.R. Sec. 553.25(d); see also Department of Labor, Wage
and Hour Opinion Letter, 1994 DOLWH LEXIS 71 (Aug. 19, 1994) (``It is
our position, notwithstanding [a collective bargaining agreement to the
contrary], that an agency may not turn down a request from an employee
for compensatory time off unless it would impose an unreasonable burden
on the agency's ability to provide service of acceptable quality and
quantity for the public during the time requested without the use of
the employee's service. The fact that overtime may be required of one
employee to permit another employee to use compensatory time off would
not be a sufficient reason for an employer to claim that the
compensatory time off request is unduly disruptive.'').
Court decisions regarding public-sector compensatory time
have also shown that the ``unduly disrupt'' standard is narrow
and does not allow an employer to control an employee's use of
compensatory time off. In Heitmann v. City of Chicago, the
Seventh Circuit Court of Appeals found that Section 7(o) of the
FLSA and the Department of Labor's corresponding regulations
require an employer to grant compensatory time off on the date
and time requested by an employee, unless doing so would cause
undue disruption.\32\ The court noted that requiring an
employer to honor an employee's specific request for
compensatory time off, absent undue disruption of the
employer's operations, appropriately ``makes compensatory leave
more attractive to workers and hence a more adequate substitute
for money, the Fair Labor Standards Act's principal response to
overtime work.''\33\
---------------------------------------------------------------------------
\32\560 F.3d 642, 646 (7th Cir. 2009). But see Mortensen v. County
of Sacramento, 368 F.3d 298 (9th Cir. 2004) (finding that the public-
sector compensatory time provisions require only that an employee be
allowed to use compensatory time off within a ``reasonable period'' of
the date requested for such leave, unless doing so would ``unduly
disrupt'' the agency's operations); Houston Policy Officers Union v.
City of Houston, 330 F.3d 298 (5th Cir. 2003) (same).
\33\Heitmann, 560 F.3d at 647.
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Similarly, in Beck v. City of Cleveland, the Sixth Circuit
Court of Appeals found that ``to grant the City the unlimited
discretion to deny compensatory leave requests relieves the
City of establishing the undue disruption requirement imposed
by Congress.''\34\ As a result, the court held that the
plaintiffs-police officers' ``compensatory leave requests must
be granted absent `clear and affirmative evidence' of an undue
disruption of the City's provision of police services for its
citizens.''\35\
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\34\390 F.3d 912, 925 (6th Cir. 2005).
\35\Id. at 926; see also DeBraska v. City of Milwaukee, 131 F.
Supp. 2d 1032 (E.D. Wis. 2000) (deferring to the Department of Labor's
interpretation of its regulations as requiring that an employee's
specific compensatory time off requested must be granted absent undue
disruption of the employer's operations).
---------------------------------------------------------------------------
The Committee also notes that the ``unduly disrupt''
standard included in H.R. 1180 is similar to the standard in
the Family and Medical Leave Act (FMLA) that limits an
employee's ability to take leave for medical treatments for the
employee or a member of his or her family (``the employee shall
make a reasonable effort to schedule the treatment so as not to
disrupt unduly the operations of the employer'').\36\
---------------------------------------------------------------------------
\36\29 U.S.C. Sec. 2612(e). As one district court said in
construing these provisions of the FMLA, ``The FMLA also does not give
employees the unfettered right to take time off subject only to their
own convenience without any consideration of its effect upon the
employer.'' Kaylor v. Fannin Regional Hospital, 946 F.Supp. 988, 999
(N.D. Ga. 1996).
---------------------------------------------------------------------------
Given the long history of this language in the FLSA with
regard to compensatory time in the public sector, and the
inclusion of similar language in the FMLA, it is simply
dishonest for the opponents of private-sector use of
compensatory time to claim that H.R. 1180 allows the employer
to control when compensatory time off is used. The employer's
ability to deny compensatory time off under H.R. 1180 is very
limited. But the employer must be able to maintain its
operations. If that ability is not reflected in the law, then
no employer will offer compensatory time as an option for
employees, and the Committee's efforts to respond to employees'
desires to have this flexibility will be of no effect.
Furthermore, providing for an employee's use of compensatory
time off without any regard to workload or business demands is
simply unfair to the employee's coworkers, who in many cases
would have to handle the workload of the absent employee. Just
as was the case in 1985 when workers in the public sector were
permitted to choose compensatory time. H.R. 1180 seeks ``to
balance the employee's right to make use of comp time that has
been earned and the employer's need for flexibility in
operations.''\37\
---------------------------------------------------------------------------
\37\Report on S. 1570, Committee on Labor and Human Resources, U.S.
Senate, 99th Congress, First Session, Senate Report No. 99-159 at 11.
---------------------------------------------------------------------------
Enforcement and remedies
As an amendment to the FLSA, the compensatory time
provisions in H.R. 1180 are subject to the applicable
enforcement and remedies of the FLSA. Currently under the FLSA,
Section 15(a)(2) makes it unlawful for any person to violate
any provision of Section 7, of which the compensatory time
provisions of H.R. 1180 would be a part.\38\ In addition,
Section 15(a)(3) makes it unlawful to ``discharge or in any
other manner discriminate against any employee because such
employee has filed any complaint or instituted or caused to be
instituted any proceeding under or related to'' the employee's
rights under the FLSA.\39\
---------------------------------------------------------------------------
\38\29 U.S.C. Sec. 215(a)(2).
\39\Id. Sec. 215(a)(3).
---------------------------------------------------------------------------
Section 16(b) of the FLSA authorizes an action by an
employee against his or her employer for any violations of
Section 7.\40\ The suit may be filed in any federal or state
court. An employee may also file a complaint with the
Department of Labor. The Department of Labor generally attempts
to resolve such complaints; however, the Department of Labor
may also sue the employer for damages on behalf of the employee
or employees whose rights were violated, or may also seek
injunctive relief.\41\ Section 16(e) also authorizes the
Secretary of Labor to seek civil penalties of up to $1,925 per
violation against an employer who ``willfully or repeatedly''
violates Section 7.\42\ In any action in which the employee has
been wrongfully denied overtime compensation, the FLSA
authorizes damages equal to the amount of the unpaid
compensation required by the FLSA and an equal amount as
liquidated damages;\43\ liquidated damages may be reduced or
eliminated if the court finds that the employer acted in good
faith and had reasonable grounds for believing that he or she
was in compliance with the FLSA.\44\ In any action brought by
an employee, the employee may also be paid for his or her
attorneys' fees and costs.\45\
---------------------------------------------------------------------------
\40\Id. Sec. 216(b).
\41\Id. Sec. 217.
\42\Id. Sec. 216(e).
\43\Id. Sec. 216(b).
\44\Id. Sec. 260.
\45\Id. Sec. 216(b).
---------------------------------------------------------------------------
To be clear, H.R. 1180 retains all of the enforcement
mechanisms and remedies that currently exist under the FLSA.
H.R. 1180 also includes a provision prohibiting an employer
from directly or indirectly intimidating, threatening,
coercing, or attempting to intimidate, threaten, or coerce any
employee for purposes of interfering with the employee's right
to take or not take compensatory time off in lieu of cash
overtime, or to use accrued compensatory time. Curiously,
opponents of compensatory time have claimed that H.R. 1180
would allow employers to force employees to take compensatory
time against their will or to use accrued compensatory time at
the employer's convenience. Those claims are contrary to the
plain language of the bill.
The language of H.R. 1180 prohibiting intimidation,
threats, and coercion, or attempts thereto, is identical to
prohibitory language applicable to federal employees under the
FMLA\46\ and the Federal Employees Flexible and Compressed Work
Schedules Act.\47\ The term ``intimidate, threaten, or coerce''
has been defined under those laws as ``promising to confer or
conferring any benefit (such as appointment, promotion, or
compensation), or taking or threatening to take any reprisal
(such as deprivation of appointment, promotion, or
compensation).''\48\ Thus, H.R. 1180 prohibits an employer, for
example, from forcing employees to take compensatory time off
in lieu of monetary compensation by offering overtime hours
only to employees who ask for compensation in the form of
compensatory time.
---------------------------------------------------------------------------
\46\5 U.S.C. Sec. 6385.
\47\Id. Sec. 6132.
\48\Id. Sec. 6385.
---------------------------------------------------------------------------
The bill also creates a new remedy under the FLSA
applicable to employers who violate the anti-coercion language
just described. Section 3 of H.R. 1180 provides that an
employer who violates the anti-coercion provision shall be
liable to the employee for the employee's rate of compensation
for each hour of compensatory time accrued and an equal amount
as liquidated damages. If the employee has already used some or
all of the compensatory time, the amount to be paid as damages
is reduced by that amount.
Opponents of compensatory time have claimed that, while it
may be prohibited conduct under H.R. 1180, there is no sanction
in H.R. 1180 for an employer who either forces an employee to
take compensatory time off or denies the employee the right to
use accrued compensatory time. In both cases these claims are
wrong. An employee who is unlawfully forced to take
compensatory time off may receive the amount of the employee's
compensation for each hour of compensatory time plus an equal
amount of liquidated damages, less the amount of compensation
the employee has already received for those hours of
compensatory time. The Committee expects that the Department of
Labor will make use of the regulatory process to clarify the
application of the remedies provisions contained in H.R. 1180
to these and other potential scenarios.
In addition, there is a ``self-policing'' aspect: the
employee retains his or her compensation and can demand to cash
out at his or her current rate of pay or the rate when the time
was earned, whichever is higher. In short, the employer does
not benefit by denying the employee the use of his or her
compensatory time, and where necessary, there are effective
sanctions under the bill and the FLSA for employers who violate
the employee protections and other provisions of H.R. 1180.
GAO report
As detailed above, an amendment offered by then-Rep. Gibson
passed the House during Floor debate in the 113th Congress on
H.R. 1406. Language from the amendment was included in H.R.
1180 as introduced, which requires GAO to report two years
after the bill's enactment, and each of the three years
thereafter, on the use of compensatory time in the private
sector. GAO must provide information on the extent to which
employers are providing compensatory time and the extent to
which employees voluntarily select compensatory time. In
addition, the report will include an accounting of the number
of complaints alleging compensatory time violations filed with
the Secretary of Labor, enforcement actions commenced by the
Secretary, the status of such complaints and actions, and an
account of any unpaid wages, damages, penalties, injunctive
relief, or other remedies obtained or sought by the Secretary,
in connection with such actions. This information will assist
Congress in evaluating the private-sector's use of compensatory
time and further inform oversight of the rules related to such
use.
Conclusion
For many Americans, balancing the demands of family and
work can be difficult. Each worker faces a unique set of
challenges and responsibilities, be it caring for an aging
relative, attending a parent-teacher conference, or seeing a
son or daughter deploy overseas. Government employees have long
been able to choose paid time off as compensation for working
overtime hours, allowing these public-sector employees greater
flexibility to meet family obligations. However, the federal
government prohibits private-sector workers from enjoying this
same benefit. H.R. 1180 removes this obstacle in federal law.
Opponents of H.R. 1180 continue to ignore the legislation's
basic principle: worker choice. Under the legislation, workers
choose whether to accept compensatory time; workers choose when
to withdraw from a compensatory time agreement; workers choose
when to cash out their accrued compensatory time; and workers
choose when to use their paid time off so long as they follow
the same guidelines public employees do. The Working Families
Flexibility Act of 2017 is commonsense, pro-worker legislation
that helps American workers better balance the needs of family
and the workplace.
Section-by-Section Analysis
Section 1. Short title
This Act may be cited as the Working Families Flexibility
Act of 2017.
Section 2. Compensatory time
An employee may receive, in lieu of monetary overtime
compensation, compensatory time off at a rate not less than one
and one-half hours for each hour of overtime worked.
An employer may provide compensatory time to employees only
if such time is in accordance with the applicable provisions of
a collective bargaining agreement between the employer and the
labor organization that has been certified or recognized as the
representative of the employees under applicable law.
In the case of employees who are not represented by a labor
organization that has been certified or recognized as the
representative of such employees under applicable law, there
must be an agreement arrived at between the employer and
employee before the performance of the work and affirmed by a
written or otherwise verifiable record maintained in accordance
with Section 11(c) of the Fair Labor Standards Act, in which
the employer has offered and the employee has chosen to receive
compensatory time in lieu of monetary overtime compensation;
such agreement must be entered into knowingly and voluntarily
by such employee and not as a condition of employment. An
employee may not agree to receive compensatory time unless that
employee has worked 1,000 hours in continuous employment with
the employer in the 12-month period prior to the date of the
agreement or receipt of compensatory time.
An employee may accrue not more than 160 hours of
compensatory time. Not later than January 31 of each calendar
year, the employee's employer shall provide monetary
compensation for any unused compensatory time accrued during
the preceding calendar year that was not used prior to December
31 of the preceding year. Monetary compensation must be
provided at the regular rate earned when the compensatory time
was accrued or at the regular rate earned when the monetary
compensation was provided, whichever is higher. An employer may
designate and communicate to the employees a 12-month period
other than the calendar year, in which case compensation shall
be provided not later than 31 days after the end of the 12-
month period.
An employer may provide monetary compensation for an
employee's unused compensatory time in excess of 80 hours at
any time after giving the employee at least 30 days' notice.
The compensation shall be provided at the regular rate earned
when the compensatory time was accrued or the regular rate
earned when the monetary compensation was provided, whichever
is higher.
Except where a collective bargaining agreement provides
otherwise, an employer that has adopted a policy offering
compensatory time to employees may discontinue such policy upon
giving employees 30 days' notice.
An employee may withdraw from an agreement or understanding
to accrue compensatory time at any time. An employee may also
request in writing that monetary compensation be provided, at
any time, for all compensatory time accrued that has not yet
been used. Within 30 days of receipt of the written request,
the employer shall provide the employee with the monetary
compensation at a rate received when the compensatory time was
accrued or at the regular rate when the monetary compensation
was provided, whichever is higher.
An employer that provides compensatory time to employees
shall not directly or indirectly intimidate, threaten, or
coerce or attempt to intimidate, threaten, or coerce any
employee for the purpose of interfering with such employee's
rights to request or not request compensatory time off in lieu
of payment of monetary overtime compensation for overtime
hours, or requiring any employee to use such compensatory time.
An employee who has accrued compensatory time off shall,
upon the voluntary or involuntary termination of employment, be
paid for such unused compensatory time.
If compensation is to be paid to an employee for accrued
compensatory time off, the compensation will be paid at a rate
not less than the regular rate earned by an employee when the
compensatory time was accrued or the regular rate earned by
such employee when the monetary compensation was provided,
whichever is higher.
Any payment owed to an employee for unused compensatory
time shall be considered to be unpaid overtime compensation.
An employee who has accrued compensatory time off and has
requested the use of such compensatory time shall be permitted
by the employee's employer to use such 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.
For the purposes of this subsection, the term employee does
not include an employee of a public agency.
For the purposes of this subsection, the terms overtime
compensation and compensatory time shall have the meanings
given by Section (7)(o)(7) of the Fair Labor Standards Act.
Section 3. Remedies
An employer that violates the anti-coercion provisions
(Section 7(s)(4)) of this Act shall be liable to the employee
affected in the amount of the rate of compensation (determined
in accordance with Section 7(s)(6)(A)) for each hour of
compensatory time accrued by the employee and an additional
equal amount as liquidated damages, reduced by the amount of
such rate of compensation for each hour of compensatory time
used by the employee.
Section 4. Notice to employees
Not later than 30 days after the date of the enactment of
this Act, the Secretary of Labor shall revise the materials
provided to employers for purposes of a notice explaining the
Fair Labor Standards Act to employees so that the notice
reflects the amendments made by this bill to the Act.
Section 5. GAO report
Beginning two years after the date of enactment of this
Act, the Comptroller General of the United States shall submit
a report to Congress providing data concerning the extent to
which employers provide compensatory time and the extent to
which employees opt to receive compensatory time; the number of
complaints alleging a violation of the Act's provisions; the
number of enforcement actions commenced by the Secretary or
initiated by the Secretary on behalf of any employee for
alleged violations of the Act; the disposition or status of
such complaints and actions; and an account of any unpaid
wages, damages, penalties, injunctive relief, or other remedies
obtained or sought by the Secretary in conjunction with such
actions.
Section 6. Sunset
This Act and all amendments made by this Act shall expire
five years after its enactment.
Explanation of Amendments
The amendments, including the amendment in the nature of a
substitute, are explained in the body of this report.
Application of Law to the Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. H.R. 1180 amends the Fair Labor Standards Act of 1938
to provide compensatory time for employees in the private
sector.
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act (as amended by Section 101(a)(2) of the Unfunded
Mandates Reform Act, P.L. 104-4) requires a statement of
whether the provisions of the reported bill include unfunded
mandates. This issue is addressed in the CBO letter.
Earmark Statement
H.R. 1180 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House rule XIII, the
goal of H.R. 1180 is provide compensatory time for employees in
the private sector.
Duplication of Federal Programs
No provision of H.R. 1180 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Disclosure of Directed Rule Makings
The committee estimates that enacting H.R. 1180 does not
specifically direct the completion of any specific rule makings
within the meaning of 5 U.S.C. 551.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the committee's oversight findings and recommendations are
reflected in the body of this report.
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, the committee has received
the following estimate for H.R. 1180 from the Director of the
Congressional Budget Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 27, 2017.
Hon. Virginia Foxx,
Chairwoman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
Dear Madam Chairwoman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1180, the Working
Families Flexibility Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Christina
Hawley Anthony.
Sincerely,
Keith Hall, Director.
Enclosure.
H.R. 1180--Working Families Flexibility Act of 2017
H.R. 1180 would amend the Fair Labor Standards Act of 1938
to provide compensatory time for employees in the private
sector. In lieu of overtime pay, employees could receive
compensatory time off at a rate of not less than one and one-
half hours for each hour of employment for which overtime pay
would otherwise have been required. Such compensatory time
could be provided only in accordance with a collective
bargaining agreement or with the consent of affected employees.
The bill also would require the Government Accountability
Office (GAO) to report to the Congress about the extent to
which employers provide such compensatory time as well as the
number of complaints alleging violations of the provisions and
the disposition of those complaints, including any enforcement
actions. The changes would be effective for five years after
enactment of the bill. Based on the cost of similar activities
by GAO, CBO estimates that implementing the bill would cost
less than $500,000 annually; such spending would be subject to
the availability of appropriated funds.
CBO estimates enacting H.R. 1180 would not affect direct
spending or revenues; therefore, pay-as-you-go procedures do
not apply. CBO estimates that enacting H.R. 1180 would not
increase net direct spending or on-budget deficits in any of
the four consecutive 10-year periods beginning in 2028.
H.R. 1180 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would impose no costs on state, local, or tribal governments.
The CBO staff contact for this estimate is Christina Hawley
Anthony. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 1180.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when the committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 402 of the Congressional Budget Act.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (new matter is
printed in italic and existing law in which no change is
proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FAIR LABOR STANDARDS ACT OF 1938
* * * * * * *
maximum hours
Sec. 7. (a)(1) Except as otherwise provided in this section,
no employer shall employ any of his employees who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, for a
workweek longer than forty hours unless such employee receives
compensation for his employment in excess of the hours above
specified at a rate not less than one and one-half times the
regular rate at which he is employed.
(2) No employer shall employ any of his employees who in any
workweek is engaged in commerce or in the production of goods
for commerce, or is employed in an enterprise engaged in
commerce or in the production of goods for commerce, and who in
such workweek is brought within the purview of this subsection
by the amendments made to this Act by the Fair Labor Standards
Amendments of 1966--
(A) for a workweek longer than forty-four hours
during the first year from the effective date of the
Fair Labor Standards Amendments of 1966,
(B) for a workweek longer than forty-two hours during
the second year from such date, or
(C) for a workweek longer than forty hours after the
expiration of the second year from such date,
unless such employee receives compensation for his employment
in excess of the hours above specified at a rate not less than
one and one-half times the regular rate at which he is
employed.
(b) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of that
specified in such subsection without paying the compensation
for overtime employment prescribed therein if such employee is
so employed--
(1) in pursuance of an agreement, made as a result of
collective bargaining by representatives of employees
certified as bona fide by the National Labor Relations
Board, which provides that no employee shall be
employed more than one thousand and forty hours during
any period of twenty-six consecutive weeks, or
(2) in pursuance of an agreement, made as a result of
collective bargaining by representatives of employees
certified as bona fide by the National Labor Relations
Board which provides that during a specified period of
fifty-two consecutive weeks the employee shall be
employed not more than two thousand two hundred and
forty hours and shall be guaranteed not less than one
thousand eight hundred and forty hours (or not less
than forty-six weeks at the normal number of hours
worked per week, but not less than thirty hours per
week) and not more than two thousand and eighty hours
of employment for which he shall receive compensation
for all hours guaranteed or worked at rates not less
than those applicable under the agreement to the work
performed and for all hours in excess of the guaranty
which are also in excess of the maximum workweek
applicable to such employee under subsection (a) or two
thousand and eighty in such period at rates not less
than one and one-half times the regular rate at which
he is employed; or
(3) by an independently owned and controlled local
enterprise (including an enterprise with more than one
bulk storage establishment) engaged in the wholesale or
bulk distribution of petroleum products if--
(A) the annual gross volume of sales of such
enterprise is less than $1,000,000 exclusive of
excise taxes.
(B) more than 75 per centum of such
enterprise's annual dollar volume of sales is
made within the State in which such enterprise
is located, and
(C) not more than 25 per centum of the annual
dollar volume of sales of such enterprise is to
customers who are engaged in the bulk
distribution of such products for resale;
and if such employee receives compensation for employment in
excess of twelve hours in any workday, or for employment in
excess of fifty-six hours in any workweek, as the case may be,
at a rate not less than one and one-half times the regular rate
at which he is employed.
(e) As used in this section the ``regular rate'' at which an
employee is employed shall be deemed to include all
remuneration for employment paid to, or on behalf of, the
employee, but shall not be deemed to include--
(1) sums paid as gifts; payments in the nature of
gifts made at Christmas time or on other special
occasions, as a reward for service, the amounts of
which are not measured by or dependent on hours worked,
production, or efficiency;
(2) payments made for occasional periods when no work
is performed due to vacation, holiday, illness, failure
of the employer to provide sufficient work or other
similar cause; reasonable payments for traveling
expenses, or other expenses, incurred by an employee in
the furtherance of his employer's interests and
properly reimburseable by the employer; and other
similar payments to any employee which are not made as
compensation for his hours of employment;
(3) sums paid in recognition of services performed
during a given period if either, (a) both the fact that
payment is to be made and the amount of the payment are
determined at the sole discretion of the employer at or
near the end of the period and not pursuant to any
prior contract, agreement, or promise causing the
employee to expect such payments regularly; or (b) the
payments are made pursuant to a bona fide profit-
sharing plan or trust or bona fide thrift or savings
plan, meeting the requirements of the Secretary of
Labor set forth in appropriate regulations which he
shall issue, having due regard among other relevant
facts, to the extent to which the amounts paid to the
employee are determined without regard to hours of
work, production, or efficiency; or (c) the payments
are talent fees (as such talent fees are defined and
delimited by regulations of the Secretary) paid to
performers, including announcers, on radio and
television programs;
(4) contributions irrevocably made by an employer to
a trustee or third person pursuant to a bona fide plan
for providing old-age retirement, life, accident, or
health insurance or similar benefits for employees;
(5) extra compensation provided by a premium rate
paid for certain hours worked by the employee in any
day or workweek because such hours are hours worked in
excess of eight in a day or in excess of the maximum
workweek applicable to such employee under subsection
(a) or in excess of the employee's normal working hours
or regular working hours, as the case may be;
(6) extra compensation provided by a premium rate
paid for work by the employee on Saturdays, Sundays,
holidays, or regular days of rest, or on the sixth or
seventh day of the workweek, where such premium rate is
not less than one and one-half times the rate
established in good faith for like work performed in
nonovertime hours on other days;
(7) extra compensation provided by a premium rate
paid to the employee, in pursuance of an applicable
employment contract or collective-bargaining agreement,
for work outside of the hours established in good faith
by the contract or agreement as the basic, normal, or
regular workday (not exceeding eight hours) or workweek
(not exceeding the maximum workweek applicable to such
employee under subsection (a)), where such premium rate
is not less than one and one-half times the rate
established in good faith by the contract or agreement
for like work performed during such workday or
workweek; or
(8) any value or income derived from employer-
provided grants or rights provided pursuant to a stock
option, stock appreciation right, or bona fide employee
stock purchase program which is not otherwise
excludable under any of paragraphs (1) through (7) if--
(A) grants are made pursuant to a program,
the terms and conditions of which are
communicated to participating employees either
at the beginning of the employee's
participation in the program or at the time of
the grant;
(B) in the case of stock options and stock
appreciation rights, the grant or right cannot
be exercisable for a period of at least 6
months after the time of grant (except that
grants or rights may become exercisable because
of an employee's death, disability, retirement,
or a change in corporate ownership, or other
circumstances permitted by regulation), and the
exercise price is at least 85 percent of the
fair market value of the stock at the time of
grant;
(C) exercise of any grant or right is
voluntary; and
(D) any determinations regarding the award
of, and the amount of, employer-provided grants
or rights that are based on performance are--
(i) made based upon meeting
previously established performance
criteria (which may include hours of
work, efficiency, or productivity) of
any business unit consisting of at
least 10 employees or of a facility,
except that, any determinations may be
based on length of service or minimum
schedule of hours or days of work; or
(ii) made based upon the past
performance (which may include any
criteria) of one or more employees in a
given period so long as the
determination is in the sole discretion
of the employer and not pursuant to any
prior contract.
(f) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of the
maximum workweek applicable to such employee under subsection
(a) if such employee is employed pursuant to a bona fide
individual contract, or pursuant to an agreement made as a
result of collective bargaining by representatives of
employees, if the duties of such employee necessitate irregular
hours of work, and the contract or agreement (1) specifies a
regular rate of pay of not less than the minimum hourly rate
provided in subsection (a) or (b) of section 6 (whichever may
be applicable) and compensation at not less than one and one-
half times such rate for all hours worked in excess of such
maximum workweek, and (2) provides a weekly guaranty of pay for
not more than sixty hours based on the rates so specified.
(g) No employer shall be deemed to have violated subsection
(a) by employing any employee for a workweek in excess of the
maximum workweek applicable to such employee under such
subsection if, pursuant to an agreement or understanding
arrived at between the employer and the employee before
performance of the work, the amount paid to the employee for
the number of hours worked by him in such workweek in excess of
the maximum workweek applicable to such employee under such
subsection--
(1) in the case of an employee employed at piece
rates, is computed at piece rates not less than one and
one-half times the bona fide piece rates applicable to
the same work when performed during nonovertime hours;
or
(2) in the case of an employee performing two or more
kinds of work for which different hourly or piece rates
have been established, is computed at rates not less
than one and one-half times such bona fide rates
applicable to the same work when performed during
nonovertime hours; or
(3) is computed at a rate not less than one and one-
half times the rate established by such agreement or
understanding as the basic rate to be used in computing
overtime compensation thereunder: Provided, That the
rate so established shall be authorized by regulation
by the Secretary of Labor as being substantially
equivalent to the average hourly earnings of the
employee, exclusive of overtime premiums, in the
particular work over a representative period of time;
and if (i) the employee's average hourly earnings for the
workweek exclusive of payments described in paragraphs (1)
through (7) of subsection (e) are not less than the minimum
hourly rate required by applicable law, and (ii) extra overtime
compensation is properly computed and paid on other forms of
additional pay required to be included in computing the regular
rate.
(h)(1) Except as provided in paragraph (2), sums excluded
from the regular rate pursuant to subsection (e) shall not be
creditable toward wages required under section 6 or overtime
compensation required under this section.
(2) Extra compensation paid as described in paragraphs (5),
(6), and (7) of subsection (e) shall be creditable toward
overtime compensation payable pursuant to this section.
(i) No employer shall be deemed to have violated subsection
(a) by employing any employee of a retail or service
establishment for a workweek in excess of the applicable
workweek specified therein, if (1) the regular rate of pay of
such employee is in excess of one and one-half times the
minimum hourly rate applicable to him under section 6, and (2)
more than half his compensation for a representative period
(not less than one month) represents commissions on goods or
services. In determining the proportion of compensation
representing commissions, all earnings resulting from the
application of a bona fide commission rate shall be deemed
commissions on goods or services without regard to whether the
computed commissions exceed the draw or guarantee.
(j) No employer engaged in the operation of a hospital or an
establishment which is an institution primarily engaged in the
care of the sick, the aged, or the mentally ill or defective
who reside on the premises shall be deemed to have violated
subsection (a) if, pursuant to an agreement or understanding
arrived at between the employer and the employee before
performance of the work, a work period of fourteen consecutive
days is accepted in lieu of the workweek of seven consecutive
days for purposes of overtime computation and if, for his
employment in excess of eight hours in any workday and in
excess of eighty hours in such fourteen-day period, the
employee receives compensation at a rate of not less than one
and one-half times the regular rate at which he is employed.
(k) No public agency shall be deemed to have violated
subsection (a) with respect to the employment of any employee
in fire protection activities or any employee in law
enforcement activities (including security personnel in
correctional institutions) if--
(1) in a work period of 28 consecutive days the
employee receives for tours of duty which in the
aggregate exceed the lesser of (A) 216 hours, or (B)
the average number of hours (as determined by the
Secretary pursuant to section 6(c)(3) of the Fair Labor
Standards Amendments of 1974) in tours of duty of
employees engaged in such activities in work periods of
28 consecutive days in calendar year 1975; or
(2) in the case of such employee to whom a work
period of at least 7 but less than 28 days applies, in
his work period the employee receives for tours of duty
which in the aggregate exceed a number of hours which
bears the same ratio to the number of consecutive days
in his work period as 216 hours (or if lower, the
number of hours referred to in clause (B) of paragraph
(1)) bears to 28 days;
compensation at a rate not less than one and one-half times the
regular rate at which he is employed.
(l) No employer shall employ any employee in domestic service
in one or more households for a workweek longer than forty
hours unless such employee receives compensation for such
employment in accordance with subsection (a).
(m) For a period or periods of not more than fourteen
workweeks in the aggregate in any calendar year, any employer
may employ any employee for a workweek in excess of that
specified in subsection (a) without paying the compensation for
overtime employment prescribed in such subsection, if such
employee--
(1) is employed by such employer--
(A) to provide services (including stripping
and grading) necessary and incidental to the
sale at auction of green leaf tobacco of type
11, 12, 13, 14, 21, 22, 23, 24, 31, 35, 36, or
37 (as such types are defined by the Secretary
of Agriculture), or in auction sale, buying,
handling, stemming, redrying, packing, and
storing of such tobacco,
(B) in auction sale, buying, handling,
sorting, grading, packing, or storing green
leaf tobacco of type 32 (as such type is
defined by the Secretary of Agriculture), or
(C) in auction sale, buying, handling,
stripping, sorting, grading, sizing, packing,
or stemming prior to packing, of perishable
cigar leaf tobacco of type 41, 42, 43, 44, 45,
46, 51, 52, 53, 54, 55, 61, or 62 (as such
types are defined by the Secretary of
Agriculture); and
(2) receives for--
(A) such employment by such employer which is
in excess of ten hours in any workday, and
(B) such employment by such employer which is
in excess of forty-eight hours in any workweek,
compensation at a rate not less than one and one-half
times the regular rate at which he is employed.
An employer who receives an exemption under this subsection
shall not be eligible for any other exemption under this
section.
(n) In the case of an employee of an employer engaged in the
business of operating a street, suburban or interurban electric
railway or local trolley or motorbus carrier (regardless of
whether or not such railway or carrier is public or private or
operated for profit or not for profit), in determining the
hours of employment of such an employee to which the rate
prescribed by subsection (a) applies there shall be excluded
the hours such employee was employed in charter activities by
such employer if (1) the employee's employment in such
activities was pursuant to an agreement or understanding with
his employer arrived at before engaging in such employment, and
(2) if employment in such activities is not part of such
employee's regular employment.
(o)(1) Employees of a public agency which is a State, a
political subdivision of a State, or an interstate governmental
agency may receive, in accordance with this subsection and in
lieu of overtime compensation, compensatory time off at a rate
not less than one and one-half hours for each hour of
employment for which overtime compensation is required by this
section.
(2) A public agency may provide compensatory time under
paragraph (1) only--
(A) pursuant to--
(i) applicable provisions of a collective
bargaining agreement, memorandum of
understanding, or any other agreement between
the public agency and representatives of such
employees; or
(ii) in the case of employees not covered by
subclause (i), an agreement or understanding
arrived at between the employer and employee
before the performance of the work; and
(B) if the employee has not accrued compensatory time
in excess of the limit applicable to the employee
prescribed by paragraph (3).
In the case of employees described in clause (A)(ii) hired
prior to April 15, 1986, the regular practice in effect on
April 15, 1986, with respect to compensatory time off for such
employees in lieu of the receipt of overtime compensation,
shall constitute an agreement or understanding under such
clause (A)(ii). Except as provided in the previous sentence,
the provision of compensatory time off to such employees for
hours worked after April 14, 1986, shall be in accordance with
this subsection.
(3)(A) If the work of an employee for which compensatory time
may be provided included work in a public safety activity, an
emergency response activity, or a seasonal activity, the
employee engaged in such work may accrue not more than 480
hours of compensatory time for hours worked after April 15,
1986. If such work was any other work, the employee engaged in
such work may accrue not more than 240 hours of compensatory
time for hours worked after April 15, 1986. Any such employee
who, after April 15, 1986, has accrued 480 or 240 hours, as the
case may be, of compensatory time off shall, for additional
overtime hours of work, be paid overtime compensation.
(B) If compensation is paid to an employee for accrued
compensatory time off, such compensation shall be paid at the
regular rate earned by the employee at the time the employee
receives such payment.
(4) An employee who has accrued compensatory time off
authorized to be provided under paragraph (1) shall, upon
termination of employment, be paid for the unused compensatory
time at a rate of compensation not less than--
(A) the average regular rate received by such
employee during the last 3 years of the employee's
employment, or
(B) the final regular rate received by such employee,
whichever is higher
(5) An employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency--
(A) who has accrued compensatory time off authorized
to be provided under paragraph (1), and
(B) who has requested the use of such compensatory
time,
shall be permitted by the employee's employer to use such time
within a reasonable period after making the request if the use
of the compensatory time does not unduly disrupt the operations
of the public agency.
(6) The hours an employee of a public agency performs court
reporting transcript preparation duties shall not be considered
as hours worked for the purposes of subsection (a) if--
(A) such employee is paid at a per-page rate which is
not less than--
(i) the maximum rate established by State law
or local ordinance for the jurisdiction of such
public agency,
(ii) the maximum rate otherwise established
by a judicial or administrative officer and in
effect on July 1, 1995, or
(iii) the rate freely negotiated between the
employee and the party requesting the
transcript, other than the judge who presided
over the proceedings being transcribed, and
(B) the hours spent performing such duties are
outside of the hours such employee performs other work
(including hours for which the agency requires the
employee's attendance) pursuant to the employment
relationship with such public agency.
For purposes of this section, the amount paid such employee in
accordance with subparagraph (A) for the performance of court
reporting transcript preparation duties, shall not be
considered in the calculation of the regular rate at which such
employee is employed.
(7) For purposes of this subsection--
(A) the term ``overtime compensation'' means the
compensation required by subsection (a), and
(B) the terms ``compensatory time'' and
``compensatory time off'' mean hours during which an
employee is not working, which are not counted as hours
worked during the applicable workweek or other work
period for purposes of overtime compensation, and for
which the employee is compensated at the employee's
regular rate.
(p)(1) If an individual who is employed by a State, political
subdivision of a State, or an interstate governmental agency in
fire protection or law enforcement activities (including
activities of security personnel in correctional institutions)
and who, solely at such individual's option, agrees to be
employed on a special detail by a separate or independent
employer in fire protection, law enforcement, or related
activities, the hours such individual was employed by such
separate and independent employer shall be excluded by the
public agency employing such individual in the calculation of
the hours for which the employee is entitled to overtime
compensation under this section if the public agency--
(A) requires that its employees engaged in fire
protection, law enforcement, or security activities be
hired by a separate and independent employer to perform
the special detail,
(B) facilitates the employment of such employees by a
separate and independent employer, or
(C) otherwise affects the condition of employment of
such employees by a separate and independent employer.
(2) If an employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency undertakes, on an occasional or sporadic basis and
solely at the employee's option, part-time employment for the
public agency which is in a different capacity from any
capacity in which the employee is regularly employed with the
public agency, the hours such employee was employed in
performing the different employment shall be excluded by the
public agency in the calculation of the hours for which the
employee is entitled to overtime compensation under this
section.
(3) If an individual who is employed in any capacity by a
public agency which is a State, political subdivision of a
State, or an interstate governmental agency, agrees, with the
approval of the public agency and solely at the option of such
individual, to substitute during scheduled work hours for
another individual who is employed by such agency in the same
capacity, the hours such employee worked as a substitute shall
be excluded by the public agency in the calculation of the
hours for which the employee is entitled to overtime
compensation under this section.
(q) Any employer may employ any employee for a period or
periods of not more than 10 hours in the aggregate in any
workweek in excess of the maximum workweek specified in
subsection (a) without paying the compensation for overtime
employment prescribed in such subsection, if during such period
or periods the employee is receiving remedial education that
is--
(1) provided to employees who lack a high school
diploma or educational attainment at the eighth grade
level;
(2) designed to provide reading and other basic
skills at an eighth grade level or below; and
(3) does not include job specific training.
(r)(1) An employer shall provide--
(A) a reasonable break time for an employee to
express breast milk for her nursing child for 1 year
after the child's birth each time such employee has
need to express the milk; and
(B) a place, other than a bathroom, that is shielded
from view and free from intrusion from coworkers and
the public, which may be used by an employee to express
breast milk.
(2) An employer shall not be required to compensate an
employee receiving reasonable break time under paragraph (1)
for any work time spent for such purpose.
(3) An employer that employs less than 50 employees shall not
be subject to the requirements of this subsection, if such
requirements would impose an undue hardship by causing the
employer significant difficulty or expense when considered in
relation to the size, financial resources, nature, or structure
of the employer's business.
(4) Nothing in this subsection shall preempt a State law that
provides greater protections to employees than the protections
provided for under this subsection.
(s) Compensatory Time Off for Private Employees.--
(1) General rule.--An employee may receive, in
accordance with this subsection and in lieu of monetary
overtime compensation, compensatory time off at a rate
not less than one and one-half hours for each hour of
employment for which overtime compensation is required
by this section.
(2) Conditions.--An employer may provide compensatory
time to employees under paragraph (1) only if such time
is provided in accordance with--
(A) applicable provisions of a collective
bargaining agreement between the employer and
the labor organization that has been certified
or recognized as the representative of the
employees under applicable law; or
(B) in the case of an employee who is not
represented by a labor organization that has
been certified or recognized as the
representative of such employee under
applicable law, an agreement arrived at between
the employer and employee before the
performance of the work and affirmed by a
written or otherwise verifiable record
maintained in accordance with section 11(c)--
(i) in which the employer has offered
and the employee has chosen to receive
compensatory time in lieu of monetary
overtime compensation; and
(ii) entered into knowingly and
voluntarily by such employee and not as
a condition of employment.
No employee may receive or agree to receive
compensatory time off under this subsection unless the
employee has worked at least 1,000 hours for the
employee's employer during a period of continuous
employment with the employer in the 12-month period
before the date of agreement or receipt of compensatory
time off.
(3) Hour limit.--
(A) Maximum hours.--An employee may accrue
not more than 160 hours of compensatory time.
(B) Compensation date.--Not later than
January 31 of each calendar year, the
employee's employer shall provide monetary
compensation for any unused compensatory time
off accrued during the preceding calendar year
that was not used prior to December 31 of the
preceding year at the rate prescribed by
paragraph (6). An employer may designate and
communicate to the employer's employees a 12-
month period other than the calendar year, in
which case such compensation shall be provided
not later than 31 days after the end of such
12-month period.
(C) Excess of 80 hours.--The employer may
provide monetary compensation for an employee's
unused compensatory time in excess of 80 hours
at any time after giving the employee at least
30 days notice. Such compensation shall be
provided at the rate prescribed by paragraph
(6).
(D) Policy.--Except where a collective
bargaining agreement provides otherwise, an
employer that has adopted a policy offering
compensatory time to employees may discontinue
such policy upon giving employees 30 days
notice.
(E) Written request.--An employee may
withdraw an agreement described in paragraph
(2)(B) at any time. An employee may also
request in writing that monetary compensation
be provided, at any time, for all compensatory
time accrued that has not yet been used. Within
30 days of receiving the written request, the
employer shall provide the employee the
monetary compensation due in accordance with
paragraph (6).
(4) Private employer actions.--An employer that
provides compensatory time under paragraph (1) to an
employee shall not directly or indirectly intimidate,
threaten, or coerce or attempt to intimidate, threaten,
or coerce any employee for the purpose of--
(A) interfering with such employee's rights
under this subsection to request or not request
compensatory time off in lieu of payment of
monetary overtime compensation for overtime
hours; or
(B) requiring any employee to use such
compensatory time.
(5) Termination of employment.--An employee who has
accrued compensatory time off authorized to be provided
under paragraph (1) shall, upon the voluntary or
involuntary termination of employment, be paid for the
unused compensatory time in accordance with paragraph
(6).
(6) Rate of compensation.--
(A) General rule.--If compensation is to be
paid to an employee for accrued compensatory
time off, such compensation shall be paid at a
rate of compensation not less than--
(i) the regular rate earned by such
employee when the compensatory time was
accrued; or
(ii) the regular rate earned by such
employee at the time such employee
received payment of such compensation,
whichever is higher.
(B) Consideration of payment.--Any payment
owed to an employee under this subsection for
unused compensatory time shall be considered
unpaid overtime compensation.
(7) Use of time.--An employee--
(A) who has accrued compensatory time off
authorized to be provided under paragraph (1);
and
(B) who has requested the use of such
compensatory time,
shall be permitted by the employee's employer to use
such 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.
(8) Definitions.--For purposes of this subsection--
(A) the term ``employee'' does not include an
employee of a public agency; and
(B) the terms ``overtime compensation'' and
``compensatory time'' shall have the meanings
given such terms by subsection (o)(7).
* * * * * * *
penalties
Sec. 16. (a) Any person who willfully violates any of the
provisions of section 15 shall upon conviction thereof be
subject to a fine of not more than $10,000, or to imprisonment
for not more than six months, or both. No person shall be
imprisoned under this subsection except for an offense
committed after the conviction of such person for a prior
offense under this subsection.
[(b) Any employer] (b) Except as provided in subsection (f),
any employer who violates the provisions of section 6 or
section 7 of this Act shall be liable to the employee or
employees affected in the amount of their unpaid minimum wages,
or the unpaid overtime compensation, as the case may be, and in
an additional equal amount as liquidated damages. Any employer
who violates the provisions of section 15(a)(3) of this Act
shall be liable for such legal or equitable relief as may be
appropriate to effectuate the purposes of section 15(a)(3),
including without limitation employment, reinstatement,
promotion, and the payment of wages lost and an additional
equal amount as liquidated damages. An action to recover the
liability prescribed in either of the preceding sentences may
be maintained against any employer (including a public agency)
in any Federal or State court of competent jurisdiction by any
one or more employees for and in behalf of himself or
themselves and other employees similarly situated. No employees
shall be a party plaintiff to any such action unless he gives
his consent in writing to become such a party and such consent
is filed in the court in which such action is brought. The
court in such action shall, in addition to any judgment awarded
to the plaintiff or plaintiffs, allow a reasonable attorney's
fee to be paid by the defendant, and costs of the action. The
right provided by this subsection to bring an action by or on
behalf of any employee, and the right of any employee to become
a party plaintiff to any such action, shall terminate upon the
filing of a complaint by the Secretary of Labor in an action
under section 17 in which (1) restraint is sought of any
further delay in the payment of unpaid minimum wages, or the
amount of unpaid overtime compensation, as the case may be,
owing to such employee under section 6 or section 7 of this act
by an employer liable therefor under the provisions of this
subsection or (2) legal or equitable relief is sought as a
result of alleged violations of section 15(a)(3).
(c) The Secretary is authorized to supervise the payment of
the unpaid minimum wages or the unpaid overtime compensation
owing to any employee or employees under section 6 or 7 of this
Act, and the agreement of any employee to accept such payment
shall upon payment in full constitute a waiver by such employee
of any right he may have under subsection (b) of this section
to such unpaid minimum wages or unpaid overtime compensation
and an additional equal amount as liquidated damages. The
Secretary may bring an action in any court of competent
jurisdiction to recover the amount of the unpaid minimum wages
or overtime compensation and an equal amount as liquidated
damages. The right provided by subsection (b) to bring an
action by or on behalf of any employee to recover the liability
specified in the first sentence of such subsection and of any
employee to become a party plaintiff to any such action shall
terminate upon the filing of a complaint by the Secretary in an
action under this subsection in which a recovery is sought of
unpaid minimum wages or unpaid overtime compensation under
sections 6 and 7 or liquidated or other damages provided by
this subsection owing to such employee by an employer liable
under the provisions of subsection (b), unless such action is
dismissed without prejudice on motion of the Secretary. Any
sums thus recovered by the Secretary on behalf of an employee
pursuant to this subsection shall be held in a special deposit
account and shall be paid, on order of the Secretary, directly
to the employee or employees affected. Any such sums not paid
to an employee because of inability to do so within a period of
three years shall be covered into the Treasury of the United
States as miscellaneous receipts. In determining when an action
is commenced by the Secretary under this subsection for the
purposes of the statutes of limitations provided in section
6(a) of the Portal-to-Portal Act of 1947, it shall be
considered to be commenced in the case of any individual
claimant on the date when the complaint is filed if he is
specifically named as a party plaintiff in the complaint, or if
his name did not so appear, on the subsequent date on which his
name is added as a party plantiff in such action.
(d) In any action or proceeding commenced prior to, on, or
after the date of enactment of this subsection, no employer
shall be subject to any liability or punishment under this Act
or the Portal-to-Portal Act of 1947 on account of his failure
to comply with any provision or provisions of such Acts (1)
with respect to work heretofore or hereafter performed in a
workplace to which the exemption in section 13(f) is
applicable, (2) with respect to work performed in Guam, the
Canal Zone, or Wake Island before the effective date of this
amendment of subsection (d), or (3) with respect to work
performed in a possession named in section 6(a)(3) at any time
prior to the establishment by the Secretary, as provided
therein, of a minimum wage rate applicable to such work.
(e)(1)(A) Any person who violates the provisions of sections
12 or 13(c), relating to child labor, or any regulation issued
pursuant to such sections, shall be subject to a civil penalty
not to exceed--
(i) $11,000 for each employee who was
the subject of such a violation; or
(ii) $50,000 with regard to each such
violation that causes the death or
serious injury of any employee under
the age of 18 years, which penalty may
be doubled where the violation is a
repeated or willful violation.
(B) For purposes of subparagraph (A), the term ``serious
injury'' means--
(i) permanent loss or substantial impairment of one
of the senses (sight, hearing, taste, smell, tactile
sensation);
(ii) permanent loss or substantial impairment of the
function of a bodily member, organ, or mental faculty,
including the loss of all or part of an arm, leg, foot,
hand or other body part; or
(iii) permanent paralysis or substantial impairment
that causes loss of movement or mobility of an arm,
leg, foot, hand or other body part.
(2) Any person who repeatedly or willfully violates section 6
or 7, relating to wages, shall be subject to a civil penalty
not to exceed $1,100 for each such violation.
(3) In determining the amount of any penalty under this
subsection, the appropriateness of such penalty to the size of
the business of the person charged and the gravity of the
violation shall be considered. The amount of any penalty under
this subsection, when finally determined, may be--
(A) deducted from any sums owing by the United States
to the person charged;
(B) recovered in a civil action brought by the
Secretary in any court of competent jurisdiction, in
which litigation the Secretary shall be represented by
the Solicitor of Labor; or
(C) ordered by the court, in an action brought for a
violation of section 15(a)(4) or a repeated or willful
violation of section 15(a)(2), to be paid to the
Secretary.
(4) Any administrative determination by the Secretary of the
amount of any penalty under this subsection shall be final,
unless within 15 days after receipt of notice thereof by
certified mail the person charged with the violation takes
exception to the determination that the violations for which
the penalty is imposed occurred, in which event final
determination of the penalty shall be made in an administrative
proceeding after opportunity for hearing in accordance with
section 554 of title 5, United States Code, and regulations to
be promulgated by the Secretary.
(5) Except for civil penalties collected for violations of
section 12, sums collected as penalties pursuant to this
section shall be applied toward reimbursement of the costs of
determining the violations and assessing and collecting such
penalties, in accordance with the provision of section 2 of the
Act entitled ``An Act to authorize the Department of Labor to
make special statistical studies upon payment of the cost
thereof and for other purposes'' (29 U.S.C. 9a). Civil
penalties collected for violations of section 12 shall be
deposited in the general fund of the Treasury.
(f) An employer that violates section 7(s)(4) shall be liable
to the employee affected in the amount of the rate of
compensation (determined in accordance with section 7(s)(6)(A))
for each hour of compensatory time accrued by the employee and
in an additional equal amount as liquidated damages reduced by
the amount of such rate of compensation for each hour of
compensatory time used by such employee.
* * * * * * *
MINORITY VIEWS
Committee Democrats oppose H.R. 1180. This legislation
would amend the Fair Labor Standards Act (FLSA) to allow
private sector employers to enter into voluntary arrangements
with their employees to ``compensate'' them with compensatory
time off (``comp time'') in lieu of overtime pay. Instead of
paying workers overtime (time-and-a-half for every hour that
they work beyond forty in a week), this legislation permits
employers to pay employees in comp time (one and one-half hours
of paid time off for every hour that they work over forty at
the employee's regular rate). The legislation provides no
guarantee, however, that workers can take the time off when
they actually need it.
H.R. 1180 undermines the vital protections in the Fair
Labor Standards Act (FLSA) by making it cheaper for employers
to require their employees to work excessive hours and legal
for employers to deny workers their overtime pay. It also
undermines enforcement of our wage and hour laws. Yet H.R. 1180
is being advanced by House Republicans as a ``pro-family, pro-
worker proposal.''\1\ Unfortunately, rather than presenting
this Committee with legislation that would actually benefit
working families, the Majority has championed legislation that
provides a way for employers to give their employees a pay cut.
H.R. 1180 has been rejected in many previous Congresses, and it
has never advanced beyond the House.
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\1\Fact Sheet: Working Families Flexibility Act of 2017, United
States House of Representatives, Committee on Education and the
Workforce--Republicans (Apr. 24, 2017), available at http://
edworkforce.house.gov/news/documentsingle.aspx?DocumentID=401576.
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Instead of considering H.R. 1180, Congress should pass
legislation that both protects workers' overtime pay and
promotes needed flexibility in the workplace. Democrats have
proposed legislation that would raise the minimum wage, ensure
equal pay for equal work, guarantee paid sick days and paid
family and medical leave, and provide flexible and predictable
schedules. These are the solutions that would make a real
difference in the lives of working Americans, rather than a
proposal that undermines bedrock worker protections and costs
workers much-needed overtime compensation.
THE FAIR LABOR STANDARDS ACT
In the 1930s, Congress recognized the need for legislation
to address the widespread ``labor conditions detrimental to the
maintenance of the minimum standard of living necessary for
health, efficiency, and general well-being of workers.''\2\
This concern ultimately led to the passage of the FLSA in 1938,
which still stands as one of the crowning achievements of the
New Deal. This crucial law establishes a federal minimum wage,
restricts the use of child labor, and sets standards for when
employers must pay workers overtime.\3\
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\2\29 U.S.C. Sec. 202(a).
\3\29 U.S.C. Sec. Sec. 201-217.
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Seventy-nine years after its enactment, the FLSA remains
the nation's basic law governing wages and hours of work. There
are three main protections afforded to workers under this
critical law: (1) a basic minimum wage, (2) a limit on the
number of hours an employer may require from an employee before
being subject to an overtime premium, and (3) a prohibition on
most forms of child labor.\4\
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\4\29 U.S.C. Sec. Sec. 201-219.
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The maximum hours and overtime provisions are set out in
Section 7 of the FLSA. Currently, the law requires employers to
compensate all covered employees for any time that they work in
excess of forty hours in a week at a rate of no less than one-
and-a-half times their regular wage rate.\5\ Although the limit
on hours compensable at the regular wage rate is firmly set at
forty, there is nonetheless substantial flexibility in how
these hours are allotted over the course of a week.
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\5\29 U.S.C. Sec. 207(a).
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There are two primary purposes behind setting a maximum
hour limit and subjecting further hours to an overtime premium:
discouraging overwork and spreading employment. Congress sought
to lessen the burden on workers that comes from working an
``intolerable'' number of hours in a given week.\6\ By charging
a premium for extra work hours, employers are discouraged from
overworking their employees. The other purpose behind the
overtime wage premium is economic in nature--spreading
employment, thereby spurring hiring and reducing the
unemployment rate.
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\6\President Franklin D. Roosevelt, Annual Message to Congress
(Jan. 3, 1938), available at http://www.presidency.ucsb.edu/ws/
index.php?pid= 15517.
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As originally enacted, the FLSA contained no provisions
allowing employers to offer comp time in lieu of overtime
wages. However, Congress changed this when it passed the Fair
Labor Standards Amendments of 1985, which introduced a limited
system of comp time for public-sector employees.\7\ Section
7(o) of the FLSA now provides that state and federal public
sector workers are eligible for comp time in lieu of overtime
wages, with the comp time to accumulate at a rate of one and
half times the number of hours worked.\8\ As applied to federal
employees, the regulations require that accrued comp time be
used by the end of the 26th pay period (one year) after the pay
period during which the overtime hours were worked.\9\
Congress's intention in adding this provision was to provide
cost savings in government budgets, as the overtime wage
premium was more expensive than providing workers with
compensatory time off.\10\
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\7\Pub. L. No. 99-150.
\8\29 U.S.C. Sec. 207.
\9\Fact Sheet: Compensatory Time Off, Office of Personnel
Management, available at http://www.opm.gov/policy-data-oversight/pay-
leave/pay-administration/fact-sheets/compensatory-time-off; see also 5
C.F.R. Sec. 550.114.
\10\Ross Eisenbrey, The Naked Truth About Comp Time, Economic
Policy Institute, at 5-6 (Mar. 31, 2003), available at http://
www.epi.org/page/-/old/issuebriefs/ib190/ib190.pdf.
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PAST EFFORTS TO REPLACE OVERTIME WITH COMP TIME
The ideas presented by the Majority in H.R. 1180 are not
new. Committee Republicans have sponsored numerous virtually
identical bills, each of which would have weakened overtime
protections through the use of comp time. None of these bills
have come close to being enacted into law.
In 1995, Republicans introduced H.R. 2391,
the Working Families Flexibility Act of 1996. This bill
was reported out of Committee and passed the House on a
nearly party-line vote. It was not considered by the
Senate.
In 1997, Republicans introduced H.R. 1, the
Working Families Flexibility Act of 1997, which sought
to amend the FLSA to extend comp time to the private
sector. This bill passed the House and was not
considered by the Senate.\11\
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\11\H.R. 1, available at https://www.gpo.gov/fdsys/pkg/BILLS-
105hr1eh/pdf/BILLS-105hr1eh.pdf.
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In 1999, Republicans introduced, H.R. 1380,
the Working Families Flexibility Act and no further
action was taken.
In 2001, Republicans introduced H.R. 1982,
the Working Families Flexibility Act, and the
Subcommittee on Workforce Protections held two hearings
on the issue.
In 2003, Republicans introduced H.R. 1119,
the so-called Family Time Flexibility Act, which again
proposed extending comp time to the private sector.
This bill was reported out of Committee and no further
action was taken.\12\
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\12\H.R. 1119, available at http://www.gpo.gov/fdsys/pkg/BILLS-
108hr1119rh/pdf/BILLS-108hr1119rh.pdf.
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In 2008, Republicans introduced H.R. 6025,
the Family Friendly Workplace Act, a nearly identical
comp time bill. No further action was taken.\13\
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\13\H.R. 6025, available at http://www.gpo.gov/fdsys/pkg/BILLS-
110hr6025ih/pdf/BILLS-110hr6025ih.pdf.
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In 2009, Republicans introduced H.R. 933,
which was a reintroduction of the 2008 Family Friendly
Workplace Act. No further action was taken.\14\
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\14\H.R. 933, available at http://www.gpo.gov/fdsys/pkg/BILLS-
111hr933ih/pdf/BILLS-111hr933ih.pdf.
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In 2013, Republicans introduced H.R. 1406,
the Working Families Flexibility Act of 2013, the first
version of the bill introduced by Rep. Martha Roby.\15\
This bill passed the House on a nearly party-line vote,
and it was not considered by the Senate.
---------------------------------------------------------------------------
\15\H.R. 1406, available at https://www.congress.gov/ bill/ 113th-
congress/ house-bill/ 1406/ related-bills.
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In 2015, Republicans introduced H.R. 465,
the Working Families Flexibility Act of 2015. No
further action was taken.\16\
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\16\H.R. 465, available at https://www.congress.gov/ bill/ 114th-
congress/ house-bill/ 465?q= %7B %22search %22 %3A %5B
%22Working+Families +Flexibility+ Act+of+ 2015 %22 %5D%7D&r=1.
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In 2017, Republicans introduced H.R. 1180,
the Working Families Flexibility Act of 2017. This bill
was reported out of Committee on a party-line vote,
with all Democrats opposing the legislation.\17\
---------------------------------------------------------------------------
\17\H.R. 1180, available at https://www.congress.gov/bill/115th-
congress/house-bill/ 1180?q= %7B %22search %22 %3A %5B
%22Working+Families+ Flexibility+ Act+of+2017 %22 %5D %7D&r=3.
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Each comp time bill has met firm opposition from worker
advocates and women's organizations that recognized the harm
these proposals would inflict upon working families. The
following organizations sent letters to the Committee in
opposition to H.R. 1180: 9-5, the American Federation of State,
County and Municipal Employees (AFSCME), the Center for Law and
Social Policy (CLASP), the Economic Policy Institute (EPI),
Family Values @ Work, the Leadership Conference on Civil and
Human Rights (LCCR), the National Employment Law Project
(NELP), the National Women's Law Center (NWLC), the Service
Employees International Union (SEIU), the International
Brotherhood of Teamsters, the United Food and Commercial
Workers (UFCW), and the United Steelworkers (USW). The National
Partnership for Women & Families led a letter with signatures
from 85 organizations.
THE REAL IMPACT OF H.R. 1180 ON WORKING FAMILIES
H.R. 1180 forces working people to choose between their
hard-earned pay and time with their families, when they need
both. Democrats have real solutions to the challenges facing
working families that would not force them to make this
impossible choice. Hardworking Americans should have access to
basic benefits such as paid sick days, family leave and fair
schedules. But H.R. 1180 does nothing to increase workers'
access to these important benefits. Meanwhile, it creates
significant uncertainty for workers.
H.R. 1180 undermines workers' ability to earn overtime pay
H.R. 1180 makes it less likely that workers who need
overtime pay will be able to get it. Some workers count on
overtime pay to meet their expenses--including putting children
through college, buying a home or saving for retirement. Among
workers paid less than $22,500 a year, for example, roughly 40
percent report working some overtime in the previous month
voluntarily.\18\ Nothing in the legislation prohibits employers
from preferentially assigning overtime hours to employees who
agree to accept comp time. Since providing comp time is cheaper
than providing overtime pay, employers are extremely likely to
allocate overtime hours first to those employees who agree to
accept comp time.
---------------------------------------------------------------------------
\18\Lonnie Golden, Flexibility and Overtime Among Hourly and
Salaried Workers (Sept. 30, 2014), available at http://www.epi.org/
publication/flexibility-overtime-hourly-salaried-workers/.
---------------------------------------------------------------------------
While the legislation states that employees are free to
choose whether to accept comp time, in practice, the power
differential between employers and employees, particularly in
non-union workplaces, would make it far more likely that some
employees would feel obligated to accept comp time even when
they would much rather get paid for their overtime in their
next scheduled paycheck. While the legislation provides anti-
retaliation protections for employees who do not accept comp
time, proving retaliation is extremely difficult and enforcing
these provisions takes time and money that most overtime-
eligible employees do not have.
H.R. 1180 will lead to longer work hours and less flexibility for
overworked Americans
For many working families, time is a precious commodity. In
families where both parents work, being forced to spend more
time at work in order to earn time with one's family imposes a
significant hardship. But under H.R. 1180, an employee who
needs to take a day off because she has caregiving
responsibilities, school obligations, a health condition, or
for any other reason, must first log overtime hours.\19\
---------------------------------------------------------------------------
\19\At the same time, for some workers, working overtime is not
even a possibility. A significant share of the workforce does not have
access to overtime work. Four percent of the workforce--amounting to
six million workers--worked part-time involuntarily in 2015. Lonnie
Golden, Still Falling Short on Hours and Pay: Part-time Work Becoming
New Normal (Dec. 5, 2016), available at http://www.epi.org/publication/
still-falling-short-on-hours-and-pay-part-time-work-becoming-new-
normal/.
---------------------------------------------------------------------------
More than 20 percent of the workforce currently reports
working overtime on a mandatory basis.\20\ When workers are
required to stay late at work, this can mean not being able to
pick up a child from a child care center or administer a
parent's dose of evening medications. Because this legislation
makes it cheaper for employers to require employees to work
overtime, it is likely to leave many workers with less control
over their schedules and more mandatory overtime hours at
work.\21\
---------------------------------------------------------------------------
\20\Lonnie Golden, Flexibility and Overtime Among Hourly and
Salaried Workers (Sept. 30, 2014), available at http://www.epi.org/
publication/flexibility-overtime-hourly-salaried-workers/.
\21\Lonnie Golden, Flexibility and Overtime Among Hourly and
Salaried Workers (Sept. 30, 2014), available at http://www.epi.org/
publication/flexibility-overtime-hourly-salaried-workers/.
---------------------------------------------------------------------------
As discussed in further detail below, H.R. 1180 provides no
guarantee that an employee can take comp time when she needs
it--such as when she is sick, on a snow day when schools are
closed, or to take a child to a doctor's appointment. To the
contrary, H.R. 1180 provides significant discretion to
employers to determine when comp time may be used. This
uncertainty about whether and when an employee may take comp
time would significantly constrain employees' ability to plan
their lives outside of work.
Contrary to the Majority's assertions, nothing in the FLSA
prevents employers from providing flexibility to workers. Under
current law, employers may provide workers with paid or unpaid
leave, as well as flexible and predictable schedules. Yet, four
in ten workers do not have a single paid sick day. And among
early career-workers, more than 40 percent report getting their
schedules less than one week in advance. The only constraint on
employers' ability to offer paid time off or fair work
schedules is their willingness to do so.
H.R. 1180 undermines enforcement of existing wage and hour laws
Workers are cheated out of their overtime pay all too
frequently. In a survey of low-wage workers, 76 percent of
those who reported working overtime said that they were not
paid time-and-a-half for their work.\22\ This legislation would
greatly increase the complexity of enforcing overtime
protections. It will be more difficult to determine if an
overtime violation has occurred where an employer asserts that
comp time was granted in lieu of overtime pay. Yet, the bill
provides no new resources to ensure compliance even though
DOL's resources to remedy wage theft are already woefully
inadequate. Furthermore, while the legislation provides a
private right of action, most employees who are denied overtime
pay do not have the financial resources to hire a lawyer to
bring suit.
---------------------------------------------------------------------------
\22\Annette Bernhardt, et al., Broken Laws, Unprotected Workers,
Fair Warning (Apr. 2014), available at https://www.fairwarning.org/wp-
content/uploads/2014/04/Link3Shorter.pdf.
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H.R. 1180 puts workers' paychecks at risk unnecessarily
H.R. 1180 creates additional, unnecessary risk for
employees, because if an employer goes bankrupt before it has
paid its employees the comp time they are owed, the employee
may never recover her unpaid wages. Workers also risk losing up
to 160 hours of overtime pay (the limit on overtime hours a
worker can bank as comp time under this legislation) because
their overtime is not put into escrow or a trust fund and could
be lost if the employer goes out of business or declares
bankruptcy. In 2013 alone, 400,000 small businesses closed.\23\
If an employer chooses, the employer may also cash out comp
time earned in excess of 80 hours, scuttling an employee's
planned surgery or parental leave. Finally, an employer can
also make the unilateral decision to discontinue a comp time
program, derailing an employee's planned time off.
---------------------------------------------------------------------------
\23\U.S. Small Business Administration, ``Frequently Asked
Questions,'' (Jun. 2016), available at https://www.sba.gov/sites/
default/files/advocacy/SB-FAQ-2016_WEB.pdf.
---------------------------------------------------------------------------
H.R. 1180 provides an unsecured interest-free loan for employers
Agreeing to be paid in comp time is tantamount to providing
an employer with a zero-interest loan. While banking comp time
with her employer, the employee is loaning her employer her
wages, repayable only when the employer decides it's
convenient, not when the employee actually needs the money or
the time off from work. Meanwhile, the employer is free to
invest the employee's withheld wages to the employer's
advantage.
In contrast, if workers were paid for their overtime hours
in their next scheduled paycheck, they could put that money in
an interest-earning bank account where it would grow. Workers
would be better off getting paid for their overtime hours,
setting that money safely aside in an interest-earning account,
and self-funding leave at some point in the future, rather than
using comp time.
THE MAJORITY'S FLAWED PUBLIC-SECTOR ARGUMENT
Proponents of H.R. 1180 argue that the legislation simply
provides flexibility already available in the public sector to
private sector workers. However, this argument ignores profound
differences between public and private sector employers.
Moreover, state and municipal employees only became eligible
for comp time as a cost-saving policy that afforded employers
the value of their employees' labor without being required to
pay for it.
H.R. 1180 extends all the benefits of employer-controlled
comp time arrangements to private sector employers, yet makes
no effort to achieve parity for private sector workers in terms
of job protection or other benefits. At the same time, public
sector workers generally enjoy many more employment protections
than their private sector counterparts, and they are far more
likely to have benefits like paid sick leave and vacation. In
contrast to the job security that is often afforded to public
sector workers, private sector workers are employed at-will and
can be terminated for any reason other than race, gender or
retaliation for exercising rights protected by employment laws
such as the National Labor Relations Act.
Union density in the public sector is also five to six
times greater than in the private sector.\24\ This means that
while public sector workers are likely to have some bargaining
power, workers in the private sector are far more likely to
feel coerced to accept comp time in lieu of overtime pay, and
that the failure to do so would put their jobs at risk.
Furthermore, workers represented by a union can get help if
they feel that their employers are not implementing comp time
fairly. Private sector workers without union representation
will have no recourse other than going to court, a costly and
time-consuming process with a very uncertain outcome.
---------------------------------------------------------------------------
\24\Economic News Release: Union Members Summary, Bureau of Labor
Statistics (Jan. 26, 2017), available at https://www.bls.gov/
news.release/union2.nr0.htm.
---------------------------------------------------------------------------
Finally, the litigation over the use of comp time in the
public sector provides significant cause for concern about the
potential for employer abuse of comp time in the private
sector. The language in the FLSA permitting employers to
provide comp time to public sector employees provides that the
employer must permit the employee ``to use such time within a
reasonable period after making the request if the use of the
compensatory time does not unduly disrupt the operations'' of
the public agency. This language is mirrored in H.R. 1180.
Litigation over the interpretation of this provision has
yielded unfavorable results for employees. For example, the
United States Court of Appeals for the Ninth Circuit
interpreted the law to give an employer absolute power to deny
compensatory time requests on particular dates and to delay the
use of compensatory time for up to one full year.\25\ Courts'
deference to the employer's definition of ``reasonable period''
and when time off would ``unduly disrupt'' business operations
suggests that under H.R. 1180 employers may prohibit employees
from taking comp time when they need it--such as when they are
sick, or a parent in need of help has a scheduled surgery.
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\25\See Mortensen v. County of Sacramento, 368 F.3d 1082 (9th Cir.
2004) (citing Houston Police Officers' Union v. City of Houston, 330
F.3d 298 (5th Cir.2003) (cert. denied, 540 U.S. 879 (2003)).
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APRIL 5, 2017 LEGISLATIVE HEARING ON H.R. 1180 IN THE SUBCOMMITTEE ON
WORKFORCE PROTECTIONS
Employer representatives testified that they provided a
wide range of workplace flexibility options to their employees,
which are all permissible under the FLSA. Despite the extensive
workplace flexibility options that are already consistent with
the FLSA, they contended that the FLSA was outdated, and that
it should be amended to permit comp time.
The Democratic witness, Ms. Vicki Shabo, explained that
H.R. 1180 does nothing to increase or guarantee flexibility for
working people and it diminishes their ability to earn much-
needed overtime pay. As Ms. Shabo noted, while there are many
businesses that voluntarily provide workplace flexibility
options for their employees, there are still far too many
workers who lack access to basic benefits like paid sick days,
paid family leave, and flexible and predictable schedules. Ms.
Shabo provided examples of how a typical worker would not
benefit from comp time. She also explained that despite
substantial gains in productivity over the past four decades,
the typical worker's wages have barely grown. To guarantee
workplace flexibility and fair pay for all working people, Ms.
Shabo urged the committee to consider legislation such as the
Healthy Families Act, the FAMILY Act, the Paycheck Fairness
Act, the Schedules that Work Act, and legislation to raise the
minimum wage.
APRIL 26, 2017 FULL COMMITTEE MARKUP ON H.R. 1180
Full committee markup of H.R. 1180
On April 26, 2017 the full committee marked up H.R. 1180,
the Working Families Flexibility Act of 2017. Committee
Democrats offered amendments that would provide real solutions
to the challenges facing working families.
Rep. Blunt Rochester offered an amendment limiting the
workers who are eligible for comp time under H.R. 1180 to those
who have at least 7 days of paid sick leave. Permitting workers
to take guaranteed paid time off when they are sick or to care
for a sick family member is a critical solution to meet the
needs of struggling families. Committee Democrats support the
Healthy Families Act which, unlike H.R. 1180, would allow
workers to earn and accrue sick days without compromising their
overtime pay. However, this amendment was rejected by the
Majority on a party-line vote. Two substitute amendments were
also offered. Rep. DeSaulnier offered the Schedules that Work
Act, which provides workers with flexible and predictable
schedules, and Rep. Takano offered an amendment that would
expand access to overtime pay for over 13 million working
people. Unfortunately, Committee Republicans voted unanimously
to block consideration of these amendments.
Democrats also offered amendments designed to strengthen
the protections for workers in H.R. 1180. These included an
amendment offered by Rep. Adams to exempt compensatory time
arrangements from mandatory arbitration clauses, an amendment
offered by Rep. Wilson to exempt low-wage workers from comp
time agreements, an amendment offered by Rep. Espaillat to
exempt unscrupulous employers who have violated the FLSA
willfully and repeatedly from comp time agreements, an
amendment offered by Rep. Bonamici requiring that employers
keep employees' comp time pay in an interest-bearing account,
and an amendment offered by Rep. Shea-Porter to deter employers
from coercing employees to accept comp time in lieu of overtime
pay and prevent employers from cashing out employees' comp time
in excess of 80 hours. Republicans rejected all of Democrats'
efforts to strengthen the protections for working people in
H.R. 1180.
At the markup, Republican members contended that former
President William Jefferson Clinton was supportive of comp time
legislation. In fact, as Democrats noted, President William
Jefferson Clinton issued a Statement of Administration Policy
on March 15, 1997 opposing the legislation, which stated, in
part:
``H.R. 1 purports to give working families greater
flexibility. In reality, it grants employers more rights at the
expense of working people:
H.R. 1 fails to offer workers real choice.
In particular, H.R. 1 would allow an employer to decide
when a worker could use his or her compensatory time-
off by disapproving such time-off if the employer
claims it would ``unduly disrupt'' its operations. In
addition, H.R. 1 would permit an employer to ``cash
out'' a worker's earned compensatory time over 80
hours.
H.R. 1 fails to protect workers against
employer abuse. For example, H.R. 1 offers inadequate
protections for vulnerable workers and part-time,
seasonal, and temporary employees, including garment
and construction workers and those who are employed in
industries with histories of Fair Labor Standards Act
violations. H.R. 1 also fails to prohibit employers
from substituting compensatory time-off for paid
vacation or sick leave benefits. Furthermore, H.R. 1
lacks meaningful remedies for workers when employers
penalize them for electing to receive overtime pay in
lieu of compensatory time-off. In addition, H.R. 1
contains inadequate worker safeguards in cases where an
employer goes bankrupt or out-of-business.
H.R. 1 fails to preserve workers' rights.
Workers who take compensatory time-off can be forced to
work additional overtime in the same week--even on the
weekend--without being paid overtime premium pay.''\26\
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\26\Statement of Administration Policy on H.R. 1, Working Families
Flexibility Act (March 15, 1997), available at http://
www.presidency.ucsb.edu/ws/index.php?pid=74919.
---------------------------------------------------------------------------
These arguments apply with equal force to H.R. 1180, which
is substantially similar to H.R. 1, the comp time bill proposed
in 1997.
POLICY SOLUTIONS THAT WORKING FAMILIES NEED
Workers depend on the wage and overtime protections in the
FLSA, and they should not have to sacrifice their paychecks to
take time off from work. Committee Democrats support an agenda
for working families that would raise pay for hardworking
Americans and help them juggle work and family life.
Working families need a raise
Workers in 21 states still earn the federal minimum wage of
$7.25 an hour which leaves a person who works full-time year-
round and has only one child living below the poverty
threshold.\27\ In the coming weeks, Democrats will introduce
legislation to raise the minimum wage to $15 by 2024. It's been
nearly ten years since the last legislated increase to the
minimum wage. Raising the minimum wage to $15 by 2024 would
directly lift wages for 22.5 million workers.
---------------------------------------------------------------------------
\27\Center for Poverty Research, University of California, Davis,
``What are the annual earnings for a full-time minimum wage worker?''
(Updated Aug. 30, 2016), available at http://poverty.ucdavis.edu/faq/
what-are-annual-earnings-full-time-minimum-wage-worker.
---------------------------------------------------------------------------
Working families need strengthened overtime protections
One of the reasons workers' wages have been stagnant for
far too long is the failure to update the overtime threshold
below which salaried workers are automatically eligible for
overtime pay. In 1975, the overtime threshold covered 62
percent of salaried workers, but today only 8 percent of
workers are covered. The Department of Labor's overtime rule
would have increased the salary threshold under which most
workers are automatically eligible from for overtime pay from
$23,660 to $47,476. This would make 4.2 million more workers
eligible for overtime pay and strengthen overtime protections
for 8.9 million more. This rule would ensure that low-paid
assistant managers could no longer be forced to work 50, 60, or
70 hours per week--the extra 10, 20, or 30 hours for free. Yet,
Republicans introduced legislation in the last Congress to roll
back this rule, and held a Committee hearing that was critical
of the rule. The rule was blocked by a federal court before it
took effect, and President Trump's Department of Labor sought
repeated extensions of time to file its reply brief in the
litigation, further delaying the rule.
Working families need paid sick leave
The Healthy Families Act (H.R. 1286) would allow workers to
earn paid sick leave to use when they are sick, to care for a
sick family member, to obtain preventive care, or for reasons
related to domestic violence. This is critical for the four in
ten private sector workers who do not have access to a single
paid sick day.\28\ Workers would earn one hour of paid sick
time for every 30 hours worked. State and local laws that
provide employees with paid sick days are also vitally
important to working families. But no matter where they live,
every worker should have the right to take a paid sick day for
his own illness or to care for a family member. That is why
Committee Democrats strongly support the Healthy Families Act.
---------------------------------------------------------------------------
\28\Fact Sheet: The Healthy Families Act, National Partnership for
Women and Families (Apr. 2013), available at http://
go.nationalpartnership.org/site/DocServer/
HFA_Expanded_Overview.pdf?docID=10741.
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Working families need paid family and medical leave
Only 14 percent of the workforce has paid family leave
through their employers, and less than 40 percent have personal
medical leave through an employer-provided short-term
disability program. H.R. 1439, the Family and Medical Insurance
Leave Act (the FAMILY Act) would provide employees with up to
12 weeks of partial income replacement when they take time off
for their own serious health conditions, including pregnancy
and childbirth recovery; the serious health condition of a
child, parent, spouse or domestic partner; the birth or
adoption of a child; and/or for particular military caregiving
and leave purposes. The FAMILY Act permits workers to earn up
to 66 percent of their wages, and it is paid for through a
joint payroll tax on employers and employees with payroll
contributions in the amount of two-tenths of one percent (or
two cents per $10 in wages).\29\
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\29\Fact Sheet: The Family and Medical Insurance Leave Act,
National Partnership for Women and Families (Feb. 2017), available at
http://www.nationalpartnership.org/research-library/work-family/paid-
leave/family-act-fact-sheet.pdf.
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Working families need flexible and predictable schedules
Inflexible and unpredictable schedules can make it
extremely difficult for workers to both do their jobs and care
for their families. Lack of control over schedules is a
particular problem for low-wage workers. About half of low-wage
workers report having little say in their schedules.\30\ And
more than 40 percent of early career workers say they get their
schedules only a week or less in advance.\31\ The Schedules
that Work Act gives employees a say in when they work by
creating a right to request a particular schedule, and
protecting workers from retaliation for making scheduling
requests.\32\ For workers in restaurant, retail, and building
cleaning jobs--where schedules are most unpredictable--the
legislation provides additional protections. The Schedules That
Work Act would require employers to provide these employees
with at least four hours of pay if they report to work but are
sent home early without working their scheduled shift. The
legislation also requires an additional hour of pay for
employees assigned to work a split shift (a shift with an
unpaid break of more than one hour). Finally, the legislation
requires employers to provide two weeks' advance notice of work
schedules to employees, and disclose the number of hours an
employee can expect to be assigned to work when she is hired.
If an employer makes changes to this work schedule with notice
of only 24 hours or less in advance of the employee's shift,
the bill requires the employer to provide one extra hour of
pay.
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\30\``Collateral Damage: Scheduling Challenges for Workers in Low-
Wage Jobs and Their Consequences,'' National Women's Law Center (Apr.
2017), available at https://nwlc.org/wp-content/uploads/2015/06/
Collateral-Damage.pdf.
\31\Id.
\32\Id.
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Working families need equal pay
The Paycheck Fairness Act, H.R. 1869, would strengthen the
tools available to both identify and remedy pay discrimination
which is still an all too persistent problem. Today, women
working full-time year round are typically paid 80 cents for
every dollar paid to their male counterparts.\33\ Black women
are typically paid 63 cents and Latinas are paid just 54 cents
for every dollar paid to white, non-Hispanic men.\34\ The
Paycheck Fairness Act builds on the landmark Equal Pay Act
signed into law in 1963 by closing loopholes that have kept it
from achieving its goal of equal pay. The bill would require
employers to show pay disparity is truly related to job-
performance--not gender. It also prohibits employer retaliation
for sharing salary information with coworkers. Under current
law employers can sue and punish employees for sharing such
information. The legislation also prohibits employers from
asking job applicants questions about their salary history for
the purpose of making a salary offer, which is important to
prevent pay discrimination from accompanying women from job to
job. In addition, it strengthens remedies for pay
discrimination by increasing the compensation women can seek,
allowing them to not only seek back pay, but also punitive
damages for pay discrimination.
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\33\Resource: Women and the Lifetime Wage Gap: How Many Woman Years
Does it Take to Equal 40 Man Years?, National Women's Law Center (Mar.
28, 2017), available at https://nwlc.org/resources/women-and-the-
lifetime-wage-gap-how-many-woman-years-does-it-take-to-equal-40-man-
years/.
\34\Fact Sheet: America's Women and the Wage Gap, National
Partnership of Women and Families (Apr. 2017), available at http://
www.nationalpartnership.org/research-library/workplace-fairness/fair-
pay/americas-women-and-the-wage-gap.pdf.
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CONCLUSION
H.R. 1180 does not create any meaningful new rights for
employees. Employees can already take time off without pay, if
they get permission from their employer. The bill does,
however, create a new right for employers to withhold
employees' overtime pay. Democrats have offered real solutions
to the challenges facing working families that would not force
them to make an impossible choice between money and time--when
they need both. This Committee should bring up for
consideration the legislation being offered by Democrats that
would both raise workers' pay and help them better juggle work
and family life.
Robert C. ``Bobby'' Scott,
Ranking Member.
Susan A. Davis.
Raul M. Grijalva.
Joe Courtney.
Marcia L. Fudge.
Jared Polis.
Gregorio Kilili Camacho Sablan.
Frederica S. Wilson.
Suzanne Bonamici.
Mark Takano.
Alma S. Adams.
Mark DeSaulnier.
Donald Norcross.
Lisa Blunt Rochester.
Raja Krishnamoorthi.
Carol Shea-Porter.
Adriano Espaillat.
[all]