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Will Congress Get Rid of Mandatory Overtime Pay?

Currently, millions of employees in the United States are required to be paid overtime (time and a half) if they work more than 40 hours in a given week.

But a new bill in Congress proposes changing that. The Working Families Flexibility Act of 2017 proposes allowing employees to receive compensatory time (extra paid time off) instead of overtime payments.

[See: The 6 Best Jobs for Work-Life Balance.]

The rigidity of the requirements for overtime pay has long been a frustration to some (although certainly not all) employees and employers who would like to be able to let workers flex their schedules when they put in extra hours. For example, if you work 45 hours this week, you might prefer to be able to take five hours off next week -- but under our current labor laws, your employer can't compensate you for the extra time that way. The current law requires that you be paid -- in wages, not in comp time. Money is nothing to scoff at, of course, but some workers end up frustrated that they can't get the schedule flexibility that they might sometimes prefer.

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The proposed legislation would change that. If the bill becomes law, it would give employers and employees the option of using comp time in lieu of overtime. The idea is to update the law to better reflect the way today's workplaces operate, since the current law was set up during the 1930s to combat the sweatshops of the Great Depression.

Here's what the law proposes:

-- Employees would need to agree to receive comp time instead of overtime pay before any overtime work is performed, and that agreement must be in writing. The agreement must be entered into voluntarily; it cannot be a condition of employment, and the bill would make it illegal for an employer to "directly or indirectly intimidate, threaten or coerce or attempt to intimidate, threaten or coerce" the employee in an attempt to influence the person to accept or decline a comp time arrangement. This is important to ensure that employees aren't pressured into foregoing overtime pay when they would prefer to receive it.

-- Comp time would be provided at the same rate that overtime is paid -- meaning that workers receiving comp time would get one and a half hours of comp time for every hour of overtime they work. Currently, if you work one hour of overtime, you get paid that hour at 1.5 times your normal hourly wage. Under this proposal, you could opt for an hour and a half of comp time instead.

-- If an employee asks to use her accrued comp time, the employer would be required to grant the request "within a reasonable period" as long as it wouldn't "unduly disrupt the operations of the employer."

-- Employees couldn't accrue more than 160 hours of comp time per year, and any comp time not used by the end of the year would be paid out at the employee's regular rate, no later than 31 days after the end of the year. Employers would be required to pay out all accrued comp time to any employee exiting the organization.

-- If an employee provided a written request to be paid for all accrued comp time, an employer would be required to provide the payout within 30 days.

-- Employees would have the right to stop participating in the comp time arrangement at any time.

-- Employees wouldn't be allowed to agree to comp time until they had worked for the employer for at least 1,000 hours in the past 12 months.

The legislation, if passed, would provide significant new flexibility to employees covered under the overtime law. For example, employees could bank their overtime and save it for times of greater need (such as sickness, parental leave or even just a summer vacation). And generally, many employees would like to choose for themselves whether to receive overtime pay or additional paid time off when they work extra hours.

[See: Tips for Surviving a Career Transition.]

On the other hand, labor advocates worry that employers would pressure employees to accept comp time when they really might prefer overtime pay. While the bill would require the comp time agreement to be entered into voluntarily, in reality the power disparity between employer and employee might mean that employees feel pressured regardless.

But with employees increasingly wanting more flexibility at work, this type of change in the law could be a practical way of ensuring that flexibility isn't reserved just for senior management (who are exempt from overtime pay requirements anyway).



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