Right now, if a non-exempt employee works more than 40 hours in a week (or more than eight hours in one day, in California) you have to pay them time-and-a-half for the extra hours. So if an employee earns $10 an hour and works 45 hours in one week, she receives $400 ($10 x 40) in straight time and $75 ($15 x 5) in overtime pay.
But what if she would prefer to take comp time instead? That is, if she worked 45 hours this week, she’d prefer to work 35 hours next week and take home $800. Right now, in the private sector, this is illegal however the Working Families Flexibility Act of 2017, has now been introduced to Congress which allows for comp time in the private sector, but with a couple of twists.
- Employer and employee have to agree.
The manager doesn’t get to unilaterally decide to stop paying overtime and offer comp time instead. Both have to agree, or else it defaults to overtime pay.
- Comp time, like overtime pay, is at 1.5 times.
So if your employee works 45 hours this week, she’s entitled to 7.5 hours of comp time. So, what does this mean? If both the employer and the employee agree (more on this in a minute), or if it’s provided in a collective bargaining agreement, the employer can provide “comp time” hours at the rate of one and a half hours for every hour of overtime the employee works. For example, if I work 45 hours this week, instead of five hours of overtime pay, I would get 7.5 hours of comp time put in my bank (5 overtime hours times 1.5 = 7.5 hours).
Use of comp time. If an employee asks to use his or her accrued comp time, the employer must grant the request “within a reasonable period” after the request, as long as doing so will not “unduly disrupt the operations of the employer.”
According to the ACT, there are limits and payout guidelines. The limit on accrued comp time is 160 hours per year. Any comp time not taken by the end of the calendar year (or another year designated by the employer) would be paid out at the employee’s regular rate when the comp time was accrued or at the employee’s current regular rate, whichever is higher. The payout would have to be made no later than 31 days after the end of the “comp time year.” If employment terminates voluntarily or involuntarily, the employer is required to pay out all accrued comp time to the employee.
If the employer gives 30 days’ notice to the employee, it can pay out any accrued comp time that exceeds 80 hours for the year. The employer can discontinue comp time whenever it wants by providing 30 days’ notice to the employees.
This seems like a win for both employers and employees. The employee and manager must agree before the work is performed and the employee must have worked at least 1000 hours before they are eligible for comp time, so the employer and employee have an established relationship. If an employee quits or is fired with time left in her bank, its’ payable upon termination.
Flexibility is always high on the list of things employees want–especially female employees–and this kind of situation gives it to them. Right now, exempt employees have more opportunities for flexibility than hourly paid employees, but this bill could change that. It seems like a great deal for all concerned.