Compensatory Time Coming to a Workplace Near You?

One of the intriguing employment law proposals making its way through Congress is the Working Families Flexibility Act of 2017. The bill, introduced in the House of Representatives as H.R. 1180 on February 16, 2017, and its counterpart in the Senate as S. 801 on April 3, 2017, would allow private sector employees to choose between receiving overtime pay as everyone is accustomed to currently or receive compensatory time consisting of paid time off at a rate of one and one-half hours for every hour worked over forty hours in a workweek.

While presenting flexibility with respect to overtime pay, employers would need to take care to comply with all of the WFFA’s requirements. For example, the WFFA directs any employer to secure the employee’s written (“or verifiable”) agreement to receive compensatory time in lieu of monetary overtime compensation and the employee’s certification that such agreement was entered into knowingly, voluntarily, and not as a condition of employment. The bill also places other limits on compensatory time, such as limiting accrual of compensatory time to 160 hours. Employees must also have worked at least 1,000 hours during a continuous period over the 12-months prior to agreeing to receive compensatory time off to be eligible for it, meaning many seasonal employees likely will not be eligible for compensatory time under the WFFA.

Some may recall that the WFFA was first introduced in Congress back in 2013. However, President Obama threatened to veto the bill shortly after its introduction and it never made any headway in the Senate under leadership at the time. However, with Republicans in control of the Senate, House of Representatives, and the White House, the bill has new life this time around. In the Senate, the bill would require some Democratic support to overcome current filibuster rules. In an election year, however, the WFFA may be one of those rare employment laws that finds bipartisan support. With the confirmation of Justice Gorsuch to the U.S. Supreme Court, the Senate has also shown a willingness to change similar filibuster rules.

Even if it passes, the WFFA may not provide immediate flexibility for Wisconsin employers. Wisconsin law currently provides similar overtime requirements to that provided under the federal Fair Labor Standards Act. The WFFA does not address such state laws and it would likely take a change at the state level to make federal and state rules consistent with each other.

Of course, all of this congressional activity comes while questions remain over the status of the Obama administration’s overtime regulation changes. While currently still on appeal before the Fifth Circuit Court of Appeals, the Department of Labor recently requested a third extension until June 30, 2017, to file a reply brief so that Secretary Nominee Alexander Acosta could be confirmed and consider the case. Acosta is expected to be confirmed by the Senate after Congress returns from recess on April 24, 2017. During his confirmation hearings, Acosta expressed a desire to update the salary threshold that is the subject of the DOL litigation but also acknowledged the stress that the salary doubling of Obama’s regulations placed on employers. Needless to say, the chances are high that some change will occur to overtime laws as we know them in the near future.