How employers compensate their employees is an issue of hot debate. In May of 2017, the House of Representatives passed the Working Families Flexibility Act, a bill that would allow private employers to provide compensatory time to employees in lieu of paying them overtime pay. The bill would amend the Fair Labor Standards Act of […]Read More >
The Debate over Compensatory Time
- nettime solutions staff
How employers compensate their employees is an issue of hot debate. In May of 2017, the House of Representatives passed the Working Families Flexibility Act, a bill that would allow private employers to provide compensatory time to employees in lieu of paying them overtime pay.
The bill would amend the Fair Labor Standards Act of 1938, particularly with regard to overtime pay. Currently, comp time is permitted in the public sector only.
Background on the FLSA
President Roosevelt worked to establish regulations governing overtime pay, along with minimum wage, recordkeeping, and child labor laws, in the Fair Labor Standards Act of 1938. The Act resulted from a long struggle to modernize labor practices and wrest the nation from the grips of the Great Depression. Since then, the FLSA has been amended many times. Currently, Congress is considering amending the overtime rules by including comp time as an option in lieu of paying overtime for hours worked over 40 in a workweek.
What is Compensatory Time?
Compensatory time is an alternative way for employers to compensate their employees for working hours in excess of 40 per week. It allows employers to provide time off, or compensatory time, rather than one and one-half the employee’s regular rate of pay for each hour worked over 40 in a workweek. Compensatory time would be provided at a rate of one and one-half hours for each hour worked over 40 in a workweek.
The Modern Debate Over Compensatory Time
Since the days of Roosevelt and the New Deal, labor regulations have been a hot topic. Through the Working Families Flexibility Act, contemporary Republican lawmakers are seeking to amend the FLSA’s overtime provisions. They have proposed compensatory time as an alternative solution. They insist that it is a boon to businesses who are punished by current overtime mandates. They further claim that the Act allows workers to take the time they need for family matters, including vacations.
The bill, sponsored by Alabama Representative Martha Roby, allows workers to accrue up to 160 hours of compensatory time in lieu of overtime pay per year, with any unused time paid out in a year-end paycheck. Further, employees who are terminated or who quit of their own volition are to be reimbursed for their unused but accrued comp time in their final paychecks.
Conservatives claim that comp time allows flexibility for workers, so they are able to be present for their families or tend to personal needs.
The Democratic contingency in Congress holds that comp time unfairly favors industry at the expense of the worker. They contend that employees will feel pressure to take time off rather than receive overtime pay. Since managers have a financial incentive to promote comp time rather than pay, workers may fear that taking their earned pay will result in unpleasant consequences.
Democrats also contend that employers will compel longer hours at the most productive times of the year, thus maximizing their payroll dollars without any financial repercussions. Employees will feel forced to take time off when their time is less valuable. Further, the claims of flexibility are nullified when workers are compelled to work longer hours at the expense of their family obligations, then take their comp time at the whim of their employer.
Comp time also mutes financial and economic parity. For example, a worker might find herself laboring 60-hour weeks during her employer’s high season and then have extra paid time off during times of reduced sales volume. In this way, high-value time is repaid at times when labor is devalued. Then, financial concerns are likely to coerce the worker into taking lower-value time off rather than a healthy paycheck full of overtime pay. Democratic commentators also note that healthy paychecks pay for a child’s food, clothing, and shelter.
Final Vote on Comp Time
The Senate is now slated to consider the Working Families Flexibility Act. The House vote was largely on partisan lines, and the Senate vote is expected to be no different. To avoid a filibuster, Republicans will need to sway 8 Democrats, a tall order. Since similar measures have failed in the past, this legislation’s future is far from certain.
Comp Time Module by stratustime
stratustime is a cloud-based time & attendance software solution for small and mid-sized businesses. With the stratustime comp time module you can automatically reassign hours, set comp time pay rates & factors, and bank hours by employee, manager, admin, or a combination of roles. Our software can help you keep accurate records so you can comply with comp time regulations.