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Possible Change to Overtime Rule


 

 

 

 

 

 

On May 2, 2017, the House of Representatives passed the Working Families Flexibility Act (also known as H.R. 1180). If approved, H.R. 1180 would authorize private employers to offer compensatory time off instead of overtime pay for nonexempt employees who work more than 40 hours per week. H.R. 1180 still needs approval from the Senate and the executive branch before it becomes law.

 

Compensatory time off is already a common practice for many federal and state employers, but it is not currently allowed by the Fair Labor Standards Act (FLSA) for private employers. H.R. 1180 would amend the FLSA to allow this practice, if certain conditions are met.

 

H.R. 1180 is proposing that compensatory time off be calculated at the rate of 1.5 hours of compensatory time off for every hour of overtime work. As it stands, H.R. 1180 would expire within five years of its enactment. Additionally, the bill would limit the amount of compensatory time off to 160 hours for eligible employees.

H.R. 1180 would only apply to private sector employers, meaning that if it were to be adopted, it would not affect current compensatory time off requirements for public sector employees.

 

Under H.R. 1180, both employers and employees would have to agree to compensatory time off instead of overtime wages. Employers would not be allowed to directly or indirectly intimidate, threaten or coerce (or attempt to intimidate, threaten or coerce) employees to agree to receive or use any accrued compensatory time off.

 

Under H.R. 1180, employees would be eligible to receive compensatory time off after 1,000 hours of continuous employment during the previous 12 months.

 

In addition, H.R. 1180 would require employers to allow employees to use any earned compensatory time off within a reasonable period, as long as this does not unduly disrupt the employer’s operations.

 

Employers would be required to provide monetary compensation to their employees for any compensatory time off that is not used by the end of the calendar year. However, employers would be able to determine a different 12-month period as long as it remains consistent.

 

Because H.R. 1180 is not yet law, no action steps are currently required of any employers. We will continue to monitor the progress of this bill through the legislative process and update you as more information becomes available. In the meantime, contact Brady, Chapman, Holland & Associates, Inc. for more information regarding the FLSA and overtime wage payment requirements.

 

 

 

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