W2 Issues/Concerns

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Check out our weekly blog posts and see the latest news and discussions happening in the HR world of business.

House Passes Bill that Would Swap Overtime Pay for Comp Time

The House recently passed the Working Families Flexibility Act of 2017, which would allow private sector employers to offer up to 160 hours of comp time in lieu of paying workers time-and-a-half for overtime. A similar bill has also been introduced in the Senate.

Under the legislation, employers would also be required to pay workers for their unused time, but the rub here is that they only have to pay them out at their regular pay level (versus at the time-and-a-half rate that they would have been paid had it originally been classified as overtime).

Where this presents a major headache for HR reps is that employees do not have to take this option. Rather, they can choose to opt in to the comp time and employers cannot force workers to accept the paid time off option. Therefore, any one company may have none, one or even all employees choose the comp time option, or vice versa. 

Supporters of the legislation – which is commonplace in the non-private sector – suggest that it could benefit employers by allowing them to save on overtime pay, while allowing employees to add more vacation time to achieve a better work/life balance. However, critics claim that it opens the door for companies to cheat employees who work long hours out of better wages.

To learn more about the bill, click here.

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