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Everything You Need to Know About the Working Families Flexibility Act 2017

Employment Law

The Working Families Flexibility Act passed 229-197 on May 2, 2017. The Bill intends to “amend the Fair Labor Standards Act of 1938 to provide compensatory time for employees in the private sector” (preamble of the Bill).  The Fair Labor Standards Act mandates that employees who work over forty hours a week in the private-sector must be paid time-and-a-half. Essentially, the new bill gives     employees the option to have time off in lieu of overtime payment.

Republicans argue that working parents will benefit from the flexible working hours by having the option to take time off to spend with their children. However, in contrast, England introduced flexible working which captures the true essence of flexible hours whereby employees may request to work from home on certain days, compress their full time hours over fewer days, and choose when to start and end work outside ‘core hours’ (10am – 4pm). England’s policy in practice enables employees to have a greater work life balance. We will have to wait and see whether the same applies to the Working Families Flexibility Act of 2017 and whether employees actually derive a benefit from the amendment.

Democrats fear that the bill circumvents employees’ rights. The House Minority Whip Steny Hoyer (D-Md.) argued that “[w]hile they say it’s voluntary and a matter of their choice, as a practical matter, it’s not”. However, Section (2)(ii) stipulates that the employee must enter into the agreement knowingly and voluntarily. Other concerns are that compensatory time is essentially a “vague IOU” (Rep. Suzanne Bonamici (D-Ore.)) and that employees would be better off receiving overtime pay to deposit into their bank accounts to receive interest. However, in America where employees have the most unused vacation days, perhaps this Act will begin to shift the country’s perspective.

What does the bill actually amend? Section 7 of the Fair Labor Standards Act of 1938 by adding subsection (s) Compensatory Time Off for Private Employees:

GENERAL RULE. – An employee may receive, in accordance with this subsection and in lieu of monetary overtime compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required by this section.

Employees will only be able to receive compensatory time of up to 160 hours. Assumingwork weeks out of 52 weeks per year, this only equates to just over 3 hours of overtime per week or 6.6 days of time off.

What are the conditions to receiving compensatory time?

  • Employees must be employed by a private company. Public agency employees are not entitled to the benefit.
  • Employees must have worked a minimum of 1,000 hours of uninterrupted employment within the past 12 months.
  • Employers must enter into an agreement with either the employee’s labor organization or the employee him or herself.
  • Employer must offer and the employee must accept to receive compensatory time instead of overtime pay.
  • The employee must enter this agreement “knowingly and voluntarily … and not as a condition of employment” (Section 2(B)(ii)).

If employees do not take all their compensatory time off, employers are obligated to provide monetary compensation by January 31 of every year. However, employers have the option to provide monetary compensation of compensatory time greater than 80 hours if they provide the employee with a 30 day notice. The employer also can give employees 30 days’ notice to discontinue the policy, unless the original agreement states differently. What are the employees’ rights? Employees can opt out of the policy or request their overtime pay through written request to their employer, who will have 30 days to pay the employee. They also can use their compensatory time at any period with the employer’s consent, which cannot be unreasonably withheld.

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