House Republicans just voted to change overtime rules for workers
By Jena McGregor / May 2
On Tuesday afternoon, the House voted to pass a bill that Republicans have promoted since the Newt Gingrich era, one that would allow private-sector employees to exchange overtime pay for “compensatory time” off, electing to accrue extra hours off rather than extra pay in their wallets. The bill passed 229 to 197, largely along party lines.
The bill — which supporters say would add flexibility to hourly workers’ schedules while opponents worry that it wouldn’t do enough to protect employees — is not a new idea. It seeks to take a similar provision that has been available to government workers since 1985 and extend it to private-sector employees, making it legal for them to choose between an hour and a half of paid comp time and time-and-a-half pay when they work additional hours.
Similar bills have been introduced multiple times over the past two decades, passing the House three times before failing in the Senate. Although its fate is unclear in the Senate this year, the White House said Tuesday that it supports the bill, saying in a statement that it would “help American workers balance the competing demands of family and work by giving them flexibility to earn paid time off.”
Under the proposed changes, eligible employees — if their employer decides to offer the option — would be able to voluntarily choose to receive comp time they can bank and use at a future date in lieu of immediate overtime pay in their paychecks. If they change their minds and want the pay after all, employees would have the option of “cashing out,” with the employer required to pay the overtime within 30 days.
Proponents of the bill suggest the change would improve flexibility for overtime-eligible employees — often lower-wage hourly workers who don’t have the same access to paid time off as their salaried counterparts — to take care of their families.
“Ask any parent just how precious their time is,” Rep. Martha Roby (R-Ala.), who introduced the measure, said during debate on the House floor Tuesday. The bill, she said, “provides flexibility for working moms and dads who need more time to spend taking care of their family responsibilities.”
Some employer groups are big supporters. “It’s our strong belief that we ought to make this option available,” Lisa Horn, director of Congressional affairs for the Society for Human Resource Management, which represents employers, said in an interview. “The bill has built-in protections to make sure employees aren’t coerced into choosing comp times.”
But opponents worry those protections aren’t strong enough. Though the bill includes language that bans employers from “directly or indirectly intimidating, threatening, or coercing or attempting to intimidate, threaten, or coerce an employee” to choose comp time over pay, many Democrats and advocates for workers say they are concerned that people will feel pressure to opt for the comp time and may not have the resources to seek legal help if they are coerced.
“Under current law, if an employee wants to work overtime, put the money in the bank where it can earn interest and use it to cover the cost of taking some time off later with the permission of the employer, he can do that today — without this bill,” Rep. Robert C. “Bobby” Scott (Va.), the ranking Democrat on the House Education and the Workforce Committee, said on the House floor Tuesday.
Although employees have the choice of whether to take comp time or extra pay, opponents warn that it is their bosses who make the schedules that offer the extra hours many low-wage workers depend on.
“Whether it’s overt coercion, which language in the bill prohibits, or just a preference, there’s going to be strong incentives to giving overtime hours to workers choosing to take comp time,” said Vicki Shabo, vice president for the nonprofit advocacy group National Partnership for Women & Families.
She adds: “When you’re thinking about low-wage workers who need these jobs, the appetite to pursue [legal] remedies is going to be quite low.”
Others suggest the limitations requiring workers to give “reasonable notice” and not “unduly disrupt” the workplace with their requests for time off give employers plenty of latitude to say no.
“The reality is that it significantly shifts the balance of power and really puts the decision into the hands of the employer instead of the employee,” said Jocelyn Frye, a senior fellow at the left-leaning think tank Center for American Progress. “It doesn’t provide any level of assurance that the person will actually be able to use the leave for the purpose they need it.”
Democrats in the House sounded similar concerns Tuesday. “The choice between overtime pay and comp time is a false choice for workers,” said Rep. Pramila Jayapal (D-Wash.). “We know what happens in the reality of the workplace. The vague promise of time off in the future is often never realized.”
Horn, the SHRM executive, said she doesn’t see that as a concern. Employers who are “going to go to this trouble of setting up this program — I think it’s highly unlikely they’re going to turn around and forbid the worker from using it,” she said. She also notes that the penalties in the bill for coercion are “stiff” and should help deter employers from it.
Jonathan Segal, a partner in the employment group of the law firm Duane Morris, agreed. Penalties such as double damages to employees, he said, mean “there’s a material disincentive for employers to do the wrong thing,” he said.
Still, opponents said GOP rhetoric has suggested that comp time programs could be an alternative to family-friendly policies such as paid sick leave, which have been gaining ground at the state and local levels in recent years. They argue that low-wage workers should not have to make the choice, as well as that sick or family leave needs often don’t come with “reasonable notice.”
“It sets up a false narrative,” Frye said. “The notion you somehow have to trade off your pay for flexibility is certainly not the way it works for higher paid employees.”
Todd Stacy, a spokesman for Roby, said such remarks are “frustrating” and noted that the current bill is not a mandate, as well as that it prohibits even indirect coercion and lets workers cash out their accrued time if they and their employer can’t agree on when the comp time is taken. “It’s not for every employer and it’s not for every employee,” he said. “It’s simply meant as an option, to legalize it in the private sector.”
The bill now faces the Senate, where Majority Leader Mitch McConnell (R-Ky.) hasn’t shared his plans on the issue, according to a report in Bloomberg News. In 2013, however, he did support a version of a similar bill.
If it does ultimately become law, employers will have to decide whether to offer it. Horn says that of SHRM’s 285,000 members, “I probably have just as many who would like to offer the comp time as those who would never want to pursue this option. It is a lift for employers,” she said, meaning it requires planning, expense and logistics. “There’s the tracking of hours, and they carry the liability on their balance sheet in case there’s a cash-out. Some employers are just like ‘I would rather pay the straight option.’ ”