House members voted 229-197 Tuesday to approve H.R. 1180, a bill that could give employers governed by the Fair Labor Standards Act of 1938 overtime rules formal permission to offer employees compensatory time off in place of overtime pay.

H.R. 1180, the Working Families Flexibility Act of 2017, could create opportunities for disability insurers, benefit plan administrators, payroll companies and other companies to expand sales of time-tracking and absence management services. Many of those companies have increased their focus on those services in recent years.

(Related: Department of Labor’s 2016 by the Numbers)

The bill was introduced by Rep. Martha Roby, R-Ala. The House Education and the Workforce Committee handled the bill before it reached the House Rules Committee.

All Democrats who voted Tuesday voted against the bill, and six Republicans crossed party lines to oppose it. It’s not clear whether the bill has enough support to pass in the Senate.

Bill Provisions

H.R. 1180 would let a private employer offer an employee up to 160 hours of comp time, or 20 standard eight-hour work days, in place of overtime pay per year, according to a copy of the H.R. 1180 bill text on the House Rules Committee website.

An employee would be eligible for comp time only if the employee had worked at least 1,000 hours, or the equivalent of 25 40-hour work weeks, for the employer in the previous 12-month period.

The employee would have to enter into an agreement to receive comp time voluntarily, and not as a condition of employment.

Once an employee had accrued 80 hours of comp time, the employer could choose to pay for the overtime with cash rather than with comp time.

The employer could require an employee to use the comp time requested “within a reasonable period,” and in a way that “does not unduly disrupt the operations of the employer.”

If an employer failed to provide the comp time earned, or pay for the accrued comp time not used, the employee could ask only for compensation for the value of the accrued comp time that was not provided or paid for, according to the H.R. 1180 text. H.R. 1180 does not appear to create any other fine or penalty for violations of comp time agreements.

Opposition

Labor groups and other groups oppose H.R. 1180, arguing that it would give employers all of the control over how much comp time workers could and would take.

Clock (Photo: Thinkstock)

(Photo: Thinkstock)

The leaders of the Leadership Conference on Civil and Human Rights wrote to Democrats on the House Education and the Workforce Committee to oppose the bill, saying it could reduce workers’ pay without giving the workers any guarantee of the ability to take time off when they want and need time off.

“This bill places all the control for taking compensatory time with the employer rather than the employee, a fundamental shift in the basic premise of the FLSA, which provides minimum standards to protect employees,” the conference leaders wrote, according to a copy of the letter on the Democrats’ section of the committee website.

“While H.R. 1180 supposedly makes it unlawful for an employer to coerce or intimidate an employee into accepting compensatory (comp) time, it fails to provide any administrative remedies for employees who have been coerced into accepting comp time or whose rights to freely choose comp time versus overtime payments have been violated,” the conference leaders wrote.

Opportunities

The Affordable Care Act and other new laws and regulations have increased employers’ time-tracking needs. For disability insurers, adding time-tracking services is a way to cope with the effects of low interest rates on group long-term disability insurance and voluntary disability insurance profit margins. For other time-tracking services vendors, providing the services is a way to diversify their sources of revenue and get closer to their employer customers.

If the bill became law and worked as written, it could create several new time-tracking tasks for time-tracking vendors:

  • Counting employee hours for comp time purposes.

  • Tracking employees’ total accrued comp time.

  • Tracking the accrued comp time that could be replaced with cash payments.

  • Processing employees’ requests for use of comp time.

  • Scheduling employees’ use of comp time.

  • Tracking whether employees had used the requested comp time.

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