Some Frequently Asked Questions for the Curious…

The House passed a bill earlier this week that, if signed into law, would dramatically change private sector compensation in the United States.  Interested?  Keep reading.

What is “comp time”?  “Comp time” is the concept of allowing an employee who works overtime to choose paid time off in lieu of overtime compensation.  It is currently not legal in the private sector, but allowed in the public sector.

Why should I care about this bill?  As an employer, you may appreciate the cost savings of providing employees 1.5 hours of paid time off in the place of paying cash in overtime compensation which is currently 1.5 times the hourly wage.

When will this bill become law?  This is uncertain.  The House passed the bill this week, but must still pass the Senate and be signed by the President.  Republicans are optimistic they can get the bill passed.  It may be several weeks before it even hits the Senate for consideration.

What are the specific details?  As currently drafted, the bill allows employees to choose to accrue up to 160 hours of "comp time" for hours worked beyond 40 in a week.  Employers could not force employees to accept the comp time in lieu of actual overtime payments.  In addition, the bill allows both employers and employees to change the comp time option back to regular overtime.  Employers who make the switch would need to provide employees with 30 days’ notice.  If an employee’s accrued time off is not used by the end of the year, it will be cashed out.  Employers are supposed to honor an employee’s request to use comp time in a reasonable manner.  Opponents of the bill are fearful that employers will use the bill to discriminate against those employees who don’t choose the comp time option, and also wrongfully deny the use of comp time to those who do choose it.