There's a new comp time proposal - here are 3 takes on it
There’s a new comp time proposal, and it would allow private employers to offer time-off instead of cash.
In May, the Working Families Flexibility Act of 2017 – which seeks to adjust the Fair Labor Standards Act (FLSA) – passed the House of Representatives.
The bill allows private sector employers to compensate employees who work overtime with paid time-off (PTO) instead of overtime pay. However, employers are prohibited from encouraging or otherwise pressuring employees to choose PTO over actual overtime pay.
Just as overtime pay is 1.5 times the regular rate of pay, employees would receive 1.5 hours of PTO for every one hour of overtime, and they would be allowed to accumulate up to 160 hours of PTO per year.
The bill requires that a written agreement be reached between employer and employee – an employee opting for time-off instead of pay must do so voluntarily.
Here are 3 takes on the new comp time proposal and how it could affect your business and team if it becomes law.
Take 1: The new comp time proposal looks out for the best interest of employees
Because the bill would require 1.5 hours of comp time for each hour of overtime worked, employees would have more actual time to utilize externally and independent of the workplace.
Also, this bill would have little to no effect on employees who need and/or prefer the standard overtime payout at a time-and-a-half rate, as opting to use comp time instead of receiving overtime pay would be a voluntary choice they make and agree to in advance and in writing.
Take 2: The new comp time proposal is another burden for business
Administratively, it would be cumbersome for mid to large organizations who have frequent (or any!) overtime occurrences to effectively manage the tracking and documentation this new proposal would require. The scheduling and timekeeping issues that managers might face could be detrimental to standard productivity, and not just with managerial time, but also if too many workers utilize comp time at once during a large project or busy season.
There also may be mixed feelings on when and how employees should choose comp time instead of overtime, with the impression of employees having the “voluntary” decision-making taken away.
Take 3: The new comp time proposal suits the needs our modern workforce demands
It’s getting harder and harder to effectively staff non-exempt positions for the long term, and employee turnover is a greater cost and concern of HR than managing the new comp time/overtime proposal would be. Creating a strong work-life balance and a flexible environment for team members is a top growing need of businesses when looking to recruit and retain a talented workforce.
It also allows employees to feel more in control of their time, and therefore the time they do spend working overtime is more meaningful and valuable to them, as opposed to “begrudged excess time” spent away from their families, hobbies, and commitments. In the end, the perception alone could do great things for morale and commitment.
Of course, it’s implementation would require education and support from HR for employees and managers. However, it could certainly make for better work-life balance in addition to employment longevity – two high-priority items that HR professionals regularly strive for.