Need a vacation? Just work overtime!

By Dave Palmer

According to an article in the Huffington Post , the GOP-led House of Representatives is working on a bill that would allow employees to choose to take compensatory time in lieu of overtime. The idea is to allow workers to work overtime (each hour counting as an hour and a half of comp time) and either save the time for a sick day, a paid day off for a doctor’s appointment, or an extra week of vacation. The purpose of this act would be to extend to the private sector the same sorts of comp time benefits employees of the public sector enjoy.

The proposal to modify the Fair Labor Standards Act’s provisions regarding overtime is not new. H.R. 1119, cutely named the Family Time Flexibility Act, proposed a similar change to the overtime system. The failed proposal allowed an employer to offer, and an employee to receive, in lieu of monetary overtime compensation, comp-time at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required under the Act.

Also among its provisions was a requirement that the employee have worked at least 1,000 hours during a period of continuous employment with the employer in the 12-month period before the date of agreement or receipt of comp-time.

Perhaps the most interesting provision is that it required employers to permit use of comp-time accrued under such an option program within a reasonable time after the employee’s request if such use does not unduly disrupt the employer’s operations. (emphasis added)

The Fair Labor Standards Act, which the newest proposal seeks to amend, was put in place so that workers could have a predictable schedule of work time, fun time, and sleep time. It made it more costly for employers to require people to work more than 40 hours a week, giving businesses an incentive to hire more workers to avoid paying overtime. It also made sure that employees who wished to work long hours or were required to work long hours were properly compensated for their time.

In that respect, this proposal amounts to nothing more than allowing companies a back door way out of paying for overtime. All employers have to do is “ask” that their employees choose to take the comp time versus the overtime compensation, then either make sure that their employees rack up less than 1,000 hours during a continuous employment period or continually insist that comp time usage would “unduly disrupt their operations.”

Republican Rep. Martha Roby of Alabama plans to introduce the bill in the House next week, according to USA Today. “”Comp time is comp time, and you can use it for whatever you want,” she said. “Think about going to your child’s play, not just a doctor’s appointment. You don’t want to take vacation time for that,” Roby stated in the article.

Oh really? So, what happens if using your comp time “unduly disrupts” your employer’s operations? Can you still use your comp time to attend your child’s play or go to the doctor’s, or will you have to miss the play and use vacation time to visit the doctor?

Clearly there are many questions that surround the provisions of the proposed bill, and there are sure to be many more. The last thing that we need is to add more confusion to a system that is already fraught with problems.

Federal and state labor investigators already deal routinely with court claims regarding denial of overtime benefits in what seems to be a clear-cut system. For instance, Wal-Mart was caught moving overtime hours from one week to the next week where they wouldn’t have to be paid as overtime hours. I shudder to think how they would treat “optional comp time.”

Public sector employees are afforded the opportunity to exchange overtime for comp time in the interest of keeping the cost of government down. This means keeping taxes relatively low, and easier budgeting for politicians. There is no profit motive in government, and governmental employees are highly unionized, so this policy makes sense in the public sector.

However, most private companies have a profit motive, and relatively few people employed in the private sector are unionized. Corporations and businesses stand to increase their profits by allowing employees to save up comp time (which of course will be paid at the regular rate of pay) instead of paying one and a half times the normal hourly rate for accrued hours beyond 40 per week. Therefore, companies will be incentivized to make employees work longer hours. In the mean time, employees may have to wait a year or more to cash in on their comp time. This doesn’t even take into consideration what might be considered a “period of continuous employment” or what happens to the comp time you haven’t used if you quit your job or get fired.

This bill clearly will present more questions than answers, and provide employers a legal way out of compensating employees one and half times times their normal hourly rate for the extra time they have to spend away from their families.  If Congress wishes to pursue true reform in the field of paid sick days and paid vacation days, they can start by passing a law that guarantees every American citizen a minimum number of sick days and vacation days each year.

Call your Representatives and Senators and tell them to leave overtime alone. Employees clearly have no guarantee that they will ever see compensation for their overtime work, even if they do accrue more than 1,000 hours in a period of continuous employments during the 12 months preceding their comp time agreement or receipt of their comp time. Additionally, employers will be incentivized to make employees work longer hours and hire less people. Americans will have less predictable work weeks, and their paychecks will be smaller in the long run. Smaller paychecks and less predictable free time are not a pathway to economic recovery.