It's mark-up time in Washington this Wednesday morning when the the U.S. House Committee on Education and the Workforce gets to work on the Working Families Flexibility Act of 2013. (H.R. 1406). Great name. So why are organizations like the National Partnership for Women and Families opposed to it?
First, an explanation of the bill:
Under the terms of this bill, as introduced by Rep. Martha Roby, a Republican from Alabama, workers who are entitled to get overtime pay could choose instead to receive compensatory time, and could also choose to bank it -- up to 160 hours a year. With these hours in the "bank," there would be time to care for a family member, or attend school functions, proponents say. Just like overtime compensation, which is paid at a rate of one and a half hours of pay for every hour worked, one and a half hours of time could be set aside for each over time hour worked. And, if the workers later decide they'd rather have the money, all they have to do is ask, and the company must pay it within 30 days. After 80 hours in the bank, the company can decide to pay OT in cash, not time.
So why is the Partnership opposed to this bill? Here are some of the points the organization makes in its position papers:
Under the U.S. Fair Labor Standards Act, overtime must be paid promptly. It's clear-cut and relatively easy to enforce. There's no guarantee that workers banking comp hours will be able to use the time when they need it.
Companies, they say, will be more likely to offer overtime work to employees willing to accept comp time rather than pay. Workers who rely on overtime to make ends meet will face financial challenges.
Requesting comp time means that employees become lenders to employers. A worker earning $14 an hour who banks the maximum amount of hours (160) would be "lending" $2,240 to his employer. What happens if there is a bankruptcy or the business closes?
Employees shouldn't have to wait 30 days for their wages. And, if workers choose to bank their time for a future need, they shouldn't be forced to accept cash if the company changes its mind after 80 hours.
Because comp time is less painful to companies, they will have fewer compunctions about insisting on mandatory overtime, which can pose a problem for families relying on predictable hours.
The U.S. Department of Labor enforces overtime laws through a procedure that is intended to be easily available to workers. This proposed bill requires workers who feel they have been cheated to sue. The expense of hiring a lawyer will deter most employees from suing, effectively denying them protection.
Overtime also serves a larger societal function. When the overtime bill gets too large, employers see direct evidence that they need to expand their payrolls and hire more people. That message will be muted in a comp time situation.
Last week, Judith L. Lichtman, Senior Advisor, National Partnership for Women & Families, made many of these same points in testimony before a Congressional subcommittee. Here is a link to her written statement.
While the above expresses the opinion of the National Partnership for Women and Families, there are other organizations, including the U.S. Chamber of Commerce, that back the proposed bill. One of them is the Society for Human Resource Management. In Thursday's post, I'll summarize testimony that human resources executive Juanita Phillips, representing SHRM's 260,000 members, provided to a Congressional subcommittee last week.
Here's a link to the material that the committee provides on the bill. The committee is headed by Republican John Kline, a Republican from Minnesota.
What's next? A vote on the house bill will likely come next week. I'll keep you posted.
In the meantime, what has your experience been with comp time? When you work extra hours, do you get time off? Is it time when you need it? What are your thoughts on this bill?