On Tuesday, May 2, 2017, the House passed a law that gives employers in the private-sector the option to give employees Paid Time Off (PTO) in lieu of overtime pay. The "Working Families Flexibility Act of 2017," or H.R. 1180, modifies the Fair Labor Standards Act of 1938 by adding the clause,
"An employee may receive, in accordance with this subsection and in lieu of monetary overtime Compensation, compensatory time off at a rate not less than one and one-half hours for each hour of employment for which overtime compensation is required by this section."
This means that instead of receiving their overtime pay on the next paycheck, the employee earns PTO to be used at a later date.
This later date must be approved by the employer.
Concerns
What if employees still want overtime? Can this new bill be forced onto the employee? How long can an employer delay PTO requests?
The H.R. 1180 bill explicitly states the employers cannot force employees to choose PTO instead of overtime. The employer and employee must enter into an agreement and the employee can choose to opt out at any time. The bill also states that it cannot be used as a condition of employment, meaning an employee cannot be turned down for a job or terminated because they do not want to participate.
PTO requests can be refused if the employer believes it will disrupt business operations. The bill states that the employer must grant an employee's PTO request within a reasonable time, provided that it does not "unduly disrupt the operations of the employer." PTO must be used within the same year it occurred.
The employee can either take the time off or the employer pays the employee for the unused time, up to 80 hours. The employee will be compensated for their time, just at a later date.
Takeaway
H.R. 1180 offers the employer the option to offer employees P.T.O for their overtime instead of receiving overtime pay. The 'P' in P.T.O stands for "paid." The employee is still compensated for their work, H.R.
1180 just gives them another way to receive overtime compensation. This is useful for people who need extra time off but cannot afford it. The pay rate is still time-and-a-half for every extra hour worked. Employers can neither force this option nor can they use it without the employee's consent. Employers must respond to PTO requests in a timely manner or pay for any unused PTO at the end of the fiscal year.
H.R. 1180 is not a condition of employment, so employees can opt-out at any time.
H.R. 1180 gives businesses more options when offering overtime pay to employees. It is not meant to violate employee rights.
