The “Family Friendly Workplace Act”

Study finds that most prefer comp time to overtime.

A bill recently introduced in Congress (The Family-Friendly Workplace Act, H.R. 6025) would amend the Fair Labor Standards Act (FLSA) to allow employees of private employers the choice of accumulating “comp time” or being paid overtime pay for hours worked in excess of 40 during the same week. Some churches use comp time arrangements without realizing that they are violating federal law. Currently, the Fair Labor Standards Act prohibits comp time arrangements except for some government employees.

KEY POINT. The use of comp time can result in substantial liabilities for an employer.

The bill would not change an employer’s obligation under the FLSA to pay overtime at the rate of one-and-one-half times an employee’s regular rate of pay for any hours worked over 40 in a seven-day period. The bill would simply allow overtime compensation to be given, at the employee’s request, as paid comp time off at the rate of one-and-one-half hours of comp time for each hour of overtime worked, provided the employee and the employer agree on that form of overtime compensation. The bill contains numerous protections to ensure that the choice and use of comp time is a decision made by the employee.

KEY POINT. A study by the Employment Family Foundation found that 75 percent of workers prefer time off instead of overtime and 81 percent of women prefer to have that benefit.

KEY POINT. Similar bills have been introduced in Congress in the past, with little success. The current bill has 15 sponsors.

Statement by bill sponsor Cathy McMorris Rodgers

“The bill I am introducing would allow private sector employers to offer their employees additional time off in lieu of overtime pay. One of the greatest obstacles to flexibility in the workplace is the 1938 Fair Labor Standards Act which governs the work schedules and pay of millions of hourly workers. While the law may have been a good fit for the workforce of 70 years ago, it is simply not relevant to the needs of modern families …. The FLSA fails to address the needs and preferences of employees in the area of flexible work schedules. Although salaried employees typically have greater flexibility in their day-to-day schedules, hourly employees are much more restricted—due in large part to the outdated FLSA—in their ability to gain greater flexibility in their work schedules. The goal of the Family-Friendly Workplace Act is simple: to reconcile the overtime requirements under the FLSA with employee demands for increased workplace flexibility. Specifically, the bill would give private sector employers the option of allowing their employees to voluntarily choose paid compensatory time off (known as comp time) in lieu of overtime pay. Since 1985, public sector employees have been able to bank comp time hours in order to have additional time off for vacation or other family needs. There is no justification for denying private sector employees an option under the FLSA which, by most accounts, has been successful and immensely popular with public sector hourly employees for over 20 years.”

This article first appeared in Church Finance Today, August 2008.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

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