House Votes to Change Overtime Wages: Here’s What’s at Stake

On Tuesday, the House voted to pass the Working Families Flexibility Act, a bill to change the way employees are compensated for overtime work. The bill passed 229 to 197; no Democrats voted for the bill and six Republicans voted against it.

Supporters say the bill is aimed at providing more flexibility for hourly workers who put in overtime. Instead of being paid time-and-a-half for working extra hours, workers could instead choose to bank an hour and a half of paid time off.

Opponents, however, claim that the bill actually undermines certain provisions already allowed for under current law and doesn’t provide adequate protections for low-wage workers.

While the bill has passed the House, it still has to move through the Senate where its fate is less clear. There’s a thinner margin in the Senate, and similar bills have passed the House but failed in the Senate.

What the overtime bill does

Employers would be allowed to offer workers the choice between choosing overtime pay or paid time off. For every hour of overtime worked, employees could choose to be paid time-and-a-half wages or earn an hour and half of paid time off to use at a later date.

Employers wouldn’t be able to force workers to take paid time off instead of overtime pay. Employees could accrue up to 160 hours of paid time off each year.

On top of that, employers would be required to pay for unused paid time off within 13 months. Employees could also opt to “cash out” their unused vacation time if they later change their mind.

When workers ask to use their paid time off, employers must let them do so “within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer,” according to Bloomberg.

Support for the bill

Supporters of the overtime bill cite flexibility as the main benefit. They claim that the bill would allow employees the ability to choose to take time off later. The idea is that monetary compensation might not be as important to workers as their time.

Being able to take paid time off and fulfill family responsibilities or other obligations would be a benefit to workers, according to supporters. Instead of taking unpaid leave, they could be paid for the time off when it occurs.

Among supporters of the bill is the Society for Human Resource Management. Organization leaders point to the fact that this option has been available to government employees for decades and they think it’s time to move it into the private sector.

Opposition to the bill

Opponents of the Working Families Flexibility Act claim that it doesn’t actually offer flexibility and that there is the potential for workers to lose out.

They point out that the Fair Labor Standards Act (FLSA), which this bill is meant to amend, doesn’t stop employers from offering paid time off. They are free to do so now if they’d like.

Ross Eisenbrey, Vice President of the Economic Policy Institute, said in a letter to the committee considering the bill that it doesn’t offer enough protections. He pointed out that many workers prefer overtime pay because it helps them make ends meet.

Eisenbrey also took issue with the argument that workers could use the paid time off for family responsibilities. Since many family emergencies crop up with short notice and employers are free to deny these requests based on their disruptiveness to business, workers wouldn’t gain anything, he claimed.

Money versus time

The essence of the bill boils down to the classic tug-of-war between money and time.

Should this bill pass the Senate, you could choose to take overtime pay and use the money later to make up for any unpaid leave. Or you could forgo the immediate pay and bank hours for paid time off later, subject to employer approval.

For the most part, this type of rule affects mainly lower-income hourly workers. Salaried workers often have access to benefits such as set paid time off and paid sick leave. Salaried workers are instead potentially impacted by an Obama-era overtime rule that is now on hold.

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