H.R. 1406

Working Families Flexibility Act of 2013

Committee

Date
May 7, 2013 (113th Congress, 1st Session)

Staff Contact
Kimberly Betz

Floor Situation

On May 7, 2013, the House will consider H.R. 1406, the Working Families Flexibility Act of 2013, under a rule.  H.R. 1406 was introduced on April 9, 2013 by Representative Martha Roby (R-AL) and has 168 cosponsors.  H.R. 1406 was referred to the Committee on Education and the Workforce, marked up on April 17, 2013, and ordered to be reported by a vote of 22-14.[1]



[1] See Committee Report 113-49, page 26.

Bill Summary

H.R. 1406 amends the Fair Labor Standards Act (FLSA) to allow private sector employers and employees to establish agreements that provide for compensatory time off in lieu of monetary overtime compensation – an option that is currently available for federal, state, and local government employees.  Specifically, H.R. 1406 authorizes compensatory time off at a rate of no less than one and one half hours for each hour of overtime worked.

H.R. 1406 provides that compensatory time off arrangements must be consistent with any collective bargaining agreement, if applicable. Or, if not governed by collective bargaining, time off arrangements must be set forth in a written agreement prior to the performance of work.  All agreements must be voluntary and are only available to employees who have worked at least 1,000 hours of continuous employment with the employer.  Employees who choose compensatory time off may not accrue more than 160 hours annually and are subject to an annual cash out for any unused time.[1]  Moreover, employers may, with 30 days notice, provide cash compensation for an employee’s unused compensatory time in excess of 80 hours. 

Compensatory time off agreements may be terminated by either the employee or employer.  Employers may terminate the agreement with 30 days written notice (except where collective bargaining agreements apply).  An employee may withdraw from an agreement at any time. Within thirty days of an employee’s written withdrawal request, an employer must provide monetary compensation for all unused accrued time off.  The bill prohibits threats, intimidation, and coercion and authorizes a private right of action against an employer for monetary compensation due for each hour of compensatory time off accrued as well as liquidated damages in an equal amount.  Finally, the bill directs the Secretary of Labor to revise any materials provided to employers relating to information conveyed to employees about the compensatory time off option. 



[1] Annual cash outs may be defined within the 12 month calendar year or any other 12 month period as defined by the employer and employee. See H.R. 1406, Section 2(3)(B).

Background

The Fair Labor Standards Act (FLSA) sets forth minimum wage and overtime pay requirements, as well as standards as they relate to child labor in the United States.  Enacted in 1938, the FLSA covers employees as well as enterprises engaged in interstate commerce.[1] Enterprises are covered in their entirety if they generate more than $500,000 in annual sales or business.  For those enterprises generating less than $500,000 annually, individual employees of the enterprise are covered if their work engages them in interstate commerce.[2] Most public and private sector employees are covered under the FLSA.[3]

The FLSA directs that employees who are not exempt and are covered by the Act must be compensated at one and one half times the employee’s regular rate of pay for hour(s) worked beyond a 40 hour work week.[4]   For private sector employees, overtime compensation may only be in the form of cash wages.  However, state and local public employees have the option of receiving compensatory time off in lieu of monetary compensation for overtime hours worked.  Amended in 1985 to give state and local public employees the compensatory time off option, the changes to FLSA were the result of acknowledgements that the workplace and workforce were changing.[5]  Federal employees are also afforded the compensatory time off option through the Federal Employees Flexible and Compressed Work Schedules Act, which was enacted in 1978.[6]

Since the 104th Congress, the House has focused on the need to bring parity to private sector employees. Legislation has been introduced in the 104th, 105th, 106th, 107th, 108th, 109th, and 111th Congresses -- passing the House on two separate occasions – both in 1996 and 1997.  The bill was reported out of the full House Education and Workforce Committee in 2003 by a vote of 27-22.[7]



[1] See CRS: The Fair Labor Standards Act (FLSA): An Overview page 7 and 8.

[2] See id.

[3] Those individuals who are not covered include: those individuals elected to state or local government offices and members of the respective staff; policymaking appointees of elected officeholders of state or local governments; employees of legislative bodies of state or local governments; immediate family members of an employer engaged in agriculture; persons who volunteer their services to a state or local government; and persons who volunteer their services to a private, nonprofit food bank and who receive groceries from the food bank. Those who are exempt from minimum wage and overtime include executive, administrative, and professional employees if they meet both a salary and job test.  Certain employees in computer-related occupations are exempt if salary and job tests are met. Finally, domestic workers who provide companionship services in home are exempt.  (See id page 8).

[4] See Committee Report 113-49, page8 citing 29 U.S.C.§207. See also CRS: The Fair Labor Standards Act (FLSA): An Overview, page 12.

[5] See Committee Report 113-49, page 9 citing the Senate Labor Committee in 1985 “ The Committee is cognizant that many state and local government employers and their employees voluntarily have worked out arrangements providing for compensatory time off in lieu of pay for hours worked beyond the normally scheduled work week. These arrangements – frequently the result of collective bargaining – reflect mutually satisfactory solutions that are both fiscally and socially responsible.  To the extent practicable, we wish to accommodate such arrangements.”

[6] See id, page 8.

[7] See id, pages 3-6 

Cost

According to CBO, “enacting H.R. 1406 would not affect direct spending or revenues; therefore, pay as you go procedures do not apply.  Implementing the bill also would not affect spending subject to appropriation.

H.R. 1406 contains no intergovernmental or private sector mandates as defined in the Unfunded Mandates Reform Act and would impose no costs on state, local, tribal governments.’[1]



[1]See  http://www.cbo.gov/sites/default/files/cbofiles/attachments/hr1406.pdf

Amendments

Gibson (R-NY), King (NY-R), Meehan (R-PA) Amendment  #5 – amendment requires GAO to submit a report to Congress on the usage of compensatory time allowed under the FLSA and detail complaints filed or enforcement actions taken for alleged violations of the FLSA.  The report will ensure Congress monitors any potential abuse.