New Overtime Rule Would Offer Time Off, Instead of Cash

Sen. Chuck Schumer (D-NY) speaks during a December press conference in Washington, DC about the immediate need to implement the Labor Department’s new overtime rule.

The House is expected to vote this week on a workplace bill that could allows businesses to substitute overtime pay for compensation time, increasing labor flexibility for CEOs and potentially reducing their cost burdens.

The proposed changes would add some icing to the cake for businesses looking forward to the repeal of a raft of workplace legislation since Donald Trump was elected in November.

Obama’s so-called contractor blacklisting rule has already been scrapped and the former president’s overtime pay rules—which more than doubled the minimum salary at which around 4 million workers could qualify for an overtime exemption—are among others in the firing line.

It’s currently only legal for public-sector employers to reward overtime with paid compensation time, basically allowing employees to have time off to make up for the extra hours they’ve worked.

“Any working parent will tell you how valuable time flexibility in the workplace can be. The workforce has changed tremendously, but our laws and policies that govern the workplace haven’t.”

 

Private-sector companies, however, are still bound by law to award time-and-a-half overtime pay for each hour worked beyond 40 hours a week. Under the new bill, approved last week by the House Committee on Education and the Workforce, employees could instead agree to get one-and-a-half hours of paid leave for each extra hour worked.

A similar bill has been approved in the House three times since 1996 but fallen short in the Senate, which is now controlled by Republicans by a slim 52-to-48 majority, leaving its passage exposed to a potential filibuster.

Opponents argue that employers already are free to offer staff paid leave and that the desired changes to the rules would, on balance, erode workers’ rights.

The bill, however, comes with worker protections: they must voluntarily agree to take time off and can’t be coerced into doing so by their employer. Workers are also are able to claim unused comp time as cash and should be offered hours off “within a reasonable time” of making their request.

“Today’s workforce is more diverse than ever, especially as it concerns working parents,” Alabama Republican Martha Roby, who is sponsoring the bill, wrote in an opinion piece for The Hill.

“Ask any working parent and they’ll tell you how valuable time flexibility in the workplace can be. The workforce has changed tremendously, but our laws and policies that govern the workplace haven’t.”

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Ross Kelly
Ross Kelly is a London-based business journalist. He has been a staff correspondent or editor at The Wall Street Journal, Yahoo Finance and the Australian Associated Press.

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