Saturday, May 11, 2013

Comp Time vs. Overtime Pay

Reading up on HR 1406, called the Working Families Flexibility Act.

The bill gives the employees of taking comp time instead of overtime pay for overtime hours worked, at the rate of 1.5 comp hours per hour worked. Those hours go into a pool (that cannot exceed 160 hrs), from which the employee can draw with advance notice with employer agreement--an employer can refuse if taking that paid leave would unduly disrupt business operation (uncertain how this degree of freedom compares to existing comp time policies). Unused hours must be paid back at the end of the year. Companies are forbidden from coercing employees to choose one overtime option or the other (enforcement of this could be difficult if influence is exercised indirectly).

Supporters of the bill argue that it gives working families more flexibility, similar to what is available to government employees (I was unable to find policies on government employee overtime for comparison). They argue that additional paid leave can often be more valuable to an employee than the overtime pay would be, and that the employee is not unduly restricted from taking that time.

Opponents of the bill worry about how it will be used, calling it an attack on the 40-hour work week. They say that corporations would choose to give overtime hours to employees that chose comp time so as to avoid immediate expenses (comp time amounts to an interest-free loan of one's overtime pay to the company), to the detriment of employees that chose overtime pay because they need it. They wonder if employee comp time can really be used at employee discretion in practice. And they argue that companies would pressure employees to work overtime for comp time in lieu of hiring more workers in times when more hours need to be worked.

Versions of this bill have been presented several times in the past, without success. This time the bill has passed the House and is expected to fail in the Senate. These points raise the question of whether it's just a political football being tossed back and forth for talking points before being inevitably kicked down the road.

First, is this an objective assessment, and is it missing anything? Second, do you think the bill is good for workers, companies, and/or the economy?

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