H.R. 1406: Time Off Instead of Overtime Pay

H.R. 1406 the “Working Families Flexibility Act of 2013” allows employers to offer their employees paid time off instead of overtime pay, if the employee agrees to it.

*Get all the details on this bill in podcast episode CD028: Overtime


The Fair Labor Standards Act of 1938 established rules for company owners to prevent mistreatment and general screwing over of their workers. This law was responsible for, among other things, prohibiting child labor, the minimum wage, and guaranteed time-and-a-half overtime payments.

The Working Families Flexibility Act changes the rules regarding guaranteed overtime payments.

Bill Highlights

Section 2: Adds a new section to the Fair Labor Standards Act of 1938. The new section says:

(s) Compensatory Time Off for Private Employees

(1) Instead of direct time-and-a-half payment of overtime pay, an employee will be allowed to be given time-and-a-half in paid time-off.

(2) Conditions

  • This is only allowed if allowed by applicable collective bargaining agreements.
  • The boss and employee agree to this arrangement in writing before the overtime work is performed.
  • The employee must accept this arrangement voluntarily and must not be forced into it by the terms of their employment.
  • To receive time-off instead of overtime pay, the employee must have worked at least 1,000 hours for the boss in the year before agreeing to the time off arrangement or taking the time-off (that’s about 20 hours per week).

(2) Hour Limit

  • The employee cannot accrue more than 160 hours (four weeks) of overtime time-off.
  • By January 31st of each year, the boss must pay the employee for any overtime time-off that they didn’t take in the previous year.
  • The boss is allowed to choose to pay the employee for overtime over 80 hours after giving the employee 30 days notice, which is not required to be in writing.
  • The boss will be allowed to cancel the time-off arrangement by giving employees 30 days notice, which is not required to be in writing.
  • The employee will be allowed to cancel the time-off arrangement at any time. They can request payment for their accrued time-off in writing and the boss must give it to them within 30 days.

(4) Rules for the Boss

  • The boss is not allowed to “intimidate, threaten, or coerce” an employee in order to get them accept a time-off instead of payment arrangement.
  • The boss is not allowed to require an employee to use their time-off.
  • Breaking this rule will result in the boss having to pay the employee their overtime pay plus damages. (Section 3)

(5) End of Employment

  • The employee must be paid for their unused accrued overtime time-off when they leave the company, regardless of whether they quit or were fired.

(6) Pay Rate

  • The employee must be paid at least the rate they were making at the time they accrued the overtime time-off or their final pay rate, whichever is higher.

(7) Use of Time-Off

  • An employee who wants to use their accrued overtime time-off “shall be permitted by the employee’s employer to use such time within a reasonable period after making the request if the use of the compensatory time does not unduly disrupt the operations of the employer.”

Section 5: The bill expires five years after it’s signed into law.

Support and Opposition

In general, organizations of owners are supporting this bill while organizations of workers and unions are opposing the bill.

H.R. 1406 passed the House of Representatives on Wednesday, May 8th. It now moves into the Senate where it will die.

0 thoughts on “H.R. 1406: Time Off Instead of Overtime Pay

  1. Michael Beverly

    Is there any form of a push in the country to limit the number of hours an employee can “force” you to work? I know I am not the only one having issues with this, and have been actively trying to find some group or groups working to put an end to it. I have been working 7 days straight, between 12 and 15 hours per day and my employer just switched the two days I had scheduled off to only one. As he changes the schedule every weds it means I may have my one day off and be forced to work another 7 days straight. Yes I realize I could just quit, but I like my job and believe it is just an incompetent manager. Why cant the government take a step to help us out? If I am asked to work over time and have the option to say no without consequence, or to say yes, then at the least it is my own decision. As things are now though there are no laws regulating the number of hours an employer can work someone. In other words I could technically require an employee that is in a bad way and relying heavily on the paycheck i give to survive to work 168 hours a week. Seems unrealistic but it could be done. Basically anyone that can issue a check to someone has been empowered with the ability and right to bully people. I find a massive failure in the government for allowing this. It is not as simple as saying “you have the right to quit”. Yes I could quit and I could end up spending several months looking for another job. Given the options, I and most others would not take the risk and would try to stick it out even though we are being bullied and placed into unneeded health issues due to over work and no time for the body to recuperate. This causes more than just issues for the worker. The workers family must suffer as well.
    If a person wishes to work 7 days a week then by all means let them work it. However, there needs to be an option for those that don’t, for those that want to have time with the family or whatever other reason.
    Anyways if you know of someone or some group attempting to place laws into effect please let me know so that I can actively support them.