‘Emergency Measure’ Will Let Employers Withhold Wages for a Year
Republicans are once again trying to push through a bill that would give private-sector employers the right to withhold overtime wages by dangling the promise of compensatory time instead.
Today, International Workers’ Day, the Congressional Committee on Rules will meet to review the “emergency measure” known as the Working Families Flexibility Act of 2017, H.R. 1180. The proposed legislation, also called the comp-time bill, is sponsored by Rep. Martha Roby (R-Ala.), with 17 Republican House members cosponsoring and is an effort to amend the current law, the Fair Labor Standards Act of 1938 (FLSA). A related bill by the same name, S. 801, was introduced in the Senate by Sen. Mike Lee (R-Utah) in early April and has 19 Republican cosponsors.
Under current law, most hourly employees working more than 40 hours a week receive overtime pay at a standard rate of 1.5 times their current pay rate, or time and a half. The FLSA already provides everything this new bill claims to offer, like comp time. However, this deceptively named new bill gives employers the opportunity to withhold overtime wages—interest-free—for up to a year by offering time off instead—emphasis on the word “offer.”
This would be a voluntary agreement between employers and employees or a collective bargaining agreement for unionized employees. But the bill has a cap of 160 hours accrued at any time. And the only eligible employees are ones who have worked 1,000 hours of continuous employment in the 12 months leading up to the time the agreement is made.
There are several things wrong with this scenario. With the stipulations listed above, it seems few employees would be eligible for this comp-time arrangement. And the bill provides no guarantee that the comp time can actually be taken. It’s up to the employer if and when comp time can be taken, and if it would disrupt the business, it can be denied outright. But the employer can still hold onto the unpaid overtime wages for a year. And if a business goes belly up, tough luck for the overworked employee.
“Basically, the bill provides employers with an interest-free loan of employees’ overtime wages,” Celine McNicholas, Labor Counsel for the Economic Policy Institute, told DCReport.
Consider the math driving the bill. Let’s say a big employer like Wal-Mart had a comp-time bank holding 100 hours of overtime pay for each of its 100,000 employees, and the retailer paid $10 per hour. That would amount to a $100 million loan, interest-free, from the employees to the employer for up to a 13-month period, McNicholas explained.
No wonder big players like the U.S. Chamber of Commerce, an organization dedicated to making labor as cheap as possible, are lobbying for the bill’s passage. The organization was among several that testified in support of it at the hearing last month.
The Working Families Flexibility Act of 2017 is a basic twin of the bill by the same name that passed the House in 2013, H.R. 1406. That bill was also sponsored by Rep. Roby but defeated in the Senate.
And where’s the flexibility for workers insinuated by the bill’s name? “The bill provides no paid leave, paid sick days, paid vacation or fairer scheduling,” McNicholas said. “What it does is undermine the 40-hour work week and workers’ rights to overtime pay by giving employers a new right – the right to not pay overtime hours when the overtime is worked.”
Stay tuned as we track the progress these House and Senate bills.