Compensatory time off
(CTO) is when employers provide time off instead of overtime pay to an employee
who works excess hours. The federal Fair Labor Standards Act (FLSA) permits CTO
for publicsector workers, in very limited circumstances, but not for
private-sector employees. However, private-sector employers and employees could
be in for a change, thanks to a new measure introduced in Congress.
The bill, H.R. 6025—called
the Family-Friendly Workplace Act—would amend the FLSA to permit private
employers to offer employees the choice to receive CTO instead of overtime
wages. There must be a written comp time agreement, entered into knowingly and
voluntarily by the employee and not made a condition of employment. CTO
agreements could also be incorporated into union contracts.
CTO arrangements
would be available only for employees who worked at least 1,000 hours for the employer
in the prior 12 months. The legislation would require that employees receive at
least 1½
hours of CTO for each
hour of overtime. The employer would have to allow an employee to use CTO
within a reasonable time after the employee’s request to do so. (The bill does
not address what a reasonable amount of time would be.)
Under the
legislation, employees could accrue up to 160 CTO hours. By January 31 of each
year, employers would have to cash out unused CTO accrued during the prior
year, although employers could also design their own 12-month periods, paying
out accrued and unused time 31 days after that period ends. An employer would
also have to pay out any accrued time within 30 days of receiving an employee’s
written request and when employment terminates. Cashed-out CTO hours would have
to be paid at the employee’s regular rate at the time the CTO was earned or the
final rate, whichever is higher.
Employees could
withdraw a CTO agreement at any time and request payout of accrued time, and employers
could terminate the agreement with 30 days’ notice.
We’ll keep you posted on the bill’s status; you
can link to it online at http://thomas.loc.gov/cgi-bin/query/z?c110:h6025:. For
information on CTO in the public sector, see the November 2006 issue of CWHA.