Comp Time

Private-sector employers soon may be able to grant compensatory time in lieu of overtime pay to employees.

Recently, two blog readers asked a question about the use of compensatory (comp) time in the private sector during a discussion about tracking exempt employees’ hours worked. One reader’s company tracked exempt employees’ hours worked, and permitted the employees to “flex” any hours worked in excess of a normal workweek, either later that week or in future weeks on an hour-for-hour basis, subject to work loads and scheduling requirements.

As more states institute mandatory paid leave laws, two U.S. Senators have introduced legislation that would provide employers with a tax incentive for offering paid time off. On July 16, Senators Deb Fischer (R-NE) and Angus King (I-ME) introduced the Strong Families Act (S. 2618), a bipartisan measure that would create a 25% non-refundable employer tax credit for each hour of paid leave provided to employees, capped at $4,000 per year for each qualified employee. To be eligible, the employer must offer at least four weeks of paid leave. Such leave would have to be available on an hourly basis, and distinct from vacation or sick leave. Employers of any size would qualify for the tax credit. Finally, the bill includes anti-retaliation provisions.

With Senate Majority Leader Harry Reid (D-NV) expected to bring the Fair Minimum Wage Act of 2013 (H.R. 1010; S. 460) up for consideration in the remaining legislative weeks of 2013, Republican lawmakers are countering with their own workplace proposals. On Wednesday, Sen. Mitch McConnell (R-KY) was one of two Senators to introduce legislation that would allow exempt private sector employees to opt for paid time off in lieu of payment for overtime hours worked. The Family Friendly and Workplace Flexibility Act (S. 1626) would amend the Fair Labor Standards Act (FLSA) to allow employers to offer comp time to employees at a rate of one-and-one-half hours for every hour of overtime work. The process would be voluntary and, according to a press release on the measure, would create.