Compensatory Time vs. Cash Wages: Amending the Fair Labor Standards Act?

Publication Date: April 2003

Publisher: Library of Congress. Congressional Research Service

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In the 108th Congress, two workhours flexibility bills have been introduced: S. 317 by Senator Gregg and H.R. 1119 by Representative Biggert. Both bills deal with a compensatory time off option (comp time) -- though the Gregg proposal is somewhat broader, projecting other changes in the overtime provisions of the Fair Labor Standards Act (FLSA) as well. This report is limited to consideration of the issue of comp time.

Since the mid-1980s, certain employer-oriented groups and individuals have urged amendment of the FLSA to alter current overtime pay requirements in order to broaden the opportunities for private sector employers to offer to their employees workhours flexibility. Legislation to effect this end was introduced at least as early as the 99th Congress and has been reintroduced in various forms up to and including the 108th Congress.

The legislation has been contentious. Presented as an option especially attractive to working women, it has been opposed by organized labor and by some women's groups such as "9to5: National Association of Working Women." Conversely, it has been supported by some industry and employer-oriented groups. Individuals and other organizations have spoken out both for and against the proposed legislation -- and have testified during the several hearings on the issue both in the House and Senate.

Under the FLSA, the standard work week is normally 40 hours. After 40 hours of work in a single week, payment for additional hours of work is at the rate of timeand-a-half (i.e., 1½ times a worker's regular rate of pay). Within a single work week, any combination of hours can be worked. However, once the total hours of work exceed 40 in a single week, the premium rate (time-and-a-half) must be paid. As proposed, the Gregg/Biggert legislation would allow an employer to offer to his or her employees the option of trading time off (compensatory time off, or comp time) for cash payment for overtime hours worked. Instead of being paid in cash for the extra hours of work, the employee would be allowed to take time off with pay on the basis of 1½ hours of paid leave for each hour of overtime worked. The legislation provides that the arrangement would be voluntary for each of the parties: each could opt out of the program and, if a worker so desired, the accrued (and unused) comp time could later be converted to cash earnings.

Through the years, a number of questions have been (and continue to be) raised with respect to these proposals. For example: How flexible is current law where private sector workhours practices are concerned? What level of choice would workers have under the proposal? What impact would it have on the basic wage/hour protections of the FLSA? At large, would comp time assist (or hinder) working parents as they attempt to meet their dual responsibilities of home and work? This report will be updated as developments may require.