The "Working Families Flexibility Act of 2025" amends the Fair Labor Standards Act to allow private-sector employees to choose compensatory time off instead of overtime pay, with certain conditions and limitations, and requires reporting on its usage and impact.
Mike Lee
Senator
UT
The "Working Families Flexibility Act of 2025" amends the Fair Labor Standards Act, allowing private-sector employees to choose compensatory time off instead of overtime pay, under certain conditions like a pre-work agreement and a cap of 160 hours accrued. The Act requires employers to compensate employees for unused time and prohibits coercion regarding the choice of compensatory time. The Secretary of Labor must update employee notices, and the Comptroller General will report to Congress on the use and impact of compensatory time. This act will automatically terminate 5 years after it becomes law.
New Bill Proposes Swapping Overtime Pay for Comp Time Off: What the Working Families Flexibility Act Means for Your Paycheck and Schedule
Imagine getting extra time off instead of extra cash for those overtime hours. That's the core idea behind the Working Families Flexibility Act of 2025. This bill proposes changes to the Fair Labor Standards Act, allowing private-sector employers (this doesn't apply to government jobs) to offer compensatory time off – or 'comp time' – at a rate of 1.5 hours off for every hour worked over 40 in a week, instead of the traditional time-and-a-half pay.
Trading Paychecks for Time Off?
So, how would this work? It's not automatic. If you're in a union, it depends on what your collective bargaining agreement says. If you're not in a union, you'd need to sign a written agreement before you work the overtime, saying you knowingly and voluntarily choose comp time over cash. Importantly, your boss can't make signing this a condition of keeping your job. There's also a catch: you need to have worked at least 1,000 hours for that employer in the past year to be eligible.
You can bank up to 160 hours of this comp time – that's equivalent to four weeks off for 107 hours of overtime worked. Think of it like a time-off savings account.
The Fine Print on Flex Time
Now for the rules and protections. Your employer has to cash out any unused comp time by January 31st each year (or within 31 days of their designated 12-month period). If you rack up over 80 hours, they can choose to pay you out for the excess time, but they have to give you 30 days' notice. Thinking of quitting? They have to pay out all your unused comp time then, at either the rate you earned it or your final rate, whichever is higher.
Changed your mind about the whole comp time thing? You can opt-out anytime or ask for your banked time to be paid out in cash. Your employer has 30 days to pay up. The bill also explicitly prohibits bosses from pressuring or threatening you about choosing (or not choosing) comp time.
When you want to use your banked time off, you need to request it. Employers are supposed to let you take it within a 'reasonable period' as long as it doesn't 'unduly disrupt operations.' These phrases – 'reasonable' and 'unduly disrupt' – aren't super specific, which could lead to disagreements down the line about when you can actually take that earned time off.
Watching the Clock: Reporting and a Five-Year Limit
To see how this all plays out, the Government Accountability Office (GAO) will track how often comp time is offered and used, plus any complaints or enforcement actions, reporting back to Congress for three years. This oversight aims to check if the system is working as intended or if problems arise.
Here's a big kicker: the entire setup has an expiration date. All these changes allowing comp time instead of overtime pay will automatically disappear five years after the law takes effect, unless Congress acts to extend it. This 'sunset' clause means this could be a temporary experiment, adding a layer of uncertainty for both employees trying to plan and businesses adapting their payroll.