Congress lets employers swap overtime pay for comp time—for five years
H.R. 2870 — Working Families Flexibility Act of 2025 · Filed by Mary Miller (R-IL) · Introduced Apr 10, 2025 · Reported out
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What it does
This bill allows private-sector employers to offer employees compensatory time off (comp time) instead of overtime pay for a 5-year period. Employees working at least 1,000 hours annually can accrue up to 160 hours of comp time at a rate of 1.5 hours per overtime hour worked, but must receive cash payment for unused time within 31 days of each year-end. The agreement must be voluntary, in writing, and not a condition of employment; employers cannot coerce employees to take comp time or use it.
Why we flagged it
The bill's operative mechanism is to permit substitution of deferred comp time for immediate overtime wages, reducing employer labor costs and deferring cash obligations. While framed as worker flexibility, the primary effect is to weaken the FLSA's overtime mandate by creating a legal alternative to wage payment.
What the text implies
- Comp time accrual creates a floating liability for employers that may never be paid if employees do not use the time before year-end; the 31-day payout window is short but the accrual period is long, creating cash-flow advantage for employers.
- The 160-hour cap (roughly 4 weeks) may incentivize employers to structure schedules to keep comp time near the ceiling, effectively capping overtime hours employees can work without triggering mandatory payout.
The full analysis lists 5 implications of this text.
Who stands to gain
private employers (labor cost deferral and cash-flow benefit); industries with high overtime exposure (retail, hospitality, logistics, healthcare)