The various media pundits and news stories are calling H.R. 1180 a “new overtime bill”. However, in reality the ‘take pay or take time off’ concept is more than 50 years old; we used to call it “compensatory time” or “comp time”.
WASHINGTON – […] Voting along party lines, the House of Representatives passed a bill Tuesday that would allow private-sector employers to compensate their overtime-working employees with paid time off instead of paying them time-and-a-half as currently required.
The bill, H.R. 1180, would tweak the Fair Labor Standards Act, which mandates employers that require hourly-paid employees to work more than 40 hours a week to pay time-and-a-half, or 1.5 times their usual hourly rate. The bill also prohibits employers from coercing or intimidating employees to choose time off instead of overtime pay.
House Republicans passed the bill, sponsored by Rep. Martha Roby (R-Ala.), with no Democrats voting in favor. The bill will now go to the Senate, where it will require 60 votes to avoid a filibuster by Democrats. (read more)
The professionally Democrat hate the concept, but most Democrat politicians have zero experience in understanding how incredibly beneficial compensatory time can be.
The basic principle can be awesome for employees for a variety of reasons. However, few young workers today have an understanding of how it works.
Say you work 60 hours in a week. If ‘compensatory time’ options are available you can take your standard 40 hour paycheck and defer the 20 overtime hours to future time off at the OT rate of time-and-a-half (20 x 1.5), gaining you 30 hours of comp time.
Historically this was an excellent way for middle-class young people to attend college and still get a consistent paycheck. You work five weeks at 70 hours per week and the 150 overtime hours convert to 225 paid comp time hours. That’s six weeks off and you are still getting a paycheck.
I know dozens of people who worked long hours in the summer, and Thanksgiving/Christmas holiday breaks, building up enough comp-time so they received a paycheck throughout their entire college terms when they were not working.
Even more people used comp-time as a bank to save up time off for childbirth or other family plans where they could take big chunks of time off work and still get paid consistently.
Additionally, even more people used partial ‘comp-time’ as way to work periods of only part-time (2 days a week etc.) but still be paid for the entire week filling in the other 3 days with comp-time. This was the preferred practice for working students during college semesters; there was never a downside.
Nothing was ever forced it was simply an option. Take the overtime pay, or bank the overtime as paid time off. It was a great system and provided numerous benefits while simultaneously allowing the business to control payroll and labor cost efficiencies.
Season businesses really liked comp-time because it meant they could ramp up hours worked during peak business periods, and not have to lay-off workers in the slower periods because the workers converted the previous work hours into time-off with pay. It really was a win/win.
Against the backdrop of an anticipated exploding Trump economy hopefully this bill will pass the Senate and a new generation of young people and middle-class workers will be able to see the benefits such a system of pay options can provide.
Senator Elizabeth Warren is absolutely clueless on this issue. I’ll bet she doesn’t even know a single person in her life who ever used “compensatory time” because she’s surrounded by limo-liberals who are detached from common sense workers.