On May 2nd, the House passed a bill that is being called the Working Families Flexibility Act.
• The Goal: To present a new way for employees to compensate a heavy workweek with more time off in the future, rather than the extra overtime income during that pay period worked.
• Employee Choice: Employees who work for the private sector will have a choice between saving “comp time” to use as vacation time later, or being paid overtime pay during that pay period worked.
• How many hours can an employee save? Employees could save as much as 160 hours (about one month’s worth) of paid time off. At the end of the year, the employer would pay them for any time off they don’t use.
Advantage to Employee: Gives them the option to make their own decision on money vs. time.
Disadvantage to Employee: If they bank these hours and don’t use them, they’re paid at the end of the year and need to wait for that payment.
Advantage to Employer: If they pay out later in the year, it saves cash flow and they don’t need to pay for those hours immediately.
Disadvantage to Employer: They may have to pay out a larger sum at the end of the year. Employees may pile up lots of overtime that the employer will need to be prepared for (though employer still has final say on when time off is approved).
• Who’s forced to do what?
Employees: There is nothing in the bill that forces the employee to do anything. House Rep. Martha Roby said “Employees would not be forced to take time off if they prefer to cash in a bigger paycheck”
Employers: There is nothing in the bill that forces the employer to participate in the program. They can continue to pay overtime and not provide an option to bank future vacation hours.
• Any concerns about the change? The law is not final as of now, but if it does become final the concern would be employers trying to abuse this. They could provide options to their employees, but try to force them to bank the hours for a “free loan” essentially. Details on how the law will protect employees under this circumstance are still unclear.
• TLC’s (Soon to be Journey Payroll) Stance: We don’t take a stand on political issues, silly. We provide the facts and help our clients through laws and regulations for whatever comes down the pipeline. We stand with our clients, not a political party.
• Next Steps: The bill will now go to the Senate where if it passes it will become a law.
You can count on Journey Employer Solutions to keep you informed!