[House Report 108-127]
[From the U.S. Government Publishing Office]



108th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    108-127
======================================================================
 
                      FAMILY TIME FLEXIBILITY ACT

                                _______
                                

  May 22, 2003.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Boehner, from the Committee on Education and the Workforce, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 1119]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 1119) to amend the Fair Labor Standards 
Act of 1938 to provide compensatory time for employees in the 
private sector, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                                Purpose

    The purpose of H.R. 1119, the Family Time Flexibility Act, 
is to amend the Fair Labor Standards Act of 1938 to allow 
compensatory time for all employees.

                            Committee Action


104th Congress

    The Committee's consideration of allowing compensatory time 
for private sector employees began during the 104th Congress. 
As part of a series of oversight hearings on the Fair Labor 
Standards Act, the Subcommittee on Workforce Protections held a 
hearing on June 8, 1995, on amending the Fair Labor Standards 
Act to provide private sector employers with the option of 
allowing employees to voluntarily choose to take paid 
compensatory time off in lieu of overtime pay. The following 
individuals testified at the hearing: Ms. Arlyce Robinson, 
Administrative Support Coordinator, Computer Sciences 
Corporation, Falls Church, Virginia; Ms. Kathleen M. Fairall, 
Senior Human Resource Representative, Timken Company, Randolph 
County, North Carolina; Ms. Sandie Moneypenny, Process 
Technician, Timken Company, Randolph County, North Carolina; 
Dr. M. Edith Rasell, Economist, Economic Policy Institute, 
Washington, D.C.; and Mr. Michael T. Leibig, Attorney-at-Law, 
Zwerdling, Paul, Leibig, Kahn, Thompson & Wolly, P.C., Fairfax, 
Virginia.
    On November 1, 1995, the Subcommittee on Workforce 
Protections held a hearing on H.R. 2391, a bill introduced by 
Representative Cass Ballenger to amend the Fair Labor Standards 
Act to allow compensatory time for all employees. The following 
witnesses testified on H.R. 2391: Mr. Pete Peterson, Senior 
Vice President of Personnel, Hewlett-Packard Company, Palo 
Alto, California; Ms. Debbie McKay, Administrative Specialist, 
PRC, Inc., McLean, Virginia; and Mr. Michael T. Leibig, 
Attorney-at-Law, Zwerdling, Paul, Leibig, Kahn, Thompson & 
Wolly, P.C., Fairfax, Virginia.
    On December 13, 1995, the Subcommittee on Workforce 
Protections approved H.R. 2391, as amended, by voice vote, and 
ordered the bill favorably reported to the Full Committee. On 
June 26, 1996, the Committee on Economic and Educational 
Opportunities approved H.R. 2391, as amended, by voice vote, 
and ordered the bill favorably reported by a rollcall vote of 
20 yeas and 16 nays. H.R. 2391 was passed by the House, as 
amended, on July 30, 1996 by a rollcall vote of 225 yeas to 195 
nays, but was not acted on by the Senate prior to the 
adjournment of the 104th Congress.

105th Congress

    On January 7, 1997, Representative Cass Ballenger 
introduced H.R. 1, the Working Families Flexibility Act, with 
40 original cosponsors. The Subcommittee on Workforce 
Protections held a hearing on H.R. 1 on February 5, 1997. The 
following individuals testified at the hearing: the Honorable 
Kay Granger, Member of Congress representing the 12th district 
of Texas; the Honorable Tillie Fowler, Member of Congress 
representing the 4th district of Florida; the Honorable Sue 
Myrick, Member of Congress representing the 9th district of 
North Carolina; Ms. Christine Korzendorfer, Manassas, Virginia; 
Mr. Peter Faust, Clear Lake, Iowa; Ms. Linda M. Smith, Miami, 
Florida; Dr. Roosevelt Thomas, Vice President of Human 
Resources and Affirmative Action at the University of Miami, 
testifying on behalf of the College and University Personnel 
Association, Washington, D.C.; Ms. Diana Furchtgott-Roth, 
Resident Fellow at the American Enterprise Institute for Public 
Policy Research, Washington, D.C.; Mr. Robert D. Weisman, 
Attorney-at-Law, Schottenstein, Zox, & Dunn, Columbus, Ohio; 
Mr. Russell Gunter, Attorney-at-Law, testifying on behalf of 
the Society for Human Resource Management (SHRM), Alexandria, 
Virginia; Ms. Karen Nussbaum, Director of the AFL-CIO Working 
Women's Project, Washington, D.C.; and Ms. Helen Norton, 
Director of Equal Opportunity Programs at the Women's Legal 
Defense Fund, Washington, D.C.
    On March 5, 1997, the Committee on Education and the 
Workforce discharged the Subcommittee on Workforce Protections 
from further consideration of the bill and favorably reported 
H.R. 1, as amended, by a rollcall vote of 23 yeas and 17 nays. 
H.R. 1 was passed by the House, as amended, on March 19, 1997 
by a rollcall vote of 222 yeas to 210 nays, but was not acted 
on by the Senate prior to the adjournment of the 105th 
Congress.

106th Congress

    On April 13, 1999, Representative Cass Ballenger introduced 
H.R. 1380, the Working Families Flexibility Act, which was 
identical to H.R. 1 as passed by the House during the 105th 
Congress. The bill was referred to the Committee on Education 
and the Workforce; however, there was no action taken on the 
legislation.

107th Congress

    On May 24, 2001, Representative Judy Biggert introduced 
H.R. 1982, the Working Families Flexibility Act, with 33 
original cosponsors. The bill was identical to H.R. 1 as passed 
by the House during the 105th Congress. While there was no 
action taken on H.R. 1982, the Subcommittee on Workforce 
Protections held two hearings focusing on the issue of 
increasing workplace flexibility under the Fair Labor Standards 
Act of 1938.
    On March 6, 2002, the following individuals testified 
before the Subcommittee on Workforce Protections: Mr. Ronald 
Bird, Chief Economist, Employment Policy Foundation, 
Washington, D.C.; Dr. Carl E. Van Horn, Professor and Director, 
John J. Heldrich Center for Workforce Development, Rutgers, the 
State University of New Jersey, New Brunswick, New Jersey; Mr. 
William J. Kilberg, Senior Partner, Gibson, Dunn & Crutcher, 
LLP, Washington, D.C., testifying on behalf of the U.S. Chamber 
of Commerce; and Ms. Judith M. Conti, Co-founder and Director, 
Legal Services and Administration, D.C. Employment Justice 
Center, Washington, D.C.
    On May 15, 2002, the following individuals testified before 
the Subcommittee on Workforce Protections: Mr. Donald J. 
Winstead, Acting Associate Director for Workforce Compensation 
and Performance, U.S. Office of Personnel Management, 
Washington, D.C.; Mr. Andy Brantley, Associate Vice President 
for Human Resources, University of Georgia, Athens, Georgia, 
testifying on behalf of the College and University Professional 
Association for Human Resources (CUPA--HR); Mr. Thomas M. 
Anderson, J.D., SPHR, Human Resources Director, Fort Bend 
County, Rosenberg, Texas, testifying on behalf of the Society 
for Human Resource Management (SHRM); and Mr. Dennis Slocumb, 
Executive Vice President and Legislative Director, the 
International Union of Police Associations (IUPA), AFL-CIO, 
Alexandria, Virginia.

108th Congress

    On March 6, 2003, Representative Judy Biggert introduced 
H.R. 1119, the Family Time Flexibility Act, with 72 original 
cosponsors. The provisions in the Family Time Flexibility Act 
were identical to the provisions of H.R. 1, as passed by the 
House during the 105th Congress.
    The Subcommittee on Workforce Protections held one hearing 
on the legislation on March 12, 2003. The following individuals 
testified at the hearing: Mr. Houston L. Williams, Chairman and 
CEO, PNS, Inc., San Jose, California, testifying on behalf of 
the U.S. Chamber of Commerce; Ms. Terri Martell, Electrician, 
Eastman Kodak Company, Wayland, New York; Ms. Ellen Bravo, 
National Director, Nine to Five: National Association of 
Working Women, Milwaukee, Wisconsin; and Mr. John A. Dantico, 
SPHR, CCP, Principal of Compensation/HR Consulting for the HR 
Group, Northbrook, Illinois, testifying on behalf of the 
Society for Human Resource Management (SHRM).
    On April 3, 2003, the Subcommittee on Workforce Protections 
favorably reported H.R. 1119, without amendment, to the Full 
Committee by a rollcall vote of 8 yeas and 6 nays. On April 9, 
2003, the Committee on Education and the Workforce approved 
H.R. 1119, without amendment, and ordered the bill favorably 
reported to the House by a rollcall vote of 27 yeas and 22 
nays.

                     Committee Statement and Views


Background

    The Fair Labor Standards Act (FLSA) \1\ was enacted in 
1938. Among its provisions is the requirement that hours of 
work by ``non-exempt employees'' beyond 40 hours in a seven day 
period must be compensated at a rate of one-and-one-half times 
the employee's regular rate of pay.\2\ Certain exceptions to 
the ``40 hour work week'' are permitted, under sections 7 and 
13 of the FLSA,\3\ for a variety of specific types and places 
of employment whose circumstances have led Congress, over the 
years, to enact specific provisions regarding maximum hours of 
work for those types of employment. In addition, the ``overtime 
pay'' requirement does not apply to employees who are exempt as 
``executive, administrative, or professional'' employees.\4\
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    \1\ 29 U.S.C. Sec. 201-219.
    \2\ 29 U.S.C. Sec. 207.
    \3\ 29 U.S.C. Sec. Sec. 207, 213.
    \4\ 29 U.S.C. Sec. 213.
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    Under the overtime pay requirement in the FLSA, overtime 
pay for employees in the private sector must be in the form of 
cash wages paid to the employee in the employee's next 
paycheck. This is contrary to the overtime pay provision for 
employees in the public sector. Section 7(o) of the FLSA \5\ 
provides that public agencies may provide paid compensatory 
time off in lieu of overtime compensation, so long as the 
employee or his or her collective bargaining representative has 
agreed to this arrangement and the compensatory time off is 
given at a rate of not less than one-and-one-half hours for 
each hour of employment for which overtime compensation is 
required.
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    \5\ 29 U.S.C. Sec. 207(o).
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    The difference in treatment between the private and public 
sectors under the FLSA is explained by the fact that the 
provisions applying the FLSA to the public sector were added in 
1985 and therefore included a recognition that the workplace 
and work force had changed greatly since the 1930s when the 
private sector provision was written.\6\ In 1985, Congress 
recognized that changes in the work force and the workplace had 
led many employers in the public sector to make compensatory 
time available and for their employees to choose compensatory 
time. As the Senate Labor Committee explained in including 
compensatory time for the public sector in the 1985 amendments:
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    \6\ The changes to the FLSA authorizing compensatory time for 
public employees generally were preceded by legislation authorizing 
greater flexibility for federal employees. The Federal Employees 
Flexible and Compressed Work Schedules Act was passed in 1978, 
reauthorized in 1985, and made permanent in 1985.

          The Committee also is cognizant that many state and 
        local government employers and their employees 
        voluntarily have worked out arrangements providing for 
        compensatory time off in lieu of pay for hours worked 
        beyond the normally scheduled workweek. These 
        arrangements-frequently the result of collective 
        bargaining--reflect mutually satisfactory solutions 
        that are both fiscally and socially responsible. To the 
        extent practicable, we wish to accommodate such 
        arrangements.\7\
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    \7\ Report on S. 1570, Committee on Labor and Human Resources, U.S. 
Senate, 99th Congress, First Session, Senate Report No. 99-159, p. 8.

    The Committee is certain that paid compensatory time off in 
lieu of overtime pay for hours worked beyond 40 in a week can 
provide ``mutually satisfactory solutions'' in the private 
sector no less than is the case in the public sector. The 
Committee has heard compelling testimony over the past several 
years from individuals who are covered by the overtime 
protections of the FLSA and who believe that a change in the 
law to allow paid compensatory time would be of great benefit 
to them.
    Ms. Arlyce Robinson, an Administrative Support Coordinator 
for Computer Services Corporation and an hourly non-exempt 
employee, described to the Subcommittee on Workforce 
Protections how she would like to be able to use compensatory 
time:

          I am here this morning to share with you my feelings 
        about the impact of a law that was created over 50 
        years ago to protect many of us in the workplace, the 
        Fair Labor Standards Act. I know that under this law, 
        as a non-exempt employee I am eligible for overtime if 
        I work more than 40 hours in a work week. And, while I 
        never turned down an opportunity to earn more money, 
        there have been times when I would have gladly given up 
        the additional pay to enjoy flexibility in planning my 
        work schedule, the same flexibility that my exempt 
        colleagues have had for some time. Let me give you an 
        example.
          In a few months, as all of you know, the weather 
        around Washington DC will become much colder. We are 
        likely to see some snow and ice. And if we have a 
        winter like the one we had two years ago, we will 
        likely see a great deal of snow and ice. If it snows on 
        a Monday or Tuesday--at the beginning of my workweek--
        and I can't get to work on one of those days, I know 
        that I can make up the hours that I missed by working 
        extra hours later in that same week--say on Thursday or 
        Friday. However, if it snows at the end of my workweek, 
        we have a different issue. Although my company would 
        like to allow me to make up the work during the 
        following workweek, the fact is that they can't allow 
        it without incurring additional costs. You see, if I 
        only worked 4 eight hour days--or 32 hours--the first 
        week, I would have to work 48 hours the following week 
        in order to have a full 80 hour paycheck for the two 
        week period. But right now under the Fair Labor 
        Standards Act, each one of the 8 hours worked over 40 
        in the second week would have to be paid on an overtime 
        basis. That's just too expensive for my company, given 
        the number of non-exempt employees that we have. So 
        since I can't make up the time in the second week, I 
        have to take vacation leave which keeps my paycheck 
        whole but gives me less vacation to use later--when I 
        would like to use it. My only other alternative is to 
        take leave without pay, which keeps my vacation intact, 
        but results in my losing money in my paycheck. And I do 
        need my paycheck!!
          * * * For the first 20 years of my career, I worked 
        in the public sector as a secretary and as an 
        administrative assistant in the DC public school system 
        and for the DC Office of Personnel. When I worked for 
        these agencies, I was able to earn and use compensatory 
        time. I can't earn that now * * * This lack of 
        flexibility is especially difficult for parents of 
        young children, both mothers and fathers, and, 
        particularly, for single parents. Doctor appointments 
        and school conferences can often only be scheduled 
        during work hours. For non-exempt employees, this often 
        means having to take sick leave or vacation leave to 
        have a few hours off to take care of family 
        responsibilities.\8\
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    \8\ Hearings on the Fair Labor Standards Act before the 
Subcommittee on Workforce Protections, Committee on Economic and 
Educational Opportunities, U.S. House of Representatives, 104th 
Congress, First Session, Serial No. 104-46, pp. 180-181.

    Ms. Sandie Moneypenny, a process technician for Timken 
Company and an hourly non-exempt employee, described how having 
the option of choosing compensatory time could help her as a 
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working mother:

          Compensatory time off for a working mother like 
        myself would be very helpful. If I had to leave work 
        because of a sick child, wanted to attend a teachers 
        conference, needed to take my child to the dentist or 
        just wanted time off to be with my family, I would have 
        the option without it affecting my pay.
          Today I can only use compensatory time in the week it 
        occurs, but as most of you know, life doesn't seem to 
        work that way. If I could bank my overtime, I wouldn't 
        have to worry about missing work if my child gets sick 
        on Monday or Tuesday. I also would only be postponing 
        valuable time off with my family when I have a busy 
        work week, because I could always take the time off at 
        a later date.\9\
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    \9\ Id., p. 186.

    Ms. Deborah McKay, an Administrative Specialist, with PRC, 
Inc. testified about why she would like to have the option of 
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selecting compensatory time in lieu of cash overtime:

          Under this proposal, an employee would be given the 
        option to use overtime compensatory time at a later 
        date when these family emergency type situations occur. 
        Personally, I would find this time useful in working on 
        term papers and projects for school as well as waiting 
        for the repairman. There is nothing more frustrating 
        than having to take a whole day of leave to have a 
        scheduled repairman show up--supposed to show up at 9 
        a.m. and then not show up until 3 or 4 in the 
        afternoon. * * *
          * * * [W]hat I am recommending is simple * * * [H]ave 
        the FLSA amended by giving non-exempt and exempt 
        employees the option of time and a half pay or time and 
        a half of equal value off.\10\
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    \10\ Id., pp. 416-417.

    Mr. Peter Faust of Clear Lake, Iowa, an hourly employee at 
a nonprofit facility for individuals who are mentally and/or 
physically disabled, related the difficulty that he and his 
wife have when struggling to balance family responsibilities 
with work schedules and the importance that additional time off 
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would have for him and his coworkers:

          This amendment is a win-win for working families and 
        employers * * * Everyone I've talked to, without 
        exception, would like the choice of getting overtime or 
        comp time, and almost everyone I've asked preferred 
        comp time rather than overtime. * * *
          There are a lot of ways to make money in this country 
        and lots of ways to spend it, but there's only one way 
        to spend time with yourself, family or friends, and 
        that's to have the time to spend.
          In this country of choice, can the working families 
        have a choice? Some already do. Federal employees have 
        had the choice to save comp time since 1978. State and 
        local employees can save it too. Does our government 
        value the private working families in this country 
        enough to give us the same choice? \11\
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    \11\ Hearing on H.R. 1, the working Families Flexibility Act, 
before the Subcommittee on workforce Protections, Committee on 
Education and the Workforce, U.S. House of Representatives, 105th 
Congress, First Session, February 5, 1997, Serial No. 105-1, pp. 17-18.

    Ms. Linda M. Smith, a medical staff credentialing 
coordinator and secretary at the Bascom Palmer Eye Institute in 
Miami, Florida, expressed her ``wholehearted support'' for the 
development of a program which would enable her to have the 
---------------------------------------------------------------------------
option of comp time:

          With the implementation of the banked comp time 
        program, I could use my overtime hours to create time 
        for pregnancy leave for a second child, furthering my 
        education, taking care of a debilitated parent, or, 
        closest to my heart, creating special days with my 
        daughter. A goal of mine is to obtain my degree. My 
        employer allows me to take one class during working 
        hours, without pay. With accrued comp time, I could 
        take the class during working hours, with pay. Accrued 
        comp time would also allow me to take time off for 
        doctors' appointments, teachers conferences, or to care 
        for a sick child without having to use accrued sick 
        time. In this way, sick time could be saved for 
        catastrophic or long-term illnesses.\12\
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    \12\ Id., p. 22.

    Ms. Christine Korzendorfer, an hourly employee with TRW in 
Manassas, Virginia, told the Subcommittee how important it 
would be for her to be able to have the choice between 
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compensatory time and overtime wages:

          This schedule as a hourly employee provides me with a 
        lot of overtime pay. This pay is important to me. 
        However, the time with my family is more important. If 
        I had a choice there are times when I would prefer to 
        take comp time in lieu of overtime. What makes this 
        idea appealing is that I would have a choice with the 
        legislation you are considering.
          Just recently, my son was ill and I had to stay at 
        home with him. I took a day of vacation which I would 
        have preferred to use for vacation! But I did not want 
        to take unpaid leave. * * * If I had the choice, I 
        would have used comp time in lieu of overtime for that 
        day off from work. Besides, I would have only had to 
        use about five and one-half hours of comp time to cover 
        that eight hour day.\13\
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    \13\ Id., pp. 10-11.

    Ms. Terri Martell, an electrician with the Eastman Kodak 
Company in New York, told the Subcommittee about the increased 
flexibility that compensatory time would provide to her and her 
---------------------------------------------------------------------------
co-workers:

          Another example of needing flexibility with overtime 
        pay and how it is paid is when the children are sick. I 
        remember when my 10-year old Eric was born, I used up 
        eleven of my twenty vacation days to stay home with him 
        or take him to the doctor just that first year. Being a 
        first time mom and needing to nurture him while he was 
        sick was very important to him and to me. As a working 
        mother, it is very stressful to be at work when your 
        children are in someone else's care. In 1993, I could 
        have used that [comp] time during those emergencies.
          I have heard from co-workers who feel strongly about 
        the need for the more flexible schedules--the kind that 
        comp time would allow. These are employees who are 
        caregivers of their aging parents. One colleague in 
        particular told me of her need to balance work and 
        family. For her, comp time would mean allowing more 
        flexibility in spending more time with her ill parent. 
        The ability to save overtime as comp time and use it in 
        times of need is crucial when crisis occurs but also to 
        cope with day-to-day challenges. Also, someone who has 
        used up annual vacation hours may have a need for extra 
        time later in the year. Banking comp time could offer 
        options instead of requiring employees to choose 
        between working and taking time off without pay to 
        address family needs.\14\
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    \14\ Hearing on H.R. 1119, the Family Time Flexibility Act, before 
the Subcommittee on Workforce Protections, Committee on Education and 
the Workforce, U.S. House of Representatives, 108th Congress, First 
Session, March 12, 2003, (to be published).

    Ironically, employees who are classified as exempt under 
the FLSA are not so restricted by law and often are permitted 
by their employers to have much more flexibility in their 
schedules than non-exempt employees. But for non-exempt 
employees, the law has denied them the flexibility that they 
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need and want. As Ms. Robinson summarized it:

          While the law was intended to protect us--and maybe 
        50 years ago it did--in today's business world it has 
        had the effect of creating the illusion of two classes 
        of workers. The term non-exempt is often misinterpreted 
        to mean ``less than professional.''\15\
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    \15\ Hearings on the Fair Labor Standards Act before the 
Subcommittee on Workforce Protections, Committee on Economic and 
Educational Opportunities, U.S. House of Representatives, 104th 
Congress, First Session, Serial No. 104-46, p. 181.

    There is ample support for concluding that Ms. Robinson, 
Ms. Moneypenny, Ms. McKay, Mr. Faust, Ms. Smith, Ms. 
Korzendorfer, and Ms. Martell are not alone in wanting the 
increased flexibility that would be provided by the Family Time 
Flexibility Act. As Dr. Carl E. Van Horn, Professor and 
Director of the John J. Heldrich Center for Workforce 
---------------------------------------------------------------------------
Development at Rutgers University told the Subcommittee:

          Almost all Americans are deeply concerned about 
        balancing work and family, yet our data consistently 
        show over the years that only half of U.S. workers feel 
        that they are satisfied with how that is working out. 
        Workers rate the ability to balance work and family as 
        the most important aspect of their job. Ninety-seven 
        percent * * * said this is the most important issue. 
        They rate this higher than job security, salary, 
        quality of working environment, and relationships with 
        co-workers.\16\
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    \16\ Hearings on the Fair Labor Standards Act before the 
Subcommittee on Workforce Protections, Committee on Education and the 
Workforce, U.S. House of Representatives, 107th Congress, Second 
Session, Serial No. 107-48, p. 8.

---------------------------------------------------------------------------
    As Ms. Martell put it most simply:

          Today in my private sector job, I am not given the 
        choice of paid time off instead of paid overtime 
        compensation. The compensation I receive now is only of 
        monetary value. Money is very important and the main 
        reason I work. But money does not solve all the needs 
        of my children. If I were given the choice to take paid 
        overtime, I could do so for my family when I want or 
        need to take time. I might then be able to make up some 
        of those lost ``family time days,'' or care for my sick 
        child or parent. The decision to permit comp time 
        instead of overtime pay should be left to me and my 
        employer to decide--not the federal government.\17\
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    \17\ Hearing on H.R. 1119, the Family Time Flexibility Act, before 
the Subcommittee on Workforce Protections, Committee on Education and 
the Workforce, U.S. House of Representatives, 108th Congress, First 
Session, March 12, 2003, (to be published).
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                            Committee Views

    H.R. 1119 amends the FLSA to permit employers in the 
private sector to offer their employees the voluntary option to 
receive overtime pay in the form of paid compensatory time in 
lieu of cash wages. The legislation does not change the 
employer's obligation to pay overtime at the rate of one-and-
one-half times the employee's regular rate of pay for any hours 
worked over 40 in a seven day period. The bill simply allows 
overtime compensation to be given in the form of paid 
compensatory time off, at the rate of one-and-one-half hours of 
compensatory time for each hour of overtime worked, and only if 
the employee and employer agree on that form of overtime 
compensation. As is the case where compensatory time is already 
used in the public sector, the employee would be paid, at the 
employee's regular hourly rate of pay, when the compensatory 
time is used.
    H.R. 1119 would not alter current public sector use of 
compensatory time in any way. Rather, the legislation seeks to 
extend the option of paid compensatory time in lieu of overtime 
compensation to private sector employees, which is the same 
option that federal, state, and local government employees have 
had for many years under the FLSA, and which private sector 
employees overwhelmingly support. The legislation includes 
numerous protections for employees to assure that employees' 
choice and use of compensatory time is voluntary. Compensatory 
time, as provided in H.R. 1119, is not a mandate on employers 
or employees. H.R. 1119 simply gives employees and employers 
the opportunity to agree to this arrangement, an opportunity 
which is now denied to them by law.

Agreement

    Under H.R. 1119, an employer and employee must reach an 
express mutual agreement that overtime compensation will be in 
the form of paid compensatory time. If either the employee or 
the employer does not so agree, then the overtime pay must be 
in the form of cash compensation.
    The agreement between the employer and employee must be 
reached prior to the performance of the work for which the 
compensatory time off would be given. The agreement may be 
specific as to each hour of overtime, or it may be a blanket 
agreement covering overtime worked within a set period of time.
    The bill allows two types of employer-employee agreements 
on compensatory time. Where the employee is represented by a 
recognized or certified labor organization, the agreement must 
be in the collective bargaining agreement between the employer 
and the recognized or certified labor organization. By 
referring to a labor organization which has been recognized or 
certified under applicable law, H.R. 1119 includes any law 
providing for recognition or certification of labor 
organizations representing private sector workers in collective 
bargaining, including, at the federal level, the National Labor 
Relations Act and the Railway Labor Act.
    Where the employees are not represented by a recognized or 
certified labor organization, the agreement must be made 
between the employer and the individual employee. The bill 
specifies that any such agreement between the employer and an 
individual employee must be entered into knowingly and 
voluntarily by the employee, and may not be a condition of 
employment.
    In order to be eligible to choose compensatory time, an 
employee must have worked at least 1000 hours in a period of 
continuous employment with the employer during the 12-month 
period preceding the date that the employee agrees to receive 
or receives compensatory time. Under the language of the bill, 
this 1000 hour requirement is assessed on a ``rolling'' basis, 
such that to be eligible to enter an agreement to receive 
compensatory time, or to actually receive such time in lieu of 
cash compensation for overtime, an employee must have worked at 
least 1000 hours in a period of continuous employment with the 
employer in the 12-month period prior to either entering such 
an agreement or actually receiving compensatory time. The 
Committee expects that the phrase ``period of continuous 
employment with the employer'' will be construed to encompass 
an unbroken period of time in which an employee is maintained 
on the payroll of a single employer (or, as applicable, its 
successor) on active status, or on inactive status where the 
employer has a reasonable expectation that the employee will 
return to duty (e.g., an employee on paid or unpaid leave whom 
the employer reasonably expects will return to duty will 
generally be considered to be in a ``period of continuous 
employment'' with that employer).
    The bill also requires that, with regard to agreements 
between employers and individual employees, the agreement on 
compensatory time between the employer and the employee must be 
affirmed in a written or otherwise verifiable statement. The 
latter is intended to allow computerized and other similar 
payroll systems to include this information, so long as the 
employee's agreement to take the overtime in the form of 
compensatory time is verifiable. The Committee does not intend 
that an agreement to take compensatory time could be purely 
oral with no contemporaneous record kept. To further assure 
that such agreements are authentic, H.R. 1119 provides that, 
pursuant to the general recordkeeping authority of the 
FLSA,\18\ the Secretary of Labor has authority to prescribe the 
information which the records of such agreement must include 
and the period of time the records should be maintained by the 
employer.
---------------------------------------------------------------------------
    \18\ 29 U.S.C. Sec. 211(c).
---------------------------------------------------------------------------
    The assurance that the individual employee's agreement to 
take compensatory time in lieu of cash overtime pay is 
voluntary is further protected by provisions in the bill which 
allow an employee who has entered into such an agreement to 
withdraw it at any time. Thus an employee who agrees that all 
or a portion of the overtime hours he or she works will be 
compensated in this form may at any point withdraw from that 
arrangement, in which case any subsequent hours of overtime 
worked by the employee must be compensated in the form of cash 
compensation.
    Just as is the case with compensatory time as it has been 
approved and operates in the public sector,\19\ H.R. 1119 does 
not require that the same agreement be entered with every 
employee, or that the employer agree to offer compensatory time 
to all employees. Opponents of compensatory time have claimed 
that this allows an employer to unfairly single out employees 
and to force them to take compensatory time in lieu of cash 
overtime against the employee's wishes. However, the bill's 
express prohibition on ``direct or indirect coercion'' and 
attempted coercion of employees (see discussion below) would 
prohibit an employer from conferring any benefit or 
compensation for the purpose of interfering with an employee's 
right to request or not request compensatory time. Thus, an 
employer may not single out employees for overtime work for the 
purpose of rewarding or punishing employees for their 
willingness or unwillingness to take compensatory time.\20\
---------------------------------------------------------------------------
    \19\ 29 C.F.R. Sec. 553.23(c).
    \20\ Obviously an employer also may not use any overtime policy, 
including compensatory time, to discriminate among employees for any 
reason prohibited by law. See testimony of Mr. Robert Weisman, Hearing 
on H.R. 1, the Working Families Flexibility Act before the Subcommittee 
on Workforce Protections, Committee on Education and the Workforce, 
U.S. House of Representatives, 105th Congress, First Session, February 
5, 1997.
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    The opponents of compensatory time have argued that 
compensatory time should be denied to everyone, but if it is 
allowed at all, then ``low-wage'' workers and certain 
occupations should be excluded. The Committee believes that the 
requirement for mutual agreement by the employer and the 
employee and the employee protections in the bill ensure that 
compensatory time is voluntary.
    Furthermore, there are a great many workers who likely 
would be included in a national definition of ``low wage'' who 
want to have the option of paid compensatory time--and who feel 
perfectly capable of making that decision themselves. Indeed, 
some of the most forceful and compelling testimony before the 
Subcommittee on Workforce Protections in support of allowing 
workers the option of paid compensatory time was given by a 
``low wage worker,'' Mr. Peter Faust, who likely would be 
denied that option if all such workers were excluded from H.R. 
1119.\21\ The Committee sees no reason to deny certain 
employees the option of compensatory time, based solely upon 
their level of income or their occupation.
---------------------------------------------------------------------------
    \21\ Testimony of Mr. Peter Faust, Hearing on H.R. 1, the Working 
Families Flexibility Act before the Subcommittee on Workforce 
Protections, Committee on Education and the Workforce, U.S. House of 
Representatives, 105th Congress, First Session, February 5, 1997.
---------------------------------------------------------------------------

Conditions on compensatory time

    The Committee intends that compensatory time be a matter of 
agreement between employers and employees and to that end, the 
law should permit employers and employees some flexibility in 
structuring compensatory time arrangements. H.R. 1119 provides 
certain parameters for such compensatory time arrangements, 
primarily in order to assure that employees are fully 
protected, which apply whether the compensatory time agreement 
is with a labor organization or with an individual employee 
(see discussion above). The agreement between the employer and 
employee may include other provisions governing the 
preservation, use or cashing out of compensatory time, so long 
as these provisions are consistent with the Family Time 
Flexibility Act. To the extent that any provision of an 
agreement is in violation of the Family Time Flexibility Act, 
the provision would be superseded by the requirement of the 
Act.\22\
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    \22\ This relationship between the agreement and the parameters 
stated in law is the same as applies to public sector compensatory 
time. See 29 C.F.R. Sec. 553.23(a)(2).
---------------------------------------------------------------------------
    H.R. 1119 provides that an employee may accrue no more than 
160 hours of compensatory time. This is in contrast to the 
public sector provisions in current law which allow most 
employees to accrue 240 hours of compensatory time. The lower 
limit for private sector employees is designed to protect both 
employers and employees against accrual of excessive amounts of 
compensatory time liability. The Committee emphasizes that this 
160-hour limit is the legal maximum that may be accrued. 
Employers may establish a lower limit for compensatory time 
accrual for their employees, and employees, of course, may 
agree to fewer hours of compensatory time, or decline 
compensatory time as the payment for overtime altogether.
    The bill also requires an annual ``cash out'' of all 
accrued compensatory time. Such annual cash out also protects 
both employers and employees against accrual of excessive 
amounts of compensatory time liability. Unless an alternative 
date is established by the employer, the annual cash out date 
is the end of the calendar year (December 31) and the employee 
must be paid for the accrued compensatory time not later than 
the following January 31. The employer may establish an 
alternative annual cash out date, in which case the employer 
must pay the employee for any accrued and unused compensatory 
time within 31 days of the end of the 12-month period. Subject 
to continued agreement between the employer and employee, the 
employee may begin to accrue compensatory time anew after the 
cash out date.
    An employer may cash out some accrued compensatory time 
more frequently than annually. However, the employer must 
provide an employee with 30 days notice prior to cashing out 
the employee's accrued, unused compensatory time, and may only 
cash out accrued compensatory time which is in excess of 80 
hours.
    An employee may also choose to cash out his or her accrued 
compensatory time at any time. The employee may submit a 
written request to such effect to the employer, upon which 
request the employer must cash out the employee's accrued 
compensatory time within 30 days of receiving the request. 
There is no hour limit on the employee's ability to cash out 
accrued compensatory time.
    As described above, an employee who has an individual 
agreement with the employer regarding compensatory time may 
withdraw that agreement at any time. Similarly, an employer who 
offers compensatory time to employees may discontinue such 
policy upon giving employees 30 days notice, except where a 
collective bargaining agreement provides otherwise. In the 
event an employer does discontinue offering compensatory time, 
any hours of compensatory time already accrued by employees 
remain the employees' hours and must be so recognized by the 
employer.
    The bill provides that upon the voluntary or involuntary 
termination of employment, an employee's unused compensatory 
time must be cashed out by the employer, and is to be treated 
as a wage payment due and owing the employee. The bill further 
provides that any payment owed to an employee or former 
employee (whether by operation of the annual cash out of all 
accrued compensatory time, because of the employee's request to 
cash out accrued compensatory time, because of the employer's 
decision to cash out certain accrued compensatory time as 
described above, or because of the voluntary or involuntary 
termination of employment) shall be considered unpaid overtime 
compensation to the employee. In addition to making explicit 
that the remedies for unpaid overtime compensation under the 
FLSA apply, this provision also assures that any unpaid, 
accrued compensatory time is treated as unpaid employee wages 
in the event of the employer's bankruptcy. Thus any unpaid, 
accrued compensatory time would have the same priority claim 
and legal status as other employee wages under both the FLSA 
and the Bankruptcy Code. As described above, the payment for 
accrued compensatory time is owed to the employee or former 
employee when the claim for payment is made, and takes the same 
priority as other wages of that date.
    In all cases in which accrued compensatory time is cashed 
out, the rate of cash out must be the employee's regular rate 
when the compensatory time was earned or the employee's current 
regular rate, whichever is higher. Thus, for example, if 
compensatory time is accrued during the course of a year and 
the employee has received an increase in his or her hourly rate 
during the year, the cash out rate at the end of the year would 
be the employee's final regular rate of pay for that year, 
reflecting the employee's increase in pay, even if the 
compensatory time was accrued prior to the pay increase.
    Opponents of H.R. 1119 have raised concerns that 
compensatory time would reduce an employee's pension benefits. 
These concerns are unfounded. The overtime hours for which the 
employee receives compensatory time are hours ``for which the 
employee is paid or entitled to pay for the performance of 
duties for the employer.'' They are therefore defined as 
``hours of service'' under the Employee Retirement Income 
Security Act (ERISA),\23\ for which the employee would be 
credited for purposes of accrual, participation, and vesting of 
benefits. Obviously in some cases the employee has also not 
worked hours that he or she otherwise would have when the 
employee uses (as compared to accrues) paid compensatory time. 
Thus the employee's total hours worked may be reduced, not by 
the earning of compensatory time but by substituting the paid 
compensatory time off for other hours of work. If as a result, 
the employee works less total hours, the employee's total 
monetary earnings and credits for benefits may be less. But 
that effect is no different than any other decision by the 
employee (for example, refusing optional overtime work) that 
reduces the total number of hours actually worked by the 
employee. Of course, employees who choose to take compensatory 
time off have gained an advantage which enables them to spend 
more paid time off with their family or for whatever purpose 
they wish, which is not available to employees who choose cash 
wages.
---------------------------------------------------------------------------
    \23\ C.F.R. Sec. 2530.200b-2.
---------------------------------------------------------------------------
    Similarly, opponents have raised concerns that compensatory 
time disadvantages an employee's eligibility for unemployment 
benefits, or the amount of unemployment benefits. H.R. 1119 
clearly treats compensatory time as employee wages and any 
payments for accrued compensatory time would be treated as are 
other employee wages under state laws, for purposes of 
eligibility for unemployment benefits and determination of the 
amount of benefits. Receipt of compensation for accrued 
compensatory time when an employee's employment is terminated 
may, depending on state law on ``disqualifying income,'' defer 
receipt of unemployment benefits but would not diminish the 
total benefits to which the employee may be entitled. 
Furthermore, to attempt to dictate that compensatory time 
payments should not considered in any unemployment benefit 
determination, as some have suggested, would be to turn 
existing federal policy on ``disqualifying income'' on its 
head, by dictating to the States how this form of employee 
wages should be treated and by dictating that these wages 
should not be considered as wages.
    Finally, H.R. 1119 requires the Secretary of Labor to 
revise the posting requirements under the regulations of the 
FLSA to reflect the compensatory time provisions of the bill. 
This will help to ensure that employees are informed of the 
circumstances under which compensatory time may be offered by 
an employer, the employees' right to accept or decline such 
offer, and the employees' rights regarding the use of 
compensatory time. The Secretary of Labor may, of course, 
promulgate such regulations as necessary in order to implement 
the provisions of H.R. 1119.

Employee use of accrued compensatory time

    Under H.R. 1119, an employee who has accrued compensatory 
time may generally use the time whenever he or she so desires. 
The only limitations which the bill puts on the use of 
compensatory time is that the employee's request to use 
compensatory time be made a reasonable time in advance of using 
it, and that the employer may deny the employee's request if 
the employee's use of the compensatory time would ``unduly 
disrupt'' the operations of the employer. It is the Committee's 
intent that an employer shall grant the employee's request to 
use accrued compensatory time on the date and/or time requested 
by the employee, if the use on such date and/or time does not 
``unduly disrupt'' the employer's operation, and if the 
employee has requested use of the accrued compensatory time 
within a reasonable period in advance of the date and/or time 
requested.
    These conditions on the use of accrued compensatory time 
are the same as those in current law which apply to 
compensatory time for public sector employees.\24\ Regulations 
issued by the Department of Labor define ``unduly disrupt'' as 
follows:
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    \24\ 29 U.S.C. Sec. 207(o).

          When an employer receives a request for compensatory 
        time off, it shall be honored unless to do so would be 
        ``unduly disruptive'' to the agency's operations. Mere 
        inconvenience to the employer is an insufficient basis 
        for denial of a request for compensatory time off. For 
        an agency to turn down a request from an employee for 
        compensatory time off requires that it should 
        reasonably and in good faith anticipate that it would 
        impose an unreasonable burden on the agency's ability 
        to provide services of acceptable quality and quantity 
        for the public during the time requested without the 
        use of the employee's services.\25\
---------------------------------------------------------------------------
    \25\ 29 C.F.R. Sec. 553.25.

    Court decisions regarding public sector compensatory time 
have also shown that the ``unduly disrupt'' standard is narrow 
and does not allow the employer to control the employee's use 
of compensatory time. In Heaton v. Missouri Department of 
Corrections, 43 F.3d 1176, 1180 (8th Cir. 1994), the Court of 
Appeals determined that banked compensatory time ``essentially 
is the property of the employee.'' The court held that the 
``unduly disrupt'' limitation on the employee's right to use 
compensatory time does not allow the employer to control the 
use of the employee's compensatory time or to force the 
employee to use compensatory time when the employee does not 
want to use it.
    Similarly, in Moreau v. Harris County, D.C. S. Tex., (No. 
H-94-1427, Nov. 25 1996) the District Court held that the 
employer's policy of forcing employees to use accrued 
compensatory time at the employer's convenience in order to 
reduce compensatory time balances was illegal. Regarding the 
employee's control of the use of accrued compensatory time, the 
Court said:

          A public employer may exercise control over an 
        employee's use of compensatory time only when the 
        employee's requested use of that time would disrupt the 
        employer's operations. An employee could attempt to 
        extort concessions from her employer by taking 
        compensatory time at a time when her presence is 
        critical to the operation, but no suggestion has been 
        made that the sheriff's office has been the victim of 
        abusive workers * * * Although an employer may 
        establish reasonable restrictions on vacations, sick 
        leave, and other time-off forms of compensation, it 
        cannot evade its statutory obligation for extra pay for 
        overtime work, even when the statute allows the extra 
        pay to be in the form of time off. Compensatory time is 
        far less amenable to management adjustment than the 
        others because the time off is in place of cash pay 
        required by statute.

    Finally, the Committee notes that the ``unduly disrupt'' 
standard contained in H.R. 1119 is similar to the standard 
employed under the Family Medical Leave Act that limits an 
employee's right to take leave for medical treatments for the 
employee or a member of his or her family (``* * * the employee 
shall make a reasonable effort to schedule the treatment so as 
not to disrupt unduly the operations of the employer * * 
*'').\26\
---------------------------------------------------------------------------
    \26\ 29 U.S.C. Sec. 2612(e). As one district court recently said in 
construing these provisions of the Family and Medical Leave Act, ``The 
FMLA also does not give employees the unfettered right to take time off 
subject only to their own convenience without any consideration of its 
effect upon the employer.'' Kaylor v. Fannin Regional Hospital, 946 
F.Supp. 988, 999 (N.D. Ga. 1996).
---------------------------------------------------------------------------
    Given the long history of this language in the FLSA with 
regard to compensatory time in the public sector and the 
adoption of similar language in the Family and Medical Leave 
Act, it is simply dishonest for the opponents of private sector 
use of compensatory time to claim that H.R. 1119 allows the 
employer to control when compensatory time is used. The 
employer's right to deny compensatory time off under H.R. 1119 
is very limited. But the employer must have some ability to 
maintain the operations of the business. If that is not 
recognized in the law, then no employer will ever offer 
compensatory time as an option for employees and the 
Committee's efforts to respond to employees' desires to have 
this flexibility will be of no effect. Furthermore, providing a 
right to an employee to use compensatory time without any 
regard to workload or business demands is simply unfair to 
coworkers, who in many cases would have to handle the workload 
of the absent employee. Just as was the case in 1985 when 
workers in the public sector were allowed to use compensatory 
time, the Committee bill seeks ``to balance the employee's 
right to make use of comp time that has been earned and the 
employer's need for flexibility in operations.'' \27\
---------------------------------------------------------------------------
    \27\ Report on S. 1570, Committee on Labor and Human Resources, 
U.S. Senate, 99th Congress, First Session, Senate Report No. 99-159, p. 
11.
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Enforcement and remedies

    As an amendment to the FLSA, the compensatory time 
provisions in H.R. 1119 would be subject to the applicable 
enforcement and remedies of the FLSA. Section 15(a)(2) of the 
FLSA makes it unlawful for any person to violate any provision 
of section 7,\28\ of which the compensatory time provisions of 
H.R. 1119 would be a part. In addition, section 15(a)(3) makes 
it unlawful to ``discharge or in any other manner discriminate 
against any employee because such employee has filed any 
complaint or instituted or caused to be instituted any 
proceeding under or related to'' the employee's rights under 
the FLSA.\29\
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    \28\ 29 U.S.C. Sec. 215(a)(2).
    \29\ 29 U.S.C. Sec. 215(a)(3).
---------------------------------------------------------------------------
    Section 16(b) of the FLSA authorizes an action by an 
employee against his or her employer for any violations of 
section 7.\30\ The suit may be filed in any federal or state 
court. An employee may also file a complaint with the U.S. 
Department of Labor. The Department of Labor generally attempts 
to resolve such complaints; however, the Department of Labor 
may also sue the employer for damages on behalf of the employee 
or employees whose rights were violated, or may also seek 
injunctive relief.\31\ Section 16(e) \32\ also authorizes the 
Secretary of Labor to seek civil penalties of up to $1,000 per 
violation against an employer who ``willfully or repeatedly'' 
violates section 7. In any action in which the employee has 
been wrongfully denied overtime compensation, the FLSA 
authorizes damages equal to the amount of the unpaid 
compensation required by the FLSA and an equal amount as 
liquidated damages; \33\ liquidated damages may be reduced or 
eliminated if the court finds that the employer acted in good 
faith and had reasonable grounds for believing that he or she 
was in compliance with the FLSA.\34\ In any action brought by 
an employee, the employee may also be paid for his or her 
attorney's fees and costs.\35\
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    \30\ 29 U.S.C. Sec. 216(b).
    \31\ 29 U.S.C. Sec. 217.
    \32\ 29 U.S.C. Sec. 216(e).
    \33\ 29 U.S.C. Sec. 216(b).
    \34\ 29 U.S.C. Sec. 260.
    \35\ 29 U.S.C. Sec. 216(b).
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    In short, H.R. 1119 maintains and applies all of the 
protections in current law to employees choosing to opt for 
compensatory time. Moreover, H.R. 1119 adds a prohibition to 
those already applicable under the FLSA. The bill prohibits an 
employer from directly or indirectly intimidating, threatening, 
coercing, or attempting to intimidate, threaten, or coerce any 
employee for purposes of interfering with the employee's right 
to take or not take compensatory time in lieu of cash overtime, 
or to use accrued compensatory time. Opponents of compensatory 
time have claimed that H.R. 1119 would allow employers to force 
employees to take compensatory time against their will or to 
use accrued compensatory time at the employer's convenience. 
Those claims are contrary to the plain language of the bill.
    The language of H.R. 1119 prohibiting intimidation, threats 
and coercion, or attempts thereto, is identical to prohibitory 
language protecting federal employees under the Family and 
Medical Leave Act,\36\ and the Federal Employees Flexible and 
Compressed Work Schedules Act.\37\ The term ``intimidate, 
threaten, or coerce'' has been defined under those laws as 
``promising to confer or conferring any benefit (such as 
appointment, promotion, or compensation), or taking or 
threatening to take any reprisal (such as deprivation of 
appointment, promotion, or compensation).'' \38\ Thus, H.R. 
1119 prohibits an employer, for example, from forcing employees 
to take compensatory time in lieu of monetary compensation by 
offering overtime hours only to employees who ask for 
compensation in the form of compensatory time.
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    \36\ 5 U.S.C. Sec. 6385.
    \37\ 5 U.S.C. Sec. 6132.
    \38\ 5 U.S.C. Sec. 6385.
---------------------------------------------------------------------------
    The bill also creates a new remedy under the FLSA for 
employers who violate the anti-coercion language just 
described. Section 3 of H.R. 1119 provides that an employer who 
violates the anti-coercion provision shall be liable to the 
employee for the employee's rate of compensation for each hour 
of compensatory time and an equal amount as liquidated damages. 
If the employee has already used some or all of the 
compensatory time, the amount to be paid as damages is reduced 
by that amount.
    Opponents of compensatory time have claimed that, while it 
may be prohibited conduct under H.R. 1119, there is no sanction 
in H.R. 1119 for an employer who either forces an employee to 
take compensatory time or denies the employee the right to use 
accrued compensatory time. In both cases they are wrong. An 
employee who is forced to take compensatory time may receive 
the amount of the employee's compensation for each hour of 
compensatory time plus an equal amount of liquidated damages, 
less the amount of compensation the employee has already 
received for those hours of compensatory time. Similarly, where 
an employee has been wrongfully denied use of accrued 
compensatory time, the employee or the Department of Labor may 
if necessary, seek injunctive relief and the employer who 
refuses to comply may be subject to civil penalties. The 
Committee expects that the Department will make use of the 
regulatory process to clarify the application of the remedies 
provisions contained in H.R. 1119 to these and other potential 
scenarios.
    In addition, there is a ``self-policing'' aspect: the 
employee retains his or her compensation and can demand to cash 
out at the employee's current rate of pay or the rate when the 
time was earned, whichever is higher. In short, the employer 
does not benefit by denying the employee the use of his or her 
compensatory time, and where necessary, there are effective 
sanctions under the bill and the FLSA for employees who violate 
the employee protections and other provisions of H.R. 1119.

                                Summary

    H.R. 1119 would give private sector employers and employees 
an option under the Fair Labor Standards Act which federal, 
state, and local governments have had for many years. H.R. 1119 
would not affect the compensatory time provisions already 
applicable to employees of federal, state and local 
governments. The bill would permit private sector employers to 
offer their employees the option of selecting paid compensatory 
time off in lieu of receiving cash overtime wages. Employees 
would be able to choose, based upon an agreement with the 
employer, to have their overtime compensated with paid time 
off.
    The bill would not change the 40-hour work week to affect 
the manner in which overtime is calculated. ``Non-exempt'' 
employees who work more than 40 hours within a seven day period 
would continue to receive overtime compensation at a rate not 
less than one and one-half times the employee's regular rate of 
pay. If the employer and the employee agree on compensatory 
time, then the paid time off would be granted at the rate of 
not less than one and one-half hours for each hour of overtime 
worked.
    H.R. 1119 would provide new employee protections, in 
addition to those contained in current law, in order to protect 
against the coercive use of compensatory time. The bill 
requires any arrangement for the use of paid compensatory time 
to be an express mutual agreement between the employer and the 
employee. In the case of employees who are represented by a 
recognized or certified labor organization, the agreement must 
be between the employer and the labor organization. In other 
cases, the agreement is with the individual employee, and must 
be entered into knowingly and voluntarily by the employee, and 
may not be a condition of employment.
    In order to be eligible to choose compensatory time, an 
employee must have worked at least 1,000 hours in a period of 
continuous employment with the employer during the 12-month 
period preceding the date that the employee agrees to receive 
or receives compensatory time off. Under the language of the 
bill, this 1,000 hour requirement is assessed on a ``rolling'' 
basis, such that to be eligible to enter an agreement to 
receive compensatory time, or to actually receive such time in 
lieu of cash compensation for overtime, an employee must have 
worked at least 1,000 hours in a period of continuous 
employment with the employer in the 12 month period prior to 
either entering such an agreement or actually receiving 
compensatory time. The Committee expects that the phrase 
``period of continuous employment with the employer'' will be 
construed to encompass an unbroken period of time in which an 
employee is maintained on the payroll of a single employer (or, 
as applicable, its successor) on active status, or on inactive 
status where the employer has a reasonable expectation that the 
employee will return to duty (e.g., an employee on paid or 
unpaid leave whom the employer reasonably expects will return 
to duty will generally be considered to be in a ``period of 
continuous employment'' with that employer).
    The agreement for the use of compensatory time by an 
individual employee must be affirmed by a written or otherwise 
verifiable statement that the employee has chosen to receive 
compensatory time in lieu of overtime compensation. The 
agreement must be made, kept, and preserved in accordance with 
the recordkeeping requirements under section 11(c) of the Fair 
Labor Standards Act.\39\
---------------------------------------------------------------------------
    \39\ 20 U.S.C. Sec. 211(c).
---------------------------------------------------------------------------
    An employee could accrue up to 160 hours of compensatory 
time each year. Any accrued compensatory time which has not 
been used by the employee by the end of each year (or the 
alternative 12-month period as designated by the employer) must 
be paid for by the employer to the employee in the form of 
monetary compensation. Likewise, any unused, accrued 
compensatory time would be cashed out at the end of an 
employee's employment with the employer at the average regular 
rate received by the employee during the time period in which 
the compensatory time was accrued; or the final regular rate 
received by the employee; whichever is higher. An employee 
shall, upon the voluntary or involuntary termination of 
employment, be paid for the unused compensatory time at a rate 
of compensation not less than the average regular rate received 
by the employee during the time period in which the 
compensatory time was accrued, or the final regular rate 
received by the employee, whichever is higher.
    An employee may, at any time, withdraw from a compensatory 
time agreement with the employer. An employee may also request 
in writing that monetary compensation be provided, at any time, 
for accrued compensatory time which has not yet been used. 
Within 30 days of receiving such a written request, the 
employer shall provide the employee with monetary compensation 
for the unused, accrued compensatory time.
    An employer must provide an employee with 30 days notice 
prior to cashing out an employee's accrued, unused compensatory 
time. However, the employer may only cash out unused 
compensatory time accrued by an employee in excess of 80 hours, 
unless the cash out is employee-initiated. An employer must 
also provide employees with 30 days notice prior to 
discontinuing a policy of offering compensatory time to 
employees.
    For the purposes of enforcement, any unused compensatory 
time would be considered to be the same as wages owed to the 
employee. As with any other violation of the Fair Labor 
Standards Act, all of the remedies under the Act would apply. 
Any employer who directly or indirectly intimidates, threatens, 
or coerces any employee into selecting compensatory time in 
lieu of cash compensation, or who forces an employee to use 
accrued compensatory time would be liable to the employee for 
the cash value of the accrued compensatory time, plus an 
additional equal amount as liquidated damages, reduced by the 
amount of such rate of compensation for each hour of 
compensatory time used by the employee.
    Finally, H.R. 1119 contains a sunset provision whereby the 
legislation would cease to exist five years after the date of 
its enactment. This will allow Congress to review the use of 
compensatory time by private sector employers and employees 
and, if need be, to make adjustments in the legislation 
authorizing its use.

                      Section-by-Section Analysis


Section 1.  Short title

    This Act may be cited as the ``Family Time Flexibility 
Act.''

Section 2.  Compensatory time

    Any employee may receive in lieu of monetary overtime 
compensation, compensatory time off at a rate not less than 
one-and-one-half hours for each hour of overtime worked.
    For the purposes of this subsection, the term ``employee'' 
does not include an employee of a public agency.
    An employer may provide compensatory time to employees only 
if such time is in accordance with the applicable provisions of 
a collective bargaining agreement between the employer and the 
labor organization which has been certified or recognized as 
the representative of the employees under applicable law.
    In the case of employees who are not represented by a labor 
organization which has been certified or recognized as the 
representative of such employees under applicable law, there 
must be an agreement arrived at between the employer and 
employee before the performance of the work and affirmed by a 
written or otherwise verifiable record maintained in accordance 
with section 11(c) of the Fair Labor Standards Act in which the 
employer has offered and the employee has chosen to receive 
compensatory time in lieu of monetary overtime compensation; 
such agreement must be entered into knowingly and voluntarily 
by such employee and not as a condition of employment. An 
employee may not agree to receive compensatory time unless that 
employee has worked 1,000 hours in continuous employment with 
the employer in the 12-month period prior to the date of the 
agreement or receipt of compensatory time.
    An employee may accrue not more than 160 hours of 
compensatory time. Not later than January 31 of each calendar 
year, the employee's employer shall provide monetary 
compensation for any unused compensatory time accrued during 
the preceding calendar year, which was not used prior to 
December 31 of the preceding year. Monetary compensation must 
be provided at the regular rate received when the compensatory 
time was earned or at the final regular rate, whichever is 
higher. An employer may designate and communicate to the 
employees a 12-month period other than the calendar year, in 
which case compensation shall be provided not later than 31 
days after the end of the 12-month period.
    An employer may provide monetary compensation for an 
employee's unused compensatory time in excess of 80 hours at 
any time after giving the employee at least 30 days notice. The 
compensation shall be provided at the regular rate received 
when the compensatory time was earned or the final regular 
rate, whichever is higher.
    Except where a collective bargaining agreement provides 
otherwise, an employer which has adopted a policy offering 
compensatory time to employees may discontinue such policy upon 
giving employees 30 days notice.
    An employee may withdraw from an agreement or understanding 
to accrue compensatory time at any time. An employee may also 
request in writing that monetary compensation be provided, at 
any time, for all compensatory time accrued which has not yet 
been used. Within 30 days of receipt of the written request, 
the employer shall provide the employee with the monetary 
compensation at a rate received when the compensatory time was 
earned or at the final regular rate, whichever is higher.
    An employer which provides compensatory time to employees 
shall not directly or indirectly intimidate, threaten, or 
coerce or attempt to intimidate, threaten, or coerce any 
employee for the purpose of interfering with such employee's 
rights to request or not request compensatory time off in lieu 
of payment of monetary overtime compensation for overtime 
hours; or requiring any employee to use such compensatory time.
    An employee who has accrued compensatory time off shall, 
upon the voluntary or involuntary termination of employment, be 
paid for such unused compensatory time.
    If compensation is to be paid to an employee for accrued 
compensatory time off, the compensation will be paid at a rate 
not less than the regular rate received by an employee when the 
compensatory time was earned or the final regular rate received 
by such employee, whichever is higher.
    Any payment owed to an employee for unused compensatory 
time shall be considered to be unpaid overtime compensation.
    An employee who has accrued compensatory time off and has 
requested the use of such compensatory time shall be permitted 
by the employee's employer to use such time within a reasonable 
period after making the request if the use of the compensatory 
time does not unduly disrupt the operations of the employer.
    The terms ``overtime compensation'' and ``compensatory 
time'' shall have the meanings given by subsection (o)(7) of 
the Fair Labor Standards Act.

Section 3.  Remedies

    An employer which violates the anti-coercion provisions 
(section 7(r)(4)) of this bill shall be liable to the employee 
affected in the amount of the rate of compensation (determined 
in accordance with section 7(r)(6)(A)) for each hour of 
compensatory time accrued by the employee and an additional 
equal amount as liquidated damages, reduced by the amount of 
such rate of compensation for each hour of compensatory time 
used by the employee.

Section 4.  Notice to employees

    Not later than 30 days after the date of the enactment of 
this Act, the Secretary of Labor shall revise the materials 
provided to employers for purposes of a notice explaining the 
Fair Labor Standards Act of 1938 to employees so that the 
notice reflects the amendments made by this bill to the Act.

Section 5.  Sunset

    This Act and all amendments made by this Act shall expire 
five years after its enactment.

                       Explanation of Amendments

    The bill was ordered reported without amendment.
    
    
              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1, the Congressional 
Accountability Act (CAA), requires a description of the 
application of this bill to the legislative branch. H.R. 1119 
amends the Fair Labor Standards Act of 1938 to provide 
compensatory time for all employees. Section 203(a) of the CAA 
applies the rights and protections of subsections (a)(1) and 
(d) of section 6, section 7, and section 12(c) of the Fair 
Labor Standards Act, 29 U.S.C. Sec. 206(a)(1) and (d), 207, 
212(c), to covered employees and employing offices of the 
legislative branch. Therefore, the changes made by H.R. 1119 to 
section 7 of the Fair Labor Standards Act, 29 U.S.C. Sec. 207. 
The Committee intends to make compensatory time available to 
legislative branch employees in the same way as it is made 
available to private sector employees under this legislation.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of Rule XIII and clause 
(2)(b)(1) of Rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the body of this report.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget & Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates. The Committee 
received a letter regarding unfunded mandates from the Director 
of the Congressional Budget Office and as such the Committee 
agrees that the bill does not contain any unfunded mandates. 
See infra.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the House of Representatives and section 308(a) of the 
Congressional Budget Act of 1974 and with respect to 
requirements of 3(c)(3) of rule XIII of the House of 
Representatives and section 402 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 1119 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 25, 2003.
Hon. John A. Boehner,
Chairman, Committee on Education and the Workforce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 1119, the Family 
Time Flexibility Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Sadoti.
            Sincerely,
                                         Robert A. Sunshine
                               (For Douglas Holtz-Eakin, Director).
    Enclosure.

H.R. 1119--Family Time Flexibility Act

    H.R. 1119 would amend the Fair Labor Standards Act of 1938 
to provide compensatory time for employees in the private 
sector. In lieu of overtime pay, employees could receive 
compensatory time off at a rate not less than one and one-half 
hours for each hour of employment for which overtime pay would 
otherwise be required. Such compensatory time could be provided 
only in accordance with a collective bargaining agreement or 
with the consent of the affected employees. The changes would 
be effective for five years after enactment of the bill.
    Enactment of H.R. 1119 could result in a change in 
enforcement costs of the Department of Labor, which would be 
subject to appropriation actions. CBO estimates that any 
federal costs or savings that would result from implementing 
H.R. 1119 would be insignificant.
    H.R. 1119 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Christina Hawley 
Sadoti. The estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

         Statement of General Performance Goals and Objectives

    In accordance with clause (3)(c) of House rule XIII, the 
goal of H.R. 1119 is to amend the Fair Labor Standards Act of 
1938 to allow compensatory time for all employees. The 
Committee expects the Department of Labor to implement the 
changes to the law in accordance with these stated goals.

                   Constitutional Authority Statement

    Under clause 3(d)(1) of rule XIII of the Rules of the House 
of Representatives, the Committee must include a statement 
citing the specific powers granted to Congress in the 
Constitution to enact the law proposed by H.R. 1119. The Fair 
Labor Standards Act of 1938 has been determined, by the Supreme 
Court, to be within Congress' Constitutional authority. In 
United States v. Darby, 312 U.S. 100 (1941) and OPP Cotton 
Mills, Inc., et al. v. Administrator of Wage and Hour Division 
of Department of Labor, 312 U.S. 126 (1941), the Supreme Court 
found that the regulation of hours and wages of work to be 
within the scope of Congressional powers under Article 1, 
Section 8, Clause 3 of the Constitution of the United States. 
In addition the Supreme Court has ruled that the Fair Labor 
Standards Act of 1938 does not violate the First or Fifth 
Amendments. H.R. 1119, the Working Families Flexibility Act, 
amends the Fair Labor Standards Act of 1938. Because the 
Working Families Flexibility Act modifies but does not extend 
the federal regulation of overtime hours, the Committee 
believes that the Act falls within the same scope of 
Congressional authority as the Fair Labor Standards Act of 
1938.

                           Committee Estimate

    Clause 3(d)(2) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
H.R. 1119. However, clause 3(d)(3)(B) of that rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

FAIR LABOR STANDARDS ACT OF 1938

           *       *       *       *       *       *       *



                             maximum hours

  Sec. 7. (a) * * *

           *       *       *       *       *       *       *

  (r) Compensatory Time Off for Private Employees.--
          (1) General rule.--
                  (A) Compensatory time off.--An employee may 
                receive, in accordance with this subsection and 
                in lieu of monetary overtime compensation, 
                compensatory time off at a rate not less than 
                one and one-half hours for each hour of 
                employment for which overtime compensation is 
                required by this section.
                  (B) Definition.--For purposes of this 
                subsection, the term ``employee'' does not 
                include an employee of a public agency.
          (2) Conditions.--An employer may provide compensatory 
        time to employees under paragraph (1)(A) only if such 
        time is provided in accordance with--
                  (A) applicable provisions of a collective 
                bargaining agreement between the employer and 
                the labor organization which has been certified 
                or recognized as the representative of the 
                employees under applicable law; or
                  (B) in the case of employees who are not 
                represented by a labor organization which has 
                been certified or recognized as the 
                representative of such employees under 
                applicable law, an agreement arrived at between 
                the employer and employee before the 
                performance of the work and affirmed by a 
                written or otherwise verifiable record 
                maintained in accordance with section 11(c)--
                          (i) in which the employer has offered 
                        and the employee has chosen to receive 
                        compensatory time in lieu of monetary 
                        overtime compensation; and
                          (ii) entered into knowingly and 
                        voluntarily by such employees and not 
                        as a condition of employment.
        No employee may receive or agree to receive 
        compensatory time off under this subsection unless the 
        employee has worked at least 1000 hours for the 
        employee's employer during a period of continuous 
        employment with the employer in the 12-month period 
        before the date of agreement or receipt of compensatory 
        time off.
          (3) Hour limit.--
                  (A) Maximum hours.--An employee may accrue 
                not more than 160 hours of compensatory time.
                  (B) Compensation date.--Not later than 
                January 31 of each calendar year, the 
                employee's employer shall provide monetary 
                compensation for any unused compensatory time 
                off accrued during the preceding calendar year 
                which was not used prior to December 31 of the 
                preceding year at the rate prescribed by 
                paragraph (6). An employer may designate and 
                communicate to the employer's employees a 12-
                month period other than the calendar year, in 
                which case such compensation shall be provided 
                not later than 31 days after the end of such 
                12-month period.
                  (C) Excess of 80 hours.--The employer may 
                provide monetary compensation for an employee's 
                unused compensatory time in excess of 80 hours 
                at any time after giving the employee at least 
                30 days notice. Such compensation shall be 
                provided at the rate prescribed by paragraph 
                (6).
                  (D) Policy.--Except where a collective 
                bargaining agreement provides otherwise, an 
                employer which has adopted a policy offering 
                compensatory time to employees may discontinue 
                such policy upon giving employees 30 days 
                notice.
                  (E) Written request.--An employee may 
                withdraw an agreement described in paragraph 
                (2)(B) at any time. An employee may also 
                request in writing that monetary compensation 
                be provided, at any time, for all compensatory 
                time accrued which has not yet been used. 
                Within 30 days of receiving the written 
                request, the employer shall provide the 
                employee the monetary compensation due in 
                accordance with paragraph (6).
          (4) Private employer actions.--An employer which 
        provides compensatory time under paragraph (1) to 
        employees shall not directly or indirectly intimidate, 
        threaten, or coerce or attempt to intimidate, threaten, 
        or coerce any employee for the purpose of--
                  (A) interfering with such employee's rights 
                under this subsection to request or not request 
                compensatory time off in lieu of payment of 
                monetary overtime compensation for overtime 
                hours; or
                  (B) requiring any employee to use such 
                compensatory time.
          (5) Termination of employment.--An employee who has 
        accrued compensatory time off authorized to be provided 
        under paragraph (1) shall, upon the voluntary or 
        involuntary termination of employment, be paid for the 
        unused compensatory time in accordance with paragraph 
        (6).
          (6) Rate of compensation.--
                  (A) General rule.--If compensation is to be 
                paid to an employee for accrued compensatory 
                time off, such compensation shall be paid at a 
                rate of compensation not less than--
                          (i) the regular rate received by such 
                        employee when the compensatory time was 
                        earned; or
                          (ii) the final regular rate received 
                        by such employee,
                whichever is higher.
                  (B) Consideration of payment.--Any payment 
                owed to an employee under this subsection for 
                unused compensatory time shall be considered 
                unpaid overtime compensation.
          (7) Use of time.--An employee--
                  (A) who has accrued compensatory time off 
                authorized to be provided under paragraph (1); 
                and
                  (B) who has requested the use of such 
                compensatory time,
        shall be permitted by the employee's employer to use 
        such time within a reasonable period after making the 
        request if the use of the compensatory time does not 
        unduly disrupt the operations of the employer.
          (8) Definitions.--The terms ``overtime compensation'' 
        and ``compensatory time'' shall have the meanings given 
        such terms by subsection (o)(7).

           *       *       *       *       *       *       *


                               penalties

  Sec. 16. (a) * * *
  [(b) Any employer] (b) Except as provided in subsection (f), 
any employer who violates the provisions of section 6 or 
section 7 of this Act shall be liable to the employee or 
employees affected in the amount of their unpaid minimum wages, 
or the unpaid overtime compensation, as the case may be, and in 
an additional equal amount as liquidated damages. Any employer 
who violates the provisions of section 15(a)(3) of this Act 
shall be liable for such legal or equitable relief as may be 
appropriate to effectuate the purposes of section 15(a)(3), 
including without limitation employment, reinstatement, 
promotion, and the payment of wages lost and an additional 
equal amount as liquidated damages. An action to recover the 
liability prescribed in either of the preceding sentences may 
be maintained against any employer (including a public agency) 
in any Federal or State court of competent jurisdiction by any 
one or more employees for and in behalf of himself or 
themselves and other employees similarly situated. No employees 
shall be a party plaintiff to any such action unless he gives 
his consent in writing to become such a party and such consent 
is filed in the court in which such action is brought. The 
court in such action shall, in addition to any judgment awarded 
to the plaintiff or plaintiffs, allow a reasonable attorney's 
fee to be paid by the defendant, and costs of the action. The 
right provided by this subsection to bring an action by or on 
behalf of any employee, and the right of any employee to become 
a party plaintiff to any such action, shall terminate upon the 
filing of a complaint by the Secretary of Labor in an action 
under section 17 in which (1) restraint is sought of any 
further delay in the payment of unpaid minimum wages, or the 
amount of unpaid overtime compensation, as the case may be, 
owing to such employee under section 6 or section 7 of this act 
by an employer liable therefor under the provisions of this 
subsection or (2) legal or equitable relief is sought as a 
result of alleged violations of section 15(a)(3).

           *       *       *       *       *       *       *

  (f) An employer which violates section 7(r)(4) shall be 
liable to the employee affected in the amount of the rate of 
compensation (determined in accordance with section 7(r)(6)(A)) 
for each hour of compensatory time accrued by the employee and 
in an additional equal amount as liquidated damages reduced by 
the amount of such rate of compensation for each hour of 
compensatory time used by such employee.

           *       *       *       *       *       *       *


                             MINORITY VIEWS

                              Introduction

    The most important employment protection in the day-to-day 
life of millions of workers is the family-friendly overtime 
provisions of the Fair Labor Standards Act (FLSA). At least 63 
million private sector workers are required to be paid time-
and-a-half for hours worked in excess of 40 hours a week. 
Millions of these workers depend on overtime pay to make ends 
meet. All of these workers and, because of the custom 
established, millions more who are not entitled overtime pay 
depend upon the overtime law to provide them with fixed work 
schedules and time off to spend with their families. There is 
no single change that Congress could make to our labor laws 
that would do more to undermine the standard of living for 
Americans than to weaken or eliminate the FLSA overtime 
requirement.
    H.R. 1119 undermines the 40-hour workweek and harms working 
families at the time when workers are working harder for less. 
On April 26, 2003, the New York Times reported that the 
inflation-adjusted weekly pay of a median worker fell 1.5 
percent from early last year--the biggest drop since the mid-
1990s. H.R. 1119 reduces the income of workers at a time when 
they are already struggling to make ends meet. Since March 
2001, private sector payrolls have declined by 2.6 million. In 
March 2003, the economy lost 108,000 jobs and in January and 
February 2003, the economy lost 456,000 jobs. By reducing 
overtime costs, H.R. 1119 encourages employers to schedule more 
overtime and hire fewer workers at a time when the economy is 
already losing jobs.
H.R. 1119 puts workers wages at risk, and constitutes an interest free 
        loan to employers
    The majority justifies H.R. 1119 on the basis that workers 
need and desire more time off in order to better balance 
personal and family needs and work.\1\ We do not dispute that 
working families are facing increasing difficulties or that 
they desire greater flexibility in meeting family and work 
needs. Unfortunately, H.R. 1119 doesn't do anything at all to 
promote greater flexibility for working families. In fact, it 
does just the opposite. If enacted, this legislation will 
exacerbate rather than alleviate these problems. An analysis by 
the Economic Policy Institute of H.R. 1119 concludes the 
following:
---------------------------------------------------------------------------
    \1\ The majority also contends that comp time should be extended to 
the private sector because it has been extended to the public sector. 
The primary argument put forth by the proponents of H.R. 1119, however, 
is that comp time will benefit private sector employers. However, 
Congress permitted comp time in the public sector for the primary 
benefit of private sector employers, not their employees. Until 1985, 
most public sector employers had never been required by federal law to 
pay time-and-a-half. Comp time was permitted in the public sector 
because it would mitigate the cost of compliance with the FLSA that 
public employers would otherwise face and because in the absence of 
FLSA coverage, many public employers had developed comp time systems 
and the Congress did not want to disrupt them. Private sector 
employers, however, are not facing new costs as a result of having to 
comply with the FLSA, they have been covered by the Act since 1938; nor 
are there existing comp time systems in the private sector to preserve. 
Further, obvious and important differences between the private sector 
and the public sector clearly indicate that comp time is likely to be 
far more difficult to administer in a manner that protects private 
sector workers than is the case in the public sector. More than 40 
percent of the public sector is organized and protected by collective 
bargaining agreements and bargaining representatives. In addition, most 
public sector employees, whether or not a union represents them, are 
protected by civil service laws from arbitrary or unfair treatment. By 
contrast, only approximately 10 percent of private sector employees 
have union representation. Ninety percent of the private sector workers 
are ``at will'' employees who may be terminated for any reason, except 
those statutorily prohibited, or no reason at all. Finally, as 
presumably our Republican colleagues would be the first to agree, 
private sector employers are under much stronger market pressures, both 
in terms of personal profit and in terms of competitive pressure, to 
reduce costs, including labor costs, than are public sector employers.
---------------------------------------------------------------------------
    ``The compensatory or ``comp,'' time bill (H.R. 1119) 
proposed by Rep. Judy Biggert (R-Ill.) would upset that balance 
by eroding protections for workers' rights and creating a 
strong financial incentive for employers to lengthen the 
workweek. A clear-headed look reveals that there is nothing in 
the proposed bill for workers but rhetoric and slick marketing. 
Contrary to what the bill's proponents say, H.R. 1119 doesn't 
create employee rights--it takes them away. It does, however, 
create a dangerous new employer right--the right to delay 
paying any wages for overtime work for as long as 13 months.'' 
\2\
---------------------------------------------------------------------------
    \2\ ``The Naked Truth About Comp Time--Current proposal is like 
emperor's new clothes: there's nothing for workers,'' Ross Eisenbrey, 
Economic Policy Institute, Issue Brief #190, March 31, 2003.
---------------------------------------------------------------------------
    H.R. 1119 simply permits employers to delay paying for 
overtime work, while doing nothing to make work schedules more 
flexible. In effect, employees are being asked to give a no-
interest loan to their employer until the comp-time is taken or 
payment is made, up to 13 months later. And of course, if a 
company goes belly up--or closes--which happened to more than 
500,000 businesses last year--the employee may never get paid 
for thousands of dollars of overtime pay.
H.R. 1119 does not increase employee flexibility in any way: Employers 
        may already liberally grant time off
    Employers may already liberally grant the equivalent of 
comp-time. Under current law the employee is paid up-front when 
the overtime is worked. The only change that H.R. 1119 makes is 
that the worker is not compensated for overtime work until some 
indefinite point in the future. For example, assume an employee 
works 60 hours of overtime in January earning $900, and wants 
two weeks off in July. Under current law, the employer may 
grant the two weeks off in July, but must pay the $900 after 
the overtime work is done in January. Under H.R. 1119, the 
employer grants the employee the two weeks off in July, but is 
excused from paying the $900 wages owed the employee for work 
done in January, until July. Thus, the employee gets the same 
amount of time off in both cases, but under H.R. 1119 must wait 
until July to get paid for overtime work completed in January. 
Clearly it is the employer, not employees, who are the 
principal beneficiaries of H.R. 1119. It also explains why 
every organization representing employees, including the AFL-
CIO and over a dozen women's groups, such as The National 
Organization for Women (NOW), 9 to 5--National Association of 
Working Women, and The National Partnership for Women and 
Families are opposed to the bill.\3\
---------------------------------------------------------------------------
    \3\ Employers take little advantage of the flexibility that the 
Fair Labor Standards Act already permits. Very few employers offer time 
off based on overtime hours worked. Overtime is generally required 
after an employee has worked in excess of 40 hours over a seven-day 
period. The number of hours a worker works in a particular day or 
whether the employer or worker chose what hours to work is immaterial 
to the determination of overtime liability under the federal law. There 
is no requirement that employees must work five eight-hour days. An 
employer may allow employees to work four 10-hour days without 
incurring overtime liability, but few do. An employer may allow workers 
to vary when they begin or end work around a core set of hours without 
incurring overtime liability, but few do. By starting the schedule at 
the end rather than the beginning of the week, an employee can work 
eight nine-hour days and one eight-hour day and have a three-day 
weekend every other week without incurring overtime, but few employers 
allow such schedules.
---------------------------------------------------------------------------

H.R. 1119 gives employers--not employees--the right to control comp-
        time

    H.R. 1119 does not give any employee the right to control 
comp-time. The employer decides whether to offer any comp-time. 
Even if the employer decides to offer comp-time, the employer 
may arbitrarily decide to only offer comp-time to some 
employees while denying it to others; or an employer can 
arbitrarily deny comp-time to a worker on some occasions, while 
offering it on others. Rather than increasing a worker's 
control over his or her own life, H.R. 1119 increases the 
employer's control over the worker's life.
    Finally, even if the employer does offer comp-time, and the 
employee request it, the bill gives the employer total control 
over when comp-time can be taken. The employer may deny an 
urgent request for comp-time from an employee if it is 
inconvenient for the employer. For example, assume a worker 
wants to use three days of accrued comp-time to care for a 
spouse who is undergoing life-threatening surgery. Regardless 
of how much notice the employee provides of the intent to take 
leave, and notwithstanding the fact that the employee would 
have a statutory right to take leave under the Family and 
Medical Leave Act, the employer may still deny the employee the 
right to use the comp-time the employee has earned.\4\
---------------------------------------------------------------------------
    \4\ The majority contends ``that the `unduly disrupt' standard 
contained in H.R. 1119 is similar to the standard employed under the 
Family [and] Medical Leave Act that limits an employee's right to take 
leave for medical treatments for the employee or a member of his or her 
family (`* * * the employee shall make a reasonable effort to schedule 
the treatment so as not to disrupt unduly the operations of the 
employer * * *'),'' As was stated in the minority views accompanying 
H.R. 1, a bill essentially identical to H.R. 1119:
    ``[A] simple comparison of H.R. 1 to the FMLA (the Family and 
Medical Leave Act) reveals striking dissimilarities. Under the FMLA, an 
employee of a covered employer has an absolute right to take up to 12 
weeks of leave in the event of certain family or medical emergencies. 
An employer may not deny an employee such leave nor terminate an 
employee for exercising the right to take such leave. The FMLA further 
provides, in the case of planned medical treatment, that it is the duty 
of the employee to make a reasonable effort to schedule leave in a 
manner that does not disrupt unduly the operations of the employer. If, 
despite that reasonable effort, the employee cannot schedule leave at a 
time that does not disrupt unduly the operations of the employer, the 
employer has no right to deny employee leave. Further, even where the 
leave under FMLA may be scheduled at a time that does not disrupt 
unduly the operations of the employer, it may only be done so subject 
to the approval of the Health care provider. If the health care 
provider is unable to accommodate a treatment schedule more convenient 
to the employer, the employer may not infringe upon the employee's 
right. By contrast, under H.R. 1, an employer may deny the use of 
earned compensatory time to the employee whenever the leave would 
`unduly disrupt' the employer's operations; it is that plain.''
    Under FMLA an employee has a right to take leave; under H.R. 1119 
the employer has right to deny leave to the employee. These provisions 
are ``similar'' only to the extent that one ignores the context in 
which the terms ``unduly disrupt'' and ``disrupt unduly'' are used.
---------------------------------------------------------------------------

H.R. 1119 would further undermine enforcement of overtime laws

    Given the longstanding history of non-compliance with the 
overtime laws in many industries, the concern about potential 
abuse of comp-time is well founded.\5\ In 1994, a random check 
of 69 garment contractors in Southern California found that 73 
percent maintained improper payroll records (without which, 
fair administration of comp-time would be impossible), 68 
percent were not paying overtime in accordance with current 
law, and 51 percent were not even paying minimum wage. Recent 
targeted enforcement efforts in the nursing home and poultry 
industries also found widespread noncompliance with the 
overtime provisions.\6\ The Wage and Hour Division of the 
Department of Labor has fewer than 1,000 inspectors with which 
to regulate a labor force of 150 million workers and 7 million 
workplaces.
---------------------------------------------------------------------------
    \5\ See ``The FLSA Comp-Time Controversy: Fostering Flexibility or 
Diminishing Worker Rights?'' David J. Walsh, 20 Berkeley Journal of 
Employment and Labor Law 74, at 103-104. The overtime law is among the 
most commonly violated laws in the country. The most extensive study of 
compliance with the Fair Labor Standards Act was conducted by the 
Minimum Wage Study Commission. For the Commission's Work, compliance 
audits were conducted in 1979 of randomly selected companies. The 
Commission found that 21 percent of the establishments where overtime 
work had been performed violated the overtime provisions in the week in 
which the audit was conducted. Of the employees who had worked overtime 
in the study week, 4.2 percent did not receive full overtime pay. Over 
a two-year period, almost half, 43 percent, of the establishments 
audited committed at least one overtime violation. Employees were owed 
$11 million in back wages for overtime during the audit week and $811 
million over the two-year period. The Commission also concluded that 
only one-fifth of the back wages owed to workers would have been 
detected through the Department of Labor's normal enforcement 
procedures.
    \6\ Id., at 104-110.
---------------------------------------------------------------------------
    H.R. 1119 would greatly increase the complexity of 
enforcing the law by making it more difficult to determine 
whether an overtime violation has occurred. It would greatly 
increase the number of violations that occur as employers seek 
to keep pace with competitors and the temptation to defer 
payment for overtime work grows. Finally, it would inevitably 
result in more workers receiving no compensation at all for 
their overtime work.\7\
---------------------------------------------------------------------------
    \7\ The majority contends that comp time is protected in bankruptcy 
proceedings because the legislation specifies ``any payment owed to an 
employee under this subsection for unused compensatory time shall be 
considered unpaid overtime compensation.'' As stated in majority views 
of this report, * * * this provision also assure that any unpaid, 
accrued compensatory time is treated as unpaid employee wages in the 
event of the employer's bankruptcy.'' In the first instance, the 
statement is false. We are not amending the bankruptcy code; we are 
amending the Fair Labor Standards Act. While it is to be hoped that the 
bankruptcy court would give deference to the FLSA and the Committee's 
intent, without amending the bankruptcy code, we cannot be ``assured'' 
of the fact. More importantly, according to the Small Business 
Administration, even in 2000--a boom year, 550,000 businesses folded. 
In the case of most of those failures, workers would be lucky to 
receive anything for their unused comp-time regardless of whether the 
bankruptcy court consider comp-time to be unpaid wages.
---------------------------------------------------------------------------

                               Conclusion

    H.R. 1119 appears to be a part of an overall, broad-ranged 
attack against the 40-hour workweek. In the Senate, the comp-
time legislation also includes flextime provisions that replace 
the 40-hour workweek with an 80-hour, two-week period that 
makes it substantially easier and cheaper for employers to 
require employees to work longer hours at the expense of 
working families.
    On March 31, 2003, the Bush Administration proposed 
regulations that represent the broadest and most serious threat 
to the overtime law since its enactment in 1938. The proposed 
regulations redefine the overtime exemptions in a manner that 
may result in millions of middle-class Americans losing their 
right to overtime pay. This amounts to a massive transfer of 
wealth directly from the pockets of middle-class workers to the 
pockets of employers.
    The Administration is not only proposing to diminish the 
wages of working families, they are stealing time as well. We 
already have a family time flexibility act--it is called the 
Fair Labor Standards Act. The requirement that employers pay 
overtime is the only enforcement mechanism for the 40-hour 
workweek. It is the overtime requirement that ensures that 
workers have predictable schedules and time off to meet family 
needs. Undermining this requirement--as H.R. 1119 does--or 
limiting the number of workers covered by overtime--as seems to 
be the intention of the Administration's regulations--results 
in workers having less time for personal and family needs and 
less money with which to meet those needs.
    We urge our colleagues to reject H.R. 1119.

                                   George Miller,
                                   Dale E. Kildee,
                                   Lynn Woolsey,
                                   Major R. Owens,
                                   Danny K. Davis,
                                   Betty McCollum,
                                   Ed Case,
                                   Denise L. Majette,
                                   Ruben Hinojosa,
                                   Ron Kind,
                                   David Wu,
                                   Timothy Ryan,
                                   Donald Payne,
                                   Robert E. Andrews,
                                   Raul M. Grijalva,
                                   Rush Holt,
                                   Carolyn McCarthy,
                                   Dennis J. Kucinich,
                                   Chris Van Hollen,
                                   Timothy Bishop,
                                   Susan A. Davis,
                                   John F. Tierney.

                                
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