Republicans Have A Plan To Loosen Overtime Protections

The plan, which passed the House Tuesday, would let companies pay workers with time instead of money.

WASHINGTON ― Republicans have revived an old plan to loosen the overtime law that guarantees workers time-and-a-half pay when they work more than 40 hours in a week. Under the Republican proposal, employers could offer their workers extra time off, rather than extra pay, when they log overtime.

Billed as the Working Families Flexibility Act, the measure gives Republicans a rare opportunity to stand as champions for family time and work-life balance. But if it were enacted, the law could weaken a bedrock workplace protection and open the door to coercion by employers.

The House of Representatives voted 229-197, mostly along partisan lines, to approve the measure on Tuesday, sending it to the Republican-controlled Senate. Rep. Martha Roby (R-Ala.), who has championed the proposal for years, said ahead of Tuesday’s vote that the United States’ Great Depression-era laws need an update.

“Congress cannot legislate another hour in the day,” Roby said. “If you talk to hardworking moms and dads all over this country, a lot of them will tell you that they value time more than they do the cash payments for overtime.”

The Fair Labor Standards Act of 1938 banned child labor and introduced the federal minimum wage and extra pay for overtime. Under the law, employers are required to pay the overtime premium whenever a worker covered by the law racks up more than 40 hours. Because of that, the law discourages companies from overworking individuals and encourages them to spread the work around to other employees.

The Republican proposal would allow employers and their workers to enter into arrangements that reward extra work with extra time instead of money: specifically, 1.5 hours of compensatory time off for each hour worked beyond 40. Workers who don’t end up using their banked comp time would get paid out for it at a later date.

Although it sounds great in theory, the plan could have unforeseen consequences in practice. Even though workers ostensibly have a choice between extra time and extra pay, a coercive boss could pressure employees to take the hours rather than the cash. That would amount to an interest-free loan for the employer. What’s more, the boss ultimately controls when the comp time is used. The bill gives employers the leeway to turn down requests to use comp time if it “unduly disrupt[s] the operations of the employer.”

Celine McNicholas, a labor lawyer with the left-leaning Economic Policy Institute, said the proposed reforms ignore the power balance inside a real-world workplace.

“It sets up a dynamic, for the first time since [the law] was created, that employees are going to have to ask to be paid overtime that they’ve earned,” McNicholas said. “Sitting down with employers and electing to choose comp time or [to be] paid the overtime they’ve earned ... we know in reality what those situations can look like in terms of pressure.”

Republicans have placed certain protections in the proposal to try to prevent such situations. For instance, the bill states clearly that employers cannot intimidate or coerce workers on the overtime question, and when they do, they would be liable not just for the overtime pay but for damages as well. But that protection is predicated on workers filing federal complaints against their bosses ― and those complaints being investigated by a Labor Department whose funding Republicans want to cut.  

Republicans like to note that such comp time arrangements already work well in the public sector. The New York Times editorial board said as much when it supported an earlier iteration of the measure years ago. But as McNicholas points out, government jobs are typically unionized, and public-sector workers have protections that many in the private sector do not. They would have less to fear if they needed to confront their employer over overtime abuses.

Employees are going to have to ask to be paid overtime that they’ve earned. Celine McNicholas, Economic Policy Institute

Tuesday’s vote is at least the third time in recent years that Republicans have passed a comp time bill in the House. As in previous years, the bill’s prospects in the Senate are uncertain, since Republicans would need the support of at least eight Democrats in order to get the 60 votes needed.

Several Senate Democrats who are either up for re-election or have shown a willingness to cooperate with Republicans said they were unfamiliar with the proposal. Sens. Joe Manchin (W.Va.), Jon Tester (Mont.), Heidi Heitkamp (N.D.) and Mark Warner (Va.) told HuffPost they hadn’t heard of it; Warner said it sounded concerning and Tester said it sounded intriguing.

Sen. Sherrod Brown (D-Ohio), who is trying to find a populist path to re-election in 2018, had heard of the bill.

“It exploits workers,” he said. “It hurts workers’ ability to get paid overtime.”

Fewer and fewer workers are protected by the overtime requirements in the Fair Labor Standards Act. The law applies to wage-earners and salaried workers who generally earn less than $23,660 a year, a low threshold that hasn’t been updated since 2004. The Obama administration’s effort to set the threshold at $47,476 ― which would extend overtime protections to an additional 4 million workers ― has been tied up in court. The Trump administration has suggested it doesn’t support the higher level.  

The White House has said President Donald Trump would sign the comp time legislation the House passed Tuesday.

Matt Fuller contributed reporting.

UPDATE 8:50 p.m.: A spokesperson for Sen. Jon Tester (D-Mont.) said that after reviewing the overtime proposal, Tester doesn’t like it.