H.R. 2870: Working Families Flexibility Act of 2025

This bill is called the Working Families Flexibility Act of 2025 and aims to change how overtime compensation is handled for private-sector employees under the Fair Labor Standards Act of 1938. Here are the key points of the bill:

Compensatory Time Off

The bill allows employers to offer compensatory time off instead of monetary overtime pay. Specifically, for every hour of overtime worked, employees can receive 1.5 hours of compensatory time off.

Conditions for Compensatory Time

Employers can provide compensatory time only if:

• There is a collective bargaining agreement with a labor organization representing the employees, or
• In cases where employees are not represented, there is an agreement between the employer and employee before the work is performed, and the employee voluntarily chooses to accept compensatory time instead of overtime pay.

Employees must have worked at least 1,000 hours for their employer in the 12 months before agreeing to receive compensatory time.

Limits and Compensation

Employees can accrue a maximum of 160 hours of compensatory time. Employers must compensate employees for any unused compensatory time at the end of the calendar year or at the end of a designated 12-month period. Payment for unused compensatory time must occur by January 31 of the following year or 31 days after the end of the designated period.

Employers can provide payment for any compensatory time in excess of 80 hours with a 30-day notice. Employers also have the option to discontinue a compensatory time policy with notice, and they must pay out any unused time at that moment.

Employee Rights

The bill protects employees from intimidation or coercion regarding their choice to request or decline compensatory time. Employees can withdraw their agreement for compensatory time at any time and request monetary compensation for unused hours.

Termination of Employment

If an employee leaves their job, whether voluntarily or involuntarily, they must be compensated for any unused compensatory time.

Rate of Compensation for Unused Time

When compensating for unused compensatory time, the pay rate must be at least the higher of:

• The regular rate at which the employee earned the compensatory time, or
• The employee's final regular rate.

This pay will be treated as unpaid overtime compensation.

Requesting to Use Accrued Time

Employees who have accumulated compensatory time and request to use it should be allowed to do so within a reasonable period unless it disrupts employer operations.

Definitions

The bill clarifies that the term "employee" does not include public agency employees and that terms like "overtime compensation" and "compensatory time" are defined as indicated in existing law.

Remedies for Violations

The bill introduces remedies for employees if an employer violates the provisions regarding compensatory time. Employers found in violation can be required to pay employees the compensation owed, with additional liquidated damages.

Notices to Employees

The Secretary of Labor is required to update informational materials regarding the Fair Labor Standards Act to reflect these new provisions within 30 days of the bill's enactment.

Reporting Requirements

Within two years of enactment and every three years after, the Comptroller General must report to Congress about how often compensatory time is offered by employers, the extent of employee requests for it, and any related complaints filed with the Secretary of Labor.

Expiration of the Act

This Act will expire five years after its enactment.

Relevant Companies

None found.