Compensatory time

Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) is amended by adding at the end the following: (t) Compensatory time off for private employees (1) General rule 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. (2) Conditions An employer may provide compensatory time to employees under paragraph (1) only if such time is provided in accordance with— (A) applicable provisions of a collective bargaining agreement between the employer and the labor organization that 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 that 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 employee 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 1,000 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 that was not used prior to December 31 of the preceding calendar 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 that has adopted a policy offering compensatory time to employees may, upon giving employees 30 days notice, discontinue such policy and provide monetary compensation to each employee with accrued compensatory time that has not yet been used for all such compensatory time. Such compensation shall be provided at the rate prescribed by paragraph (6). (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 that 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 that 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 For purposes of this subsection— (A) the term employee does not include an employee of a public agency; and (B) the terms overtime compensation, compensatory time, and compensatory time off shall have the meanings given such terms by subsection (o)(7)..

Section 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 207) is amended by adding at the end the following: (t) Compensatory time off for private employees (1) General rule (A) In general During the 5-year period beginning on the date of enactment of the Working Families Flexibility Act of 2025, an employee described in subparagraph (B) 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) Eligible employee An employee described in this subparagraph is an employee who— (i) is not an employee of a public agency; and (ii) works at least 1,000 hours for the employee’s employer during a period of continuous employment with the employer in the 12-month period ending on the date— (I) on which the agreement under paragraph (2)(B) is entered into by the employee and the employee’s employer; or (II) of receipt of compensatory time off under this subsection. (2) Conditions An employer (other than an employer that is a public agency subject to subsection (o)) may provide compensatory time to employees under this subsection only if such time is provided in accordance with— (A) applicable provisions of a collective bargaining agreement between the employer and the labor organization that 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 that has been certified or recognized as the representative of such employees under applicable law, an agreement arrived at between the employer and such an 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 employee and not as a condition of employment. (3) Hour limit (A) Maximum hours An employee may accrue not more than 160 hours of compensatory time under this subsection. (B) Compensation date (i) In general An employer shall provide to the employee, not later than 31 days after a covered period, monetary compensation for any unused compensatory time accrued during such covered period. (ii) Covered period For the purposes of clause (i), a covered period means— (I) a calendar year; or (II) another 12-month period determined by the employer and communicated to the employees of the employer. (C) Excess of 80 hours An employer may provide monetary compensation for the employee’s unused compensatory time in excess of 80 hours at any time after giving the employee at least 30 days notice of the provision of such monetary compensation. Such compensation shall be provided at the rate prescribed by paragraph (6). (D) Discontinuation of compensatory time policy Except where a collective bargaining agreement provides otherwise, an employer that offers employees compensatory time in accordance with this subsection may, upon giving the employees notice of at least 30 days, stop offering such compensatory time and provide monetary compensation to each employee with accrued compensatory time that has not yet been used for all such accrued, unused compensatory time. Such compensation shall be provided at the rate prescribed by paragraph (6). (E) Written requests (i) In general An employee who has an agreement described in paragraph (2)(B) with an employer may, in writing, at any time— (I) withdraw from such agreement; or (II) request that monetary compensation be provided for all compensatory time accrued that has not yet been used. (ii) Monetary compensation Not later than 30 days of receiving a written request as described in clause (i)(II), the employer shall provide the employee the monetary compensation due in accordance with paragraph (6). (4) Private employer actions An employer that provides compensatory time under this subsection 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 this subsection 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 under this subsection, 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 this subsection; 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 For purposes of this subsection, the terms overtime compensation, compensatory time, and compensatory time off have the meanings given such terms in subsection (o)(7)..