```

[House Report 113-49]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     113-49

======================================================================

 
                WORKING FAMILIES FLEXIBILITY ACT OF 2013

                                _______
                                

 April 30, 2013.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

Mr. Kline, 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. 1406]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Education and the Workforce, to whom was 
referred the bill (H.R. 1406) 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 with an amendment and recommend that the bill as 
amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Working Families Flexibility Act of 
2013''.

SEC. 2. 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:
  ``(s) 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)(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 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 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 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 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 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 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' and 
                `compensatory time' shall have the meanings given such 
                terms by subsection (o)(7).''.

SEC. 3. REMEDIES.

  Section 16 of the Fair Labor Standards Act of 1938 (29 U.S.C. 216) is 
amended--
          (1) in subsection (b), by striking ``(b) Any employer'' and 
        inserting ``(b) Except as provided in subsection (f), any 
        employer''; and
          (2) by adding at the end the following:
  ``(f) An employer that violates section 7(s)(4) shall be liable to 
the employee affected in the amount of the rate of compensation 
(determined in accordance with section 7(s)(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.''.

SEC. 4. NOTICE TO EMPLOYEES.

  Not later than 30 days after the date of enactment of this Act, the 
Secretary of Labor shall revise the materials the Secretary provides, 
under regulations published in section 516.4 of title 29, Code of 
Federal Regulations, to employers for purposes of a notice explaining 
the Fair Labor Standards Act of 1938 to employees so that such notice 
reflects the amendments made to such Act by this Act.

SEC. 5. SUNSET.

  This Act and the amendments made by this Act shall expire 5 years 
after the date of enactment of this Act.

 H.R. 1406, WORKING FAMILIES FLEXIBILITY ACT OF 2013, COMMITTEE REPORT

                                Purpose

    The purpose of H.R. 1406, the Working Families Flexibility 
Act of 2013, is to amend the Fair Labor Standards Act of 1938 
to provide compensatory time for employees in the private-
sector.

                            Committee Action

                             104TH CONGRESS

    The committee's consideration of policies to allow 
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 of 1938 (FLSA), the Subcommittee 
on Workforce Protections held a hearing on June 8, 1995 on 
amending the FLSA to provide private-sector employers the 
option of allowing their employees to voluntarily choose to 
take 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 FLSA to provide 
compensatory time for private-sector employees. The following 
witnesses testified at the hearing: 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 roll call vote of 20 
yeas and 16 nays. H.R. 2391 was passed by the House, as 
amended, on July 30, 1996 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. 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, University 
of Miami, Coral Gables, Florida, testifying on behalf of the 
College and University Personnel Association; 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, AFL-CIO 
Working Women's Project, Washington, D.C.; and Ms. Helen 
Norton, Director of Equal Opportunity Programs, 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 roll call vote of 23 yeas and 17 nays. 
H.R. 1 was passed by the House, as amended, on March 19, 1997 
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, no action was taken on the 
legislation.

                             107TH CONGRESS

    On May 24, 2001 Representative Judy Biggert introduced H.R. 
1982, the Working Families Flexibility Act. The bill was 
identical to H.R. 1 as passed by the House during the 105th 
Congress. While no action was taken on H.R. 1982, the 
Subcommittee on Workforce Protections held two hearings 
focusing on the issue of increasing workplace flexibility under 
the FLSA.
    On March 6, 2002 the following individuals testified before 
the subcommittee: 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: 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 SHRM; and Mr. Dennis Slocumb, Executive 
Vice President and Legislative Director, International Union of 
Police Associations, AFL-CIO, Alexandria, Virginia.

                             108TH CONGRESS

    On March 6, 2003 Representative Judy Biggert introduced 
H.R. 1119, the Family Time Flexibility Act, which was identical 
to 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, The HR 
Group, Northbrook, Illinois, testifying on behalf of SHRM.
    On April 3, 2003 the Subcommittee on Workforce Protections 
favorably reported H.R. 1119, without amendment, to the full 
committee by a roll call 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 roll call vote of 27 yeas and 22 
nays. However, the House did not act on H.R. 1119 prior to the 
adjournment of the 108th Congress.

                             110TH CONGRESS

    On May 13, 2008 Representative Cathy McMorris Rodgers 
introduced H.R. 6025, the Family-Friendly Workplace 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 Labor; however, no action was taken on the legislation.

                             111TH CONGRESS

    On February 10, 2009 Representative Cathy McMorris Rodgers 
reintroduced the Family-Friendly Workplace Act, H.R. 933, which 
was identical to H.R. 1 as passed by the House during the 105th 
Congress. The bill was referred to the Subcommittee on 
Workforce Protections; however, no action was taken on the 
legislation.

                             113TH CONGRESS

    On April 9, 2013 Representative Martha Roby introduced H.R. 
1406, the Working Families Flexibility Act of 2013, 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.
    On April 11, 2013 the Subcommittee on Workforce Protections 
held a hearing on H.R. 1406. The following individuals 
testified at the hearing: Mr. Andy Brantley, President and 
Chief Executive Officer, CUPA-HR, Knoxville, Tennessee; Ms. 
Karen DeLoach, Montgomery, Alabama; Ms. Juanita Phillips, 
Director of Human Resources, Intuitive Research and Technology 
Corporation, Huntsville, Alabama, testifying on behalf of SHRM; 
and Ms. Judith Lichtman, Senior Advisor, National Partnership 
for Women & Families, Washington, D.C.
    On April 17, 2013 the Committee on Education and the 
Workforce considered H.R. 1406. Representative Roby offered an 
amendment in the nature of a substitute, which made technical 
changes to the legislation. The committee favorably reported 
H.R. 1406, as amended, to the House of Representatives by a 
roll call vote of 23 yeas and 14 nays.

                                Summary

    H.R. 1406 would give private-sector employers and employees 
an option under the FLSA that federal, state, and local 
governments have had for many years. H.R. 1406 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 compensatory time off in lieu of 
receiving cash overtime wages. An employee would be able to 
choose, based upon an agreement with his or her employer, to 
have his or her overtime compensated with paid time off.
    The bill would not change the 40-hour workweek 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 an employee's regular rate of 
pay. If an employer and an 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. 1406 would provide new employee protections, in 
addition to those contained in current law, to prevent the 
coercive use of compensatory time. The bill requires any 
arrangement for the use of compensatory time to be an express 
mutual agreement between the employer and the employee. In the 
case of employees 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 an individual employee, must be entered into knowingly and 
voluntarily by the employee, and may not be a condition of 
employment.
    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 the employee agrees to receive or receives 
compensatory time.
    An agreement for the use of compensatory time between an 
individual employee and his or her employer must be affirmed by 
a written or otherwise verifiable statement. The agreement must 
be made, kept, and preserved in accordance with the 
recordkeeping requirements under Section 11(c) of the Fair 
Labor Standards Act.\1\
---------------------------------------------------------------------------
    \1\29 U.S.C. Sec. 211(c).
---------------------------------------------------------------------------
    An employee could accrue up to 160 hours of compensatory 
time each year. Any accrued compensatory time that has not been 
used by the employee by the end of each year (or an 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, whether voluntary or involuntary. At any time, an 
employee may also submit a written request to receive monetary 
compensation for accrued compensatory time. In all cases, the 
compensatory time would be cashed out at either the regular 
rate received by the employee when the compensatory time was 
earned or at the final regular rate received by the employee, 
whichever is higher.
    An employee may submit a written request to withdraw from a 
compensatory time agreement with his or her employer at any 
time. Within 30 days of receiving such a request, the employer 
shall provide the employee with monetary compensation for the 
accrued compensatory time.
    A private-sector employer must provide an employee with 30 
days' notice prior to cashing out an employee's accrued 
compensatory time. However, an employer may only cash out 
compensatory time accrued by an employee in excess of 80 hours, 
unless the cash out is employee-initiated. A private-sector 
employer must also provide employees with 30 days' notice prior 
to discontinuing a policy of offering compensatory time to 
employees.
    Any accrued compensatory time would be considered to be the 
same as wages owed to the employee. For the purposes of 
enforcement, as with any other violation of the FLSA, all of 
the remedies under the law would apply. In addition, any 
employer who directly or indirectly intimidates, threatens, or 
coerces any employee into selecting compensatory time off 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 compensatory time already used by the employee.
    Finally, H.R. 1406 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.

                            Committee Views

                               BACKGROUND

    The FLSA was enacted in 1938.\2\ 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.\3\ Certain exceptions to the ``40-hour workweek'' are 
permitted, under Sections 7 and 13 of the FLSA,\4\ 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.\5\
---------------------------------------------------------------------------
    \2\29 U.S.C. Sec. Sec. 201-219.
    \3\29 U.S.C. Sec. 207.
    \4\29 U.S.C. Sec. Sec. 207, 213.
    \5\29 U.S.C. Sec. 213.
---------------------------------------------------------------------------
    Under the FLSA's overtime requirements, overtime pay for 
employees in the private-sector must be in the form of cash 
wages paid to the employee in his or her next paycheck. This is 
different than overtime requirements for employees in the 
public-sector. Section 7(o) of the FLSA, added to the law in 
1985, provides that state and local government employers may 
offer compensatory time at a rate not less than one and one-
half hours for each hour of employment for which overtime 
compensation is required, subject to regulatory requirements 
administered by the Department of Labor.\6\ While federal 
government employees may also earn compensatory time in lieu of 
overtime pay, their use of compensatory time is governed by the 
Federal Employees Flexible and Compressed Work Schedules Act of 
1978 and subject to regulatory requirements administered by the 
Office of Personnel Management.\7\
---------------------------------------------------------------------------
    \6\29 U.S.C. Sec. 207(o); 29 C.F.R. Sec. Sec. 553.20-553.28.
    \7\See 5 U.S.C. 5543, 6123; 5 C.F.R. 550.114, 551.531. Of 
particular note, federal government employees may generally earn one 
hour of compensatory time for each hour of overtime worked. See id. 
5543.
---------------------------------------------------------------------------
    This difference in treatment between the private- and 
public-sectors occurs because the public-sector compensatory 
time provisions were added nearly 50 years after the FLSA was 
originally written. As a result, the public-sector compensatory 
time provisions recognized the workplace and workforce had 
changed greatly since 1938. Specifically, in adding Section 
7(o) to the FLSA in 1985, Congress recognized that changes in 
the workplace and workforce led many state and local 
governments and their employees, prior to their being covered 
by the FLSA,\8\ to mutually agree upon forms of compensatory 
time. As the Senate Labor Committee explained regarding the 
inclusion of compensatory time for state and local governments 
in the 1985 amendments to the FLSA:
---------------------------------------------------------------------------
    \8\In Garcia v. San Antonio Metro. Transit Auth., 469 U.S. 528 
(1985), the Supreme Court held that state and local government 
employees were covered by the FLSA.

    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.\9\
---------------------------------------------------------------------------
    \9\Report on S. 1570, Committee on Labor and Human Resources, U.S. 
Senate, 99th Congress, First Session, Senate Report No. 99-159 at 8.

    The committee is certain that compensatory time can provide 
``mutually satisfactory solutions'' in the private-sector as 
well. Since the 104th Congress, the committee has heard 
compelling testimony from employees in the private-sector 
covered by the overtime protections of the FLSA who believe a 
change in the law to allow compensatory time would be 
beneficial.
    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.\10\
---------------------------------------------------------------------------
    \10\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 at 180-81.

    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 
---------------------------------------------------------------------------
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.\11\
---------------------------------------------------------------------------
    \11\Id. at 186.

    Ms. Deborah McKay, an Administrative Specialist, with PRC, 
Inc. explained why she would like to have the option of 
---------------------------------------------------------------------------
selecting compensatory time off 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.\12\
---------------------------------------------------------------------------
    \12\Id. at 416-17.

    Mr. Peter Faust of Clear Lake, Iowa, an hourly employee at 
a nonprofit facility for individuals who are mentally and/or 
physically disabled, described the difficulty he and his wife 
have when struggling to balance family responsibilities with 
work schedules and explained how additional time off would 
---------------------------------------------------------------------------
benefit 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?\13\
---------------------------------------------------------------------------
    \13\Hearing on H.R. 1, 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, Serial No. 105-1 at 17-18.

    Ms. Linda M. Smith, a medical staff credentialing 
coordinator and secretary at the Bascom Palmer Eye Institute in 
Miami, Florida, expressed ``wholehearted support'' for the 
development of a program that would allow the option of 
---------------------------------------------------------------------------
compensatory 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.\14\
---------------------------------------------------------------------------
    \14\Id. at 22.

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

    This schedule as an 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.\15\
---------------------------------------------------------------------------
    \15\Id. at 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.\16\
---------------------------------------------------------------------------
    \16\Hearing on H.R. 1119, 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, Serial No. 108-7 at 50.

    Ironically, employees classified as exempt under the FLSA 
are not so restricted by law and often are permitted by their 
employers to have more flexibility in their schedules than non-
exempt employees. But, the law has denied non-exempt employees 
---------------------------------------------------------------------------
this much-needed flexibility. As Ms. Robinson summarized:

    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.''\17\
---------------------------------------------------------------------------
    \17\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 at 181.

    Recently, Ms. Karen DeLoach, a bookkeeper from Montgomery, 
Alabama, shared her personal insight into the importance of 
allowing employees to choose between compensatory time and cash 
---------------------------------------------------------------------------
wages:

    You may wonder why compensatory time could matter to an 
empty-nester who seems to be in pretty good health. Why would I 
need more time off from work than the paid sick and vacation 
time that my employer agreed to allow annually? Well, I've 
learned in the last several years that there can still be many 
unforeseen needs in addition to any planned break from the 
routine.
    In the last three years, my mother, my brother, my father-
in-law and one of my sons-in-law have all passed away, some at 
relatively early ages. I am not getting any younger, and 
neither is the rest of the world so yes, I say again, time is 
precious to me. I would greatly appreciate the option at work 
to choose between being compensated in dollars or days.\18\
---------------------------------------------------------------------------
    \18\Hearing on H.R. 1406, Working Families Flexibility Act of 2013, 
before the Subcommittee on Workforce Protections, Committee on 
Education and the Workforce, U.S. House of Representatives, 113th 
Congress, First Session, April 11, 2013 (to be published) (emphasis in 
original).

    There is ample support for concluding that Ms. Robinson, 
Ms. Moneypenny, Ms. McKay, Mr. Faust, Ms. Smith, Ms. 
Korzendorfer, Ms. Martell, and Ms. DeLoach are not alone in 
their desire for the increased flexibility that would be 
provided by the Working Families Flexibility Act of 2013. As 
Ms. Juanita Phillips, Director of Human Resources at Intuitive 
Research and Technology Corporation in Huntsville, Alabama, 
---------------------------------------------------------------------------
testified before the subcommittee:

    The increased diversity and complexity within the American 
workforce--combined with global competition in a 24/7 economy--
is driving the need for more workplace flexibility. C-suite 
executives, for example, say the biggest threat to their 
organizations' success is attracting and retaining top talent. 
Human resource professionals believe the best way to attract 
and retain the best people is to provide workplace flexibility. 
Moreover, a large majority of employees--87 percent--report 
that flexibility in their jobs would be ``extremely'' or 
``very'' important in deciding whether to take a new job.\19\
---------------------------------------------------------------------------
    \19\Hearing on H.R. 1406, Working Families Flexibility Act of 2013, 
before the Subcommittee on Workforce Protections, Committee on 
Education and the Workforce, U.S. House of Representatives, 113th 
Congress, First Session, April 11, 2013 (to be published).

---------------------------------------------------------------------------
    As Ms. DeLoach put it most simply to the subcommittee:

    Right now, committee members, you have the ability to 
empower families across the nation with the freedom of choice. 
You could afford me the freedom to choose to use my overtime as 
leave time, while my coworker can still choose overtime pay, if 
she likes.\20\
---------------------------------------------------------------------------
    \20\Id.
---------------------------------------------------------------------------

          H.R. 1406, WORKING FAMILIES FLEXIBILITY ACT OF 2013

    H.R. 1406 amends the FLSA to permit employers in the 
private-sector to offer employees the voluntary option to 
receive overtime pay in the form of compensatory time off 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 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 
already the case when compensatory time is used in the public-
sector, the employee would be paid at his or her regular hourly 
rate of pay when the compensatory time is used.
    H.R. 1406 would not alter current use of compensatory time 
in the public-sector. Rather, the legislation seeks to extend 
the option of compensatory time in lieu of overtime 
compensation to private-sector employees (the same option 
federal, state, and local government employees have had for 
many years), which private-sector employees overwhelmingly 
support. The legislation includes numerous protections to 
ensure employees' choice and use of compensatory time are truly 
voluntary. Compensatory time, as provided in H.R. 1406, is not 
a mandate on employers or employees. H.R. 1406 simply gives 
private-sector employees and employers the opportunity to agree 
to this arrangement, an opportunity currently unavailable under 
the FLSA.

                      COMPENSATORY TIME AGREEMENT

    Under H.R. 1406, an employer and his or her employee must 
reach an express mutual agreement that overtime compensation 
will be in the form of compensatory time. If either the 
employee or the employer does not so agree, then the overtime 
compensation must be in the form of cash wages.
    The agreement between the employer and employee must be 
reached prior to the performance of the work for which the 
compensatory time 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 that has been recognized or 
certified under applicable law, H.R. 1406 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 an employee is not represented by a recognized or 
certified labor organization, the agreement must be made 
between the employer and the individual employee. The bill 
specifies 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.
    The bill also requires the agreement on compensatory time 
between the employer and the individual employee 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 the agreement 
could be purely oral with no contemporaneous record kept. To 
further ensure compensatory time agreements are authentic, H.R. 
1406 provides, pursuant to the general recordkeeping authority 
of the FLSA, the Secretary of Labor has authority to prescribe 
the information that the records of such agreements must 
include and the period of time the records should be maintained 
by the employer.\21\
---------------------------------------------------------------------------
    \21\29 U.S.C. Sec. 211(c).
---------------------------------------------------------------------------
    An individual employee's voluntary agreement to choose 
compensatory time in lieu of cash overtime pay is further 
protected by provisions in the bill allowing an employee to 
withdraw from such an agreement at anytime. Thus, an employee 
who agrees 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 wages.
    As is the case with public-sector compensatory time, H.R. 
1406 does not require the same agreement be entered with every 
employee, or that the employer agree to offer compensatory time 
to all employees.\22\ Opponents of compensatory time have 
claimed this allows an employer to unfairly single out 
employees and force them to take compensatory time in lieu of 
cash wages 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.\23\
---------------------------------------------------------------------------
    \22\29 C.F.R. Sec. 553.23(c) (``An employer need not adopt the same 
agreement or understanding with different employees and need not 
provide compensatory time to all employees.'').
    \23\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, 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, Serial No. 
105-1.
---------------------------------------------------------------------------
    The opponents of compensatory time have argued it should be 
denied to employees in the private-sector, but if compensatory 
time must be allowed, then ``low-wage'' workers and certain 
occupations (e.g., temporary, seasonal, or part-time 
occupations) should be excluded. The committee believes many 
workers who likely would be included in a national definition 
of ``low-wage'' want the option of compensatory time--and 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 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. 1406.\24\ 
Further, the requirement for mutual agreement by the employer 
and the employee and the employee protections in the bill 
ensure compensatory time is voluntary. The committee sees no 
reason to deny certain employees the option of compensatory 
time, based solely upon their level of income or their 
occupation.
---------------------------------------------------------------------------
    \24\See 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, Serial No. 105-1.
---------------------------------------------------------------------------

                    CONDITIONS ON COMPENSATORY TIME

    The committee intends that compensatory time to be a matter 
of agreement between employers and employees. To that end, the 
law should permit employers and employees some flexibility in 
structuring compensatory time arrangements. H.R. 1406 provides 
certain parameters for such compensatory time arrangements, 
primarily to ensure employees are fully protected. These 
parameters 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 H.R. 1406. To the 
extent any provision of an agreement is in violation of H.R. 
1406, the provision would be superseded by the requirements of 
the FLSA.\25\
---------------------------------------------------------------------------
    \25\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).
---------------------------------------------------------------------------

Employee eligibility requirements

    To be eligible to choose compensatory time, an employee 
must have worked at least 1,000 hours in a period of continuous 
employment with his or her employer during the 12-month period 
preceding the date the employee agrees to receive or receives 
compensatory time. 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 compensatory time in lieu of cash 
compensation for overtime, such 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 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 the employer).

Compensatory time accrual limit

    H.R. 1406 provides an employee may accrue no more than 160 
hours of compensatory time. This is in contrast to the public-
sector provisions in current law that allow most employees to 
accrue 240 hours of compensatory time (in some occupations, 
employees may accrue up to 480 hours). 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 this 160-hour limit is the legal 
maximum that may be accrued. Employers and employees may 
establish a lower limit for compensatory time accrual, and 
employees, of course, may decline compensatory time as payment 
for overtime altogether.

Monetary compensation for unused compensatory time

    The bill requires an annual ``cash out'' of all accrued 
compensatory time. Such annual cash out 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 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 an employee's ability to cash out 
accrued compensatory time.
    As described above, an employee who has an individual 
agreement with his or her 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.
    Upon the voluntary or involuntary termination of 
employment, the bill provides an employee's unused compensatory 
time must be cashed out by the employer, and is to be treated 
as a wage payment due and owed to the employee. The bill 
further provides any payment owed to an employee or former 
employee (whether because of the annual cash out of all accrued 
compensatory time, the employee's request to cash out accrued 
compensatory time, the employer's decision to cash out certain 
accrued compensatory time as described above, or the voluntary 
or involuntary termination of employment) shall be considered 
unpaid overtime compensation owed to the employee. In addition 
to making explicit that the remedies for unpaid overtime 
compensation under the FLSA apply, this provision also assures 
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 as of that date.
    In all cases of cashed out accrued compensatory time, the 
rate of cash out must be the employee's regular rate when the 
compensatory time was earned or the employee's final regular 
rate, whichever is higher. 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 
after the compensatory time is accrued, 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.

                          NOTICE TO EMPLOYEES

    H.R. 1406 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 ensure employees are informed of the circumstances under 
which compensatory time may be offered by an employer, as well 
as the employees' right to accept or decline such offer, and 
the employees' rights regarding the use of compensatory time. 
The Secretary of Labor may also promulgate such regulations as 
necessary in order to implement the provisions of H.R. 1406.

               COMPENSATORY TIME AND EMPLOYMENT BENEFITS

    Opponents of H.R. 1406 have raised concerns that 
compensatory time would reduce an employee's pension benefits. 
These concerns are unfounded. The overtime hours for which an 
employee receives compensatory time are hours for which the 
employee is paid or entitled to pay for the performance of 
duties for the employer. Therefore, they would fall within the 
definition of ``hours of service'' under the Employee 
Retirement Income Security Act, for which the employee would be 
credited for purposes of accrual, participation, and vesting of 
benefits.\26\
---------------------------------------------------------------------------
    \26\29 C.F.R. Sec. 2530.200b-2.
---------------------------------------------------------------------------
    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) compensatory time off. Thus, the 
employee's total hours worked may be reduced, not by the 
earning of compensatory time, but by substituting the 
compensatory time for other hours of work. If, as a result, the 
employee works fewer 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 
elected to receive a benefit that enables them to spend more 
time with their family or for whatever purpose they wish, which 
is not available to employees who elected to receive cash 
wages.
    Similarly, opponents are concerned that compensatory time 
could limit an employee's eligibility for unemployment 
benefits, or the amount of unemployment benefits to which the 
employee would be entitled. H.R. 1406 clearly treats 
compensatory time as employee wages and any payments for 
accrued compensatory time would be treated the same as 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. However, to 
suggest, as some have, compensatory time payments should not be 
considered as wages in any unemployment benefit determination 
would turn existing federal policy on ``disqualifying income'' 
on its head by dictating to states how to treat this form of 
employee wages.

               EMPLOYEE USE OF ACCRUED COMPENSATORY TIME

    Under H.R. 1406, an employee who has accrued compensatory 
time may generally use the time whenever he or she so desires. 
However, the legislation does require an employee to provide 
his or her employer with a reasonable amount of notice prior to 
using compensatory time, and the employer in permitted under 
H.R. 1406 to deny the employee's request if the use of time off 
would ``unduly disrupt'' the operations of the business. It is 
the committee's intent that an employer shall grant the 
employee's request to use accrued compensatory time off 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 
operations, 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 for the public-sector 
under Section 7(o) of the FLSA.\27\ Regulations issued by the 
Department of Labor under Section 7(o) define ``unduly 
disrupt'' as follows:
---------------------------------------------------------------------------
    \27\29 U.S.C. Sec. 207(o)(5).

    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.\28\
---------------------------------------------------------------------------
    \28\29 C.F.R. Sec. 553.25(d); see also Department of Labor, Wage 
and Hour Opinion Letter, 1994 DOLWH LEXIS 71 (Aug. 19, 1994) (``It is 
our position, notwithstanding [a collective bargaining agreement to the 
contrary], that an agency may not turn down a request from an employee 
for compensatory time off unless it would impose an unreasonable burden 
on the agency's ability to provide service of acceptable quality and 
quantity for the public during the time requested without the use of 
the employee's service. The fact that overtime may be required of one 
employee to permit another employee to use compensatory time off would 
not be a sufficient reason for an employer to claim that the 
compensatory time off request is unduly disruptive.'').

    Court decisions regarding public-sector compensatory time 
have also shown the ``unduly disrupt'' standard is narrow and 
does not allow an employer to control an employee's use of 
compensatory time off. In Heitmann v. City of Chicago, the 
Seventh Circuit Court of Appeals found Section 7(o) of the FLSA 
and the Department of Labor's corresponding regulations require 
an employer to grant compensatory time off on the date and time 
requested by an employee, unless doing so would cause undue 
disruption.\29\ The court noted that requiring an employer to 
honor an employee's specific request for compensatory time off, 
absent undue disruption of the employer's operations, 
appropriately ``makes compensatory leave more attractive to 
workers and hence a more adequate substitute for money, the 
Fair Labor Standards Act's principal response to overtime 
work.''\30\
---------------------------------------------------------------------------
    \29\560 F.3d 642, 646 (7th Cir. 2009). But see Mortensen v. County 
of Sacramento, 368 F.3d 298 (9th Cir. 2004) (finding that the public-
sector compensatory time provisions require only that an employee be 
allowed to use compensatory time off within a ``reasonable period'' of 
the date requested for such leave, unless doing so would ``unduly 
disrupt'' the agency's operations); Houston Policy Officers Union v. 
City of Houston, 330 F.3d 298 (5th Cir. 2003) (same).
    \30\Heitmann, 560 F.3d at 647.
---------------------------------------------------------------------------
    Similarly, in Beck v. City of Cleveland, the Sixth Circuit 
Court of Appeals found ``to grant the City the unlimited 
discretion to deny compensatory leave requests relieves the 
City of establishing the undue disruption requirement imposed 
by Congress.''\31\ As a result, the court held that the 
plaintiffs-police officers' ``compensatory leave requests must 
be granted absent `clear and affirmative evidence' of an undue 
disruption of the City's provision of police services for its 
citizens.''\32\
---------------------------------------------------------------------------
    \31\390 F.3d 912, 925 (6th Cir. 2005).
    \32\Id. at Sec. 926; see also DeBraska v. City of Milwaukee, 131 F. 
Supp. 2d 1032 (E.D. Wis. 2000) (deferring to the Department of Labor's 
interpretation of its regulations as requiring that an employee's 
specific compensatory time off requested must be granted absent undue 
disruption of the employer's operations).
---------------------------------------------------------------------------
    The committee also notes the ``unduly disrupt'' standard 
included in H.R. 1406 is similar to the standard in the Family 
and Medical Leave Act (FMLA) limiting 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 . . .'').\33\
---------------------------------------------------------------------------
    \33\29 U.S.C. Sec. 2612(e). As one district court said in 
construing these provisions of the FMLA, ``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 
inclusion of similar language in the FMLA, it is simply 
dishonest for opponents of private-sector use of compensatory 
time to claim H.R. 1406 allows the employer to control when 
compensatory time is used. The employer's right to deny 
compensatory time under H.R. 1406 is very limited. But the 
employer must have some ability to maintain the operations of 
the business. If that ability is not reflected in the law, then 
no employer will offer compensatory time as an option for 
employees, and the committee's efforts to respond to employees' 
desires for flexibility will be in vain. Furthermore, providing 
for an employee's use of compensatory time without any regard 
to workload or business demands is simply unfair to the 
employee's coworkers, who in many cases would have to handle 
the workload of the absent employee. Just as in 1985 when 
public-sector workers were permitted to use compensatory time 
in lieu of overtime pay, H.R. 1406 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.''\34\
---------------------------------------------------------------------------
    \34\Report on S. 1570, Committee on Labor and Human Resources, U.S. 
Senate, 99th Congress, First Session, Senate Report No. 99-159 at 11.
---------------------------------------------------------------------------

                        ENFORCEMENT AND REMEDIES

    As an amendment to the FLSA, the compensatory time 
provisions in H.R. 1406 would be subject to the applicable 
enforcement and remedies of the FLSA. Currently under the FLSA, 
Section 15(a)(2) makes it unlawful for any person to violate 
any provision of Section 7, of which the compensatory time 
provisions of H.R. 1406 would be a part.\35\ 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.\36\
---------------------------------------------------------------------------
    \35\29 U.S.C. Sec. 215(a)(2).
    \36\Id. 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.\37\ The suit may be filed in any federal or state 
court. An employee may also file a complaint with the 
Department of Labor. The Department of Labor generally attempts 
to resolve such complaints; however, the department may also 
sue the employer for damages on behalf of the employee or 
employees whose rights were violated, or may also seek 
injunctive relief.\38\ Section 16(e) also authorizes the 
Secretary of Labor to seek civil penalties of up to $1,100 per 
violation against an employer who ``willfully or repeatedly'' 
violates Section 7.\39\ 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;\40\ liquidated damages may be reduced or 
eliminated if the court finds that the employer acted in good 
faith and had reasonable grounds for believing he or she was in 
compliance with the FLSA.\41\ In any action brought by an 
employee, the employee may also be paid for his or her 
attorneys' fees and costs.\42\
---------------------------------------------------------------------------
    \37\Id. 216(b).
    \38\Id. Sec. 217.
    \39\Id. Sec. 216(e).
    \40\Id. Sec. 216(b).
    \41\Id. Sec. 260.
    \42\Id. Sec. 216(b).
---------------------------------------------------------------------------
    To be clear, H.R. 1406 retains all of the enforcement 
mechanisms and remedies that currently exist under the FLSA. 
H.R. 1406 also includes a provision prohibiting 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. Curiously, opponents of 
compensatory time have claimed H.R. 1406 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 contradict the direct language of the 
bill.
    The language of H.R. 1406 prohibiting intimidation, 
threats, and coercion, or attempts thereto, is identical to 
prohibitory language applicable to federal employees under the 
FMLA\43\ and the Federal Employees Flexible and Compressed Work 
Schedules Act.\44\ 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).''\45\ Thus, H.R. 1406 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.
---------------------------------------------------------------------------
    \43\5 U.S.C. Sec. 6385.
    \44\Id. Sec. 6132.
    \45\Id. Sec. 6385.
---------------------------------------------------------------------------
    The bill also creates a new remedy under the FLSA 
applicable to employers who violate the anti-coercion language 
just described. Section 3 of H.R. 1406 provides 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 accrued 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, while it may 
be prohibited conduct under H.R. 1406, there is no sanction in 
H.R. 1406 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, the opponents are 
wrong. An employee who is forced to take compensatory time off 
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. The 
committee expects the department will make use of the 
regulatory process to clarify the application of the remedies 
provisions contained in H.R. 1406 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 his or her 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 when necessary, there are effective 
sanctions under the bill and the FLSA for employers who violate 
the employee protections and other provisions of H.R. 1406.

                               CONCLUSION

    For many Americans, balancing the demands of family and 
work can be difficult. Each worker faces a unique set of 
challenges and responsibilities, be it caring for an aging 
relative, attending a parent-teacher conference, or seeing a 
son or daughter deploy overseas. Government employees have long 
been able to choose and accrue paid time off as compensation 
for working overtime hours, allowing these public-sector 
employees greater flexibility to meet family obligations. 
However, the federal government prohibits private-sector 
workers from enjoying this same benefit. H.R. 1406, the Working 
Families Flexibility Act of 2013, would remove this obstacle in 
federal law.
    Opponents of H.R. 1406 continue to ignore the legislation's 
basic principle: worker choice. Under the legislation, workers 
choose whether to accept compensatory time; workers choose when 
to withdraw from a compensatory time agreement; workers choose 
when to cash out accrued compensatory time; and workers choose 
when to use their paid time off so long as they follow the same 
guidelines as public employees do. The Working Families 
Flexibility Act of 2013 is commonsense, pro-worker legislation 
that will help Americans better balance the needs of family and 
the workplace.

                      Section-by-Section Analysis

                         SECTION 1. SHORT TITLE

    This Act may be cited as the ``Working Families Flexibility 
Act of 2013.''

                      SECTION 2. COMPENSATORY TIME

    In lieu of monetary overtime compensation, an employee may 
receive compensatory time off at a rate not less than one and 
one-half hours for each hour of overtime worked.
    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 that 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 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. No 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 and 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 who 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 and not yet 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 who 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.
    For the purposes of this subsection, the term ``employee'' 
does not include an employee of a public agency.
    For the purposes of this subsection, the terms ``overtime 
compensation'' and ``compensatory time'' shall have the 
meanings given by Section (7)(o)(7) of the Fair Labor Standards 
Act.

                          SECTION 3. REMEDIES

    An employer who 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 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 amendments, including the amendment in the nature of a 
substitute, are explained in the body of this report.

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. H.R. 1406 provides for compensatory time for employees 
in the private-sector.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement of 
whether the provisions of the reported bill include unfunded 
mandates. This issue is addressed in the CBO letter.

                           Earmark Statement

    H.R. 1406 does not contain any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of House Rule XXI.

                            Roll Call Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee Report to include for 
each record vote on a motion to report the measure or matter 
and on any amendments offered to the measure or matter the 
total number of votes for and against and the names of the 
Members voting for and against.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c) of House Rule XIII, the goal 
of H.R. 1406 is to provide for compensatory time for employees 
in the private-sector. The Committee expects the Department of 
Labor to comply with these provisions and implement the changes 
to the law in accordance with this stated goal.

                    Duplication of Federal Programs

    No provision of H.R. 1406 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The committee estimates that enacting H.R. 1406 does not 
specifically direct the completion of any specific rule makings 
within the meaning of 5 U.S.C. 551.

  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.

               New Budget Authority and CBO Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause 3(c)(3) of rule XIII of the Rules of 
the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following estimate for H.R. 1406 from the Director of the 
Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, April 19, 2013.
Hon. John Kline,
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. 1406, the Working 
Families Flexibility Act of 2013.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Anthony.
            Sincerely,
                                    Douglas W. Elmendorf, Director.
    Enclosure.

H.R. 1406--Working Families Flexibility Act of 2013

    H.R. 1406 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 have been required. Such compensatory time could be 
provided only in accordance with a collective bargaining 
agreement or with the consent of affected employees. The 
changes would be effective for five years after enactment of 
the bill.
    Enacting H.R. 1406 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. 
Implementing the bill also would not affect spending subject to 
appropriation.
    H.R. 1406 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 
Anthony. The estimate was approved by Peter H. Fontaine, 
Assistant Director for Budget Analysis.

                        Committee Cost Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison of the 
costs that would be incurred in carrying out H.R. 1406. 
However, clause 3(d)(2)(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 (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

                    FAIR LABOR STANDARDS ACT OF 1938

           *       *       *       *       *       *       *
                             MAXIMUM HOURS

  Sec. 7. (a)(1) Except as otherwise provided in this section, 
no employer shall employ any of his employees who in any 
workweek is engaged in commerce or in the production of goods 
for commerce, or is employed in an enterprise engaged in 
commerce or in the production of goods for commerce, for a 
workweek longer than forty hours unless such employee receives 
compensation for his employment in excess of the hours above 
specified at a rate not less than one and one-half times the 
regular rate at which he is employed.
  (2) No employer shall employ any of his employees who in any 
workweek is engaged in commerce or in the production of goods 
for commerce, or is employed in an enterprise engaged in 
commerce or in the production of goods for commerce, and who in 
such workweek is brought within the purview of this subsection 
by the amendments made to this Act by the Fair Labor Standards 
Amendments of 1966--
          (A) for a workweek longer than forty-four hours 
        during the first year from the effective date of the 
        Fair Labor Standards Amendments of 1966,
          (B) for a workweek longer than forty-two hours during 
        the second year from such date, or
          (C) for a workweek longer than forty hours after the 
        expiration of the second year from such date,
unless such employee receives compensation for his employment 
in excess of the hours above specified at a rate not less than 
one and one-half times the regular rate at which he is 
employed.
  (b) No employer shall be deemed to have violated subsection 
(a) by employing any employee for a workweek in excess of that 
specified in such subsection without paying the compensation 
for overtime employment prescribed therein if such employee is 
so employed--
          (1) in pursuance of an agreement, made as a result of 
        collective bargaining by representatives of employees 
        certified as bona fide by the National Labor Relations 
        Board, which provides that no employee shall be 
        employed more than one thousand and forty hours during 
        any period of twenty-six consecutive weeks, or
          (2) in pursuance of an agreement, made as a result of 
        collective bargaining by representatives of employees 
        certified as bona fide by the National Labor Relations 
        Board which provides that during a specified period of 
        fifty-two consecutive weeks the employee shall be 
        employed not more than two thousand two hundred and 
        forty hours and shall be guaranteed not less than one 
        thousand eight hundred and forty hours (or not less 
        than forty-six weeks at the normal number of hours 
        worked per week, but not less than thirty hours per 
        week) and not more than two thousand and eighty hours 
        of employment for which he shall receive compensation 
        for all hours guaranteed or worked at rates not less 
        than those applicable under the agreement to the work 
        performed and for all hours in excess of the guaranty 
        which are also in excess of the maximum workweek 
        applicable to such employee under subsection (a) or two 
        thousand and eighty in such period at rates not less 
        than one and one-half times the regular rate at which 
        he is employed; or
          (3) by an independently owned and controlled local 
        enterprise (including an enterprise with more than one 
        bulk storage establishment) engaged in the wholesale or 
        bulk distribution of petroleum products if--
                  (A) the annual gross volume of sales of such 
                enterprise is less than $1,000,000 exclusive of 
                excise taxes.
                  (B) more than 75 per centum of such 
                enterprise's annual dollar volume of sales is 
                made within the State in which such enterprise 
                is located, and
                  (C) not more than 25 per centum of the annual 
                dollar volume of sales of such enterprise is to 
                customers who are engaged in the bulk 
                distribution of such products for resale;
and if such employee receives compensation for employment in 
excess of twelve hours in any workday, or for employment in 
excess of fifty-six hours in any workweek, as the case may be, 
at a rate not less than one and one-half times the regular rate 
at which he is employed.
  (e) As used in this section the ``regular rate'' at which an 
employee is employed shall be deemed to include all 
remuneration for employment paid to, or on behalf of, the 
employee, but shall not be deemed to include--
          (1) sums paid as gifts; payments in the nature of 
        gifts made at Christmas time or on other special 
        occasions, as a reward for service, the amounts of 
        which are not measured by or dependent on hours worked, 
        production, or efficiency;
          (2) payments made for occasional periods when no work 
        is performed due to vacation, holiday, illness, failure 
        of the employer to provide sufficient work or other 
        similar cause; reasonable payments for traveling 
        expenses, or other expenses, incurred by an employee in 
        the furtherance of his employer's interests and 
        properly reimburseable by the employer; and other 
        similar payments to any employee which are not made as 
        compensation for his hours of employment;
          (3) sums paid in recognition of services performed 
        during a given period if either, (a) both the fact that 
        payment is to be made and the amount of the payment are 
        determined at the sole discretion of the employer at or 
        near the end of the period and not pursuant to any 
        prior contract, agreement, or promise causing the 
        employee to expect such payments regularly; or (b) the 
        payments are made pursuant to a bona fide profit-
        sharing plan or trust or bona fide thrift or savings 
        plan, meeting the requirements of the Secretary of 
        Labor set forth in appropriate regulations which he 
        shall issue, having due regard among other relevant 
        facts, to the extent to which the amounts paid to the 
        employee are determined without regard to hours of 
        work, production, or efficiency; or (c) the payments 
        are talent fees (as such talent fees are defined and 
        delimited by regulations of the Secretary) paid to 
        performers, including announcers, on radio and 
        television programs;
          (4) contributions irrevocably made by an employer to 
        a trustee or third person pursuant to a bona fide plan 
        for providing old-age retirement, life, accident, or 
        health insurance or similar benefits for employees;
          (5) extra compensation provided by a premium rate 
        paid for certain hours worked by the employee in any 
        day or workweek because such hours are hours worked in 
        excess of eight in a day or in excess of the maximum 
        workweek applicable to such employee under subsection 
        (a) or in excess of the employee's normal working hours 
        or regular working hours, as the case may be;
          (6) extra compensation provided by a premium rate 
        paid for work by the employee on Saturdays, Sundays, 
        holidays, or regular days of rest, or on the sixth or 
        seventh day of the workweek, where such premium rate is 
        not less than one and one-half times the rate 
        established in good faith for like work performed in 
        nonovertime hours on other days;
          (7) extra compensation provided by a premium rate 
        paid to the employee, in pursuance of an applicable 
        employment contract or collective-bargaining agreement, 
        for work outside of the hours established in good faith 
        by the contract or agreement as the basic, normal, or 
        regular workday (not exceeding eight hours) or workweek 
        (not exceeding the maximum workweek applicable to such 
        employee under subsection (a)), where such premium rate 
        is not less than one and one-half times the rate 
        established in good faith by the contract or agreement 
        for like work performed during such workday or 
        workweek; or
          (8) any value or income derived from employer-
        provided grants or rights provided pursuant to a stock 
        option, stock appreciation right, or bona fide employee 
        stock purchase program which is not otherwise 
        excludable under any of paragraphs (1) through (7) if--
                  (A) grants are made pursuant to a program, 
                the terms and conditions of which are 
                communicated to participating employees either 
                at the beginning of the employee's 
                participation in the program or at the time of 
                the grant;
                  (B) in the case of stock options and stock 
                appreciation rights, the grant or right cannot 
                be exercisable for a period of at least 6 
                months after the time of grant (except that 
                grants or rights may become exercisable because 
                of an employee's death, disability, retirement, 
                or a change in corporate ownership, or other 
                circumstances permitted by regulation), and the 
                exercise price is at least 85 percent of the 
                fair market value of the stock at the time of 
                grant;
                  (C) exercise of any grant or right is 
                voluntary; and
                  (D) any determinations regarding the award 
                of, and the amount of, employer-provided grants 
                or rights that are based on performance are--
                          (i) made based upon meeting 
                        previously established performance 
                        criteria (which may include hours of 
                        work, efficiency, or productivity) of 
                        any business unit consisting of at 
                        least 10 employees or of a facility, 
                        except that, any determinations may be 
                        based on length of service or minimum 
                        schedule of hours or days of work; or
                          (ii) made based upon the past 
                        performance (which may include any 
                        criteria) of one or more employees in a 
                        given period so long as the 
                        determination is in the sole discretion 
                        of the employer and not pursuant to any 
                        prior contract.
  (f) No employer shall be deemed to have violated subsection 
(a) by employing any employee for a workweek in excess of the 
maximum workweek applicable to such employee under subsection 
(a) if such employee is employed pursuant to a bona fide 
individual contract, or pursuant to an agreement made as a 
result of collective bargaining by representatives of 
employees, if the duties of such employee necessitate irregular 
hours of work, and the contract or agreement (1) specifies a 
regular rate of pay of not less than the minimum hourly rate 
provided in subsection (a) or (b) of section 6 (whichever may 
be applicable) and compensation at not less than one and one-
half times such rate for all hours worked in excess of such 
maximum workweek, and (2) provides a weekly guaranty of pay for 
not more than sixty hours based on the rates so specified.
  (g) No employer shall be deemed to have violated subsection 
(a) by employing any employee for a workweek in excess of the 
maximum workweek applicable to such employee under such 
subsection if, pursuant to an agreement or understanding 
arrived at between the employer and the employee before 
performance of the work, the amount paid to the employee for 
the number of hours worked by him in such workweek in excess of 
the maximum workweek applicable to such employee under such 
subsection--
          (1) in the case of an employee employed at piece 
        rates, is computed at piece rates not less than one and 
        one-half times the bona fide piece rates applicable to 
        the same work when performed during nonovertime hours; 
        or
          (2) in the case of an employee performing two or more 
        kinds of work for which different hourly or piece rates 
        have been established, is computed at rates not less 
        than one and one-half times such bona fide rates 
        applicable to the same work when performed during 
        nonovertime hours; or
          (3) is computed at a rate not less than one and one-
        half times the rate established by such agreement or 
        understanding as the basic rate to be used in computing 
        overtime compensation thereunder: Provided, That the 
        rate so established shall be authorized by regulation 
        by the Secretary of Labor as being substantially 
        equivalent to the average hourly earnings of the 
        employee, exclusive of overtime premiums, in the 
        particular work over a representative period of time;
and if (i) the employee's average hourly earnings for the 
workweek exclusive of payments described in paragraphs (1) 
through (7) of subsection (e) are not less than the minimum 
hourly rate required by applicable law, and (ii) extra overtime 
compensation is properly computed and paid on other forms of 
additional pay required to be included in computing the regular 
rate.
  (h)(1) Except as provided in paragraph (2), sums excluded 
from the regular rate pursuant to subsection (e) shall not be 
creditable toward wages required under section 6 or overtime 
compensation required under this section.
  (2) Extra compensation paid as described in paragraphs (5), 
(6), and (7) of subsection (e) shall be creditable toward 
overtime compensation payable pursuant to this section.
  (i) No employer shall be deemed to have violated subsection 
(a) by employing any employee of a retail or service 
establishment for a workweek in excess of the applicable 
workweek specified therein, if (1) the regular rate of pay of 
such employee is in excess of one and one-half times the 
minimum hourly rate applicable to him under section 6, and (2) 
more than half his compensation for a representative period 
(not less than one month) represents commissions on goods or 
services. In determining the proportion of compensation 
representing commissions, all earnings resulting from the 
application of a bona fide commission rate shall be deemed 
commissions on goods or services without regard to whether the 
computed commissions exceed the draw or guarantee.
  (j) No employer engaged in the operation of a hospital or an 
establishment which is an institution primarily engaged in the 
care of the sick, the aged, or the mentally ill or defective 
who reside on the premises shall be deemed to have violated 
subsection (a) if, pursuant to an agreement or understanding 
arrived at between the employer and the employee before 
performance of the work, a work period of fourteen consecutive 
days is accepted in lieu of the workweek of seven consecutive 
days for purposes of overtime computation and if, for his 
employment in excess of eight hours in any workday and in 
excess of eighty hours in such fourteen-day period, the 
employee receives compensation at a rate of not less than one 
and one-half times the regular rate at which he is employed.
  (k) No public agency shall be deemed to have violated 
subsection (a) with respect to the employment of any employee 
in fire protection activities or any employee in law 
enforcement activities (including security personnel in 
correctional institutions) if--
          (1) in a work period of 28 consecutive days the 
        employee receives for tours of duty which in the 
        aggregate exceed the lesser of (A) 216 hours, or (B) 
        the average number of hours (as determined by the 
        Secretary pursuant to section 6(c)(3) of the Fair Labor 
        Standards Amendments of 1974) in tours of duty of 
        employees engaged in such activities in work periods of 
        28 consecutive days in calendar year 1975; or
          (2) in the case of such employee to whom a work 
        period of at least 7 but less than 28 days applies, in 
        his work period the employee receives for tours of duty 
        which in the aggregate exceed a number of hours which 
        bears the same ratio to the number of consecutive days 
        in his work period as 216 hours (or if lower, the 
        number of hours referred to in clause (B) of paragraph 
        (1)) bears to 28 days;
compensation at a rate not less than one and one-half times the 
regular rate at which he is employed.
  (l) No employer shall employ any employee in domestic service 
in one or more households for a workweek longer than forty 
hours unless such employee receives compensation for such 
employment in accordance with subsection (a).
  (m) For a period or periods of not more than fourteen 
workweeks in the aggregate in any calendar year, any employer 
may employ any employee for a workweek in excess of that 
specified in subsection (a) without paying the compensation for 
overtime employment prescribed in such subsection, if such 
employee--
          (1) is employed by such employer--
                  (A) to provide services (including stripping 
                and grading) necessary and incidental to the 
                sale at auction of green leaf tobacco of type 
                11, 12, 13, 14, 21, 22, 23, 24, 31, 35, 36, or 
                37 (as such types are defined by the Secretary 
                of Agriculture), or in auction sale, buying, 
                handling, stemming, redrying, packing, and 
                storing of such tobacco,
                  (B) in auction sale, buying, handling, 
                sorting, grading, packing, or storing green 
                leaf tobacco of type 32 (as such type is 
                defined by the Secretary of Agriculture), or
                  (C) in auction sale, buying, handling, 
                stripping, sorting, grading, sizing, packing, 
                or stemming prior to packing, of perishable 
                cigar leaf tobacco of type 41, 42, 43, 44, 45, 
                46, 51, 52, 53, 54, 55, 61, or 62 (as such 
                types are defined by the Secretary of 
                Agriculture); and
          (2) receives for--
                  (A) such employment by such employer which is 
                in excess of ten hours in any workday, and
                  (B) such employment by such employer which is 
                in excess of forty-eight hours in any workweek,
        compensation at a rate not less than one and one-half 
        times the regular rate at which he is employed.
An employer who receives an exemption under this subsection 
shall not be eligible for any other exemption under this 
section.
  (n) In the case of an employee of an employer engaged in the 
business of operating a street, suburban or interurban electric 
railway or local trolley or motorbus carrier (regardless of 
whether or not such railway or carrier is public or private or 
operated for profit or not for profit), in determining the 
hours of employment of such an employee to which the rate 
prescribed by subsection (a) applies there shall be excluded 
the hours such employee was employed in charter activities by 
such employer if (1) the employee's employment in such 
activities was pursuant to an agreement or understanding with 
his employer arrived at before engaging in such employment, and 
(2) if employment in such activities is not part of such 
employee's regular employment.
  (o)(1) Employees of a public agency which is a State, a 
political subdivision of a State, or an interstate governmental 
agency may receive, in accordance with this subsection and in 
lieu of 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) A public agency may provide compensatory time under 
paragraph (1) only--
          (A) pursuant to--
                  (i) applicable provisions of a collective 
                bargaining agreement, memorandum of 
                understanding, or any other agreement between 
                the public agency and representatives of such 
                employees; or
                  (ii) in the case of employees not covered by 
                subclause (i), an agreement or understanding 
                arrived at between the employer and employee 
                before the performance of the work; and
          (B) if the employee has not accrued compensatory time 
        in excess of the limit applicable to the employee 
        prescribed by paragraph (3).
In the case of employees described in clause (A)(ii) hired 
prior to April 15, 1986, the regular practice in effect on 
April 15, 1986, with respect to compensatory time off for such 
employees in lieu of the receipt of overtime compensation, 
shall constitute an agreement or understanding under such 
clause (A)(ii). Except as provided in the previous sentence, 
the provision of compensatory time off to such employees for 
hours worked after April 14, 1986, shall be in accordance with 
this subsection.
  (3)(A) If the work of an employee for which compensatory time 
may be provided included work in a public safety activity, an 
emergency response activity, or a seasonal activity, the 
employee engaged in such work may accrue not more than 480 
hours of compensatory time for hours worked after April 15, 
1986. If such work was any other work, the employee engaged in 
such work may accrue not more than 240 hours of compensatory 
time for hours worked after April 15, 1986. Any such employee 
who, after April 15, 1986, has accrued 480 or 240 hours, as the 
case may be, of compensatory time off shall, for additional 
overtime hours of work, be paid overtime compensation.
  (B) If compensation is paid to an employee for accrued 
compensatory time off, such compensation shall be paid at the 
regular rate earned by the employee at the time the employee 
receives such payment.
  (4) An employee who has accrued compensatory time off 
authorized to be provided under paragraph (1) shall, upon 
termination of employment, be paid for the unused compensatory 
time at a rate of compensation not less than--
          (A) the average regular rate received by such 
        employee during the last 3 years of the employee's 
        employment, or
          (B) the final regular rate received by such employee,
whichever is higher
  (5) An employee of a public agency which is a State, 
political subdivision of a State, or an interstate governmental 
agency--
          (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 public agency.
  (6) The hours an employee of a public agency performs court 
reporting transcript preparation duties shall not be considered 
as hours worked for the purposes of subsection (a) if--
          (A) such employee is paid at a per-page rate which is 
        not less than--
                  (i) the maximum rate established by State law 
                or local ordinance for the jurisdiction of such 
                public agency,
                  (ii) the maximum rate otherwise established 
                by a judicial or administrative officer and in 
                effect on July 1, 1995, or
                  (iii) the rate freely negotiated between the 
                employee and the party requesting the 
                transcript, other than the judge who presided 
                over the proceedings being transcribed, and
          (B) the hours spent performing such duties are 
        outside of the hours such employee performs other work 
        (including hours for which the agency requires the 
        employee's attendance) pursuant to the employment 
        relationship with such public agency.
For purposes of this section, the amount paid such employee in 
accordance with subparagraph (A) for the performance of court 
reporting transcript preparation duties, shall not be 
considered in the calculation of the regular rate at which such 
employee is employed.
  (7) For purposes of this subsection--
          (A) the term ``overtime compensation'' means the 
        compensation required by subsection (a), and
          (B) the terms ``compensatory time'' and 
        ``compensatory time off'' mean hours during which an 
        employee is not working, which are not counted as hours 
        worked during the applicable workweek or other work 
        period for purposes of overtime compensation, and for 
        which the employee is compensated at the employee's 
        regular rate.
  (p)(1) If an individual who is employed by a State, political 
subdivision of a State, or an interstate governmental agency in 
fire protection or law enforcement activities (including 
activities of security personnel in correctional institutions) 
and who, solely at such individual's option, agrees to be 
employed on a special detail by a separate or independent 
employer in fire protection, law enforcement, or related 
activities, the hours such individual was employed by such 
separate and independent employer shall be excluded by the 
public agency employing such individual in the calculation of 
the hours for which the employee is entitled to overtime 
compensation under this section if the public agency--
          (A) requires that its employees engaged in fire 
        protection, law enforcement, or security activities be 
        hired by a separate and independent employer to perform 
        the special detail,
          (B) facilitates the employment of such employees by a 
        separate and independent employer, or
          (C) otherwise affects the condition of employment of 
        such employees by a separate and independent employer.
  (2) If an employee of a public agency which is a State, 
political subdivision of a State, or an interstate governmental 
agency undertakes, on an occasional or sporadic basis and 
solely at the employee's option, part-time employment for the 
public agency which is in a different capacity from any 
capacity in which the employee is regularly employed with the 
public agency, the hours such employee was employed in 
performing the different employment shall be excluded by the 
public agency in the calculation of the hours for which the 
employee is entitled to overtime compensation under this 
section.
  (3) If an individual who is employed in any capacity by a 
public agency which is a State, political subdivision of a 
State, or an interstate governmental agency, agrees, with the 
approval of the public agency and solely at the option of such 
individual, to substitute during scheduled work hours for 
another individual who is employed by such agency in the same 
capacity, the hours such employee worked as a substitute shall 
be excluded by the public agency in the calculation of the 
hours for which the employee is entitled to overtime 
compensation under this section.
  (q) Any employer may employ any employee for a period or 
periods of not more than 10 hours in the aggregate in any 
workweek in excess of the maximum workweek specified in 
subsection (a) without paying the compensation for overtime 
employment prescribed in such subsection, if during such period 
or periods the employee is receiving remedial education that 
is--
          (1) provided to employees who lack a high school 
        diploma or educational attainment at the eighth grade 
        level;
          (2) designed to provide reading and other basic 
        skills at an eighth grade level or below; and
          (3) does not include job specific training.
  (r)(1) An employer shall provide--
          (A) a reasonable break time for an employee to 
        express breast milk for her nursing child for 1 year 
        after the child's birth each time such employee has 
        need to express the milk; and
          (B) a place, other than a bathroom, that is shielded 
        from view and free from intrusion from coworkers and 
        the public, which may be used by an employee to express 
        breast milk.
  (2) An employer shall not be required to compensate an 
employee receiving reasonable break time under paragraph (1) 
for any work time spent for such purpose.
  (3) An employer that employs less than 50 employees shall not 
be subject to the requirements of this subsection, if such 
requirements would impose an undue hardship by causing the 
employer significant difficulty or expense when considered in 
relation to the size, financial resources, nature, or structure 
of the employer's business.
  (4) Nothing in this subsection shall preempt a State law that 
provides greater protections to employees than the protections 
provided for under this subsection.
  (s) 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)(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 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 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 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 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 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 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'' and 
                ``compensatory time'' shall have the meanings 
                given such terms by subsection (o)(7).

           *       *       *       *       *       *       *

                               PENALTIES

  Sec. 16. (a) Any person who willfully violates any of the 
provisions of section 15 shall upon conviction thereof be 
subject to a fine of not more than $10,000, or to imprisonment 
for not more than six months, or both. No person shall be 
imprisoned under this subsection except for an offense 
committed after the conviction of such person for a prior 
offense under this subsection.
  [(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).
  (c) The Secretary is authorized to supervise the payment of 
the unpaid minimum wages or the unpaid overtime compensation 
owing to any employee or employees under section 6 or 7 of this 
Act, and the agreement of any employee to accept such payment 
shall upon payment in full constitute a waiver by such employee 
of any right he may have under subsection (b) of this section 
to such unpaid minimum wages or unpaid overtime compensation 
and an additional equal amount as liquidated damages. The 
Secretary may bring an action in any court of competent 
jurisdiction to recover the amount of the unpaid minimum wages 
or overtime compensation and an equal amount as liquidated 
damages. The right provided by subsection (b) to bring an 
action by or on behalf of any employee to recover the liability 
specified in the first sentence of such subsection and of any 
employee to become a party plaintiff to any such action shall 
terminate upon the filing of a complaint by the Secretary in an 
action under this subsection in which a recovery is sought of 
unpaid minimum wages or unpaid overtime compensation under 
sections 6 and 7 or liquidated or other damages provided by 
this subsection owing to such employee by an employer liable 
under the provisions of subsection (b), unless such action is 
dismissed without prejudice on motion of the Secretary. Any 
sums thus recovered by the Secretary on behalf of an employee 
pursuant to this subsection shall be held in a special deposit 
account and shall be paid, on order of the Secretary, directly 
to the employee or employees affected. Any such sums not paid 
to an employee because of inability to do so within a period of 
three years shall be covered into the Treasury of the United 
States as miscellaneous receipts. In determining when an action 
is commenced by the Secretary under this subsection for the 
purposes of the statutes of limitations provided in section 
6(a) of the Portal-to-Portal Act of 1947, it shall be 
considered to be commenced in the case of any individual 
claimant on the date when the complaint is filed if he is 
specifically named as a party plaintiff in the complaint, or if 
his name did not so appear, on the subsequent date on which his 
name is added as a party plantiff in such action.
  (d) In any action or proceeding commenced prior to, on, or 
after the date of enactment of this subsection, no employer 
shall be subject to any liability or punishment under this Act 
or the Portal-to-Portal Act of 1947 on account of his failure 
to comply with any provision or provisions of such Acts (1) 
with respect to work heretofore or hereafter performed in a 
workplace to which the exemption in section 13(f) is 
applicable, (2) with respect to work performed in Guam, the 
Canal Zone, or Wake Island before the effective date of this 
amendment of subsection (d), or (3) with respect to work 
performed in a possession named in section 6(a)(3) at any time 
prior to the establishment by the Secretary, as provided 
therein, of a minimum wage rate applicable to such work.
  (e)(1)(A) Any person who violates the provisions of sections 
12 or 13(c), relating to child labor, or any regulation issued 
pursuant to such sections, shall be subject to a civil penalty 
not to exceed--
          (i) $11,000 for each employee who was the subject of 
        such a violation; or
          (ii) $50,000 with regard to each such violation that 
        causes the death or serious injury of any employee 
        under the age of 18 years, which penalty may be doubled 
        where the violation is a repeated or willful violation.
  (B) For purposes of subparagraph (A), the term ``serious 
injury'' means--
          (i) permanent loss or substantial impairment of one 
        of the senses (sight, hearing, taste, smell, tactile 
        sensation);
          (ii) permanent loss or substantial impairment of the 
        function of a bodily member, organ, or mental faculty, 
        including the loss of all or part of an arm, leg, foot, 
        hand or other body part; or
          (iii) permanent paralysis or substantial impairment 
        that causes loss of movement or mobility of an arm, 
        leg, foot, hand or other body part.
  (2) Any person who repeatedly or willfully violates section 6 
or 7, relating to wages, shall be subject to a civil penalty 
not to exceed $1,100 for each such violation.
  (3) In determining the amount of any penalty under this 
subsection, the appropriateness of such penalty to the size of 
the business of the person charged and the gravity of the 
violation shall be considered. The amount of any penalty under 
this subsection, when finally determined, may be--
          (A) deducted from any sums owing by the United States 
        to the person charged;
          (B) recovered in a civil action brought by the 
        Secretary in any court of competent jurisdiction, in 
        which litigation the Secretary shall be represented by 
        the Solicitor of Labor; or
          (C) ordered by the court, in an action brought for a 
        violation of section 15(a)(4) or a repeated or willful 
        violation of section 15(a)(2), to be paid to the 
        Secretary.
  (4) Any administrative determination by the Secretary of the 
amount of any penalty under this subsection shall be final, 
unless within 15 days after receipt of notice thereof by 
certified mail the person charged with the violation takes 
exception to the determination that the violations for which 
the penalty is imposed occurred, in which event final 
determination of the penalty shall be made in an administrative 
proceeding after opportunity for hearing in accordance with 
section 554 of title 5, United States Code, and regulations to 
be promulgated by the Secretary.
  (5) Except for civil penalties collected for violations of 
section 12, sums collected as penalties pursuant to this 
section shall be applied toward reimbursement of the costs of 
determining the violations and assessing and collecting such 
penalties, in accordance with the provision of section 2 of the 
Act entitled ``An Act to authorize the Department of Labor to 
make special statistical studies upon payment of the cost 
thereof and for other purposes'' (29 U.S.C. 9a). Civil 
penalties collected for violations of section 12 shall be 
deposited in the general fund of the Treasury.
  (f) An employer that violates section 7(s)(4) shall be liable 
to the employee affected in the amount of the rate of 
compensation (determined in accordance with section 7(s)(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

          H.R. 1406, ``THE WORKING FAMILIES FLEXIBILITY ACT''

                      113TH CONGRESS, 1ST SESSION

                             APRIL 30, 2013

    Committee Democrats oppose H.R. 1406. This bill would amend 
the Fair Labor Standards Act (FLSA) to allow private sector 
employers to ``compensate'' hourly workers with compensatory 
(``comp'') time off in lieu of overtime pay. By forcing workers 
to compromise their paycheck in order to have more time off 
work, with no guarantee that they would actually receive the 
time off when they need it, this bill would jeopardize the 
economic well-being of millions of Americans who depend on 
overtime wages to make ends meet.
    H.R. 1406 does nothing to provide working families with 
meaningful flexibility. Instead, it rolls back the clock on 
vital gains that working people achieved with the passage of 
the FLSA in 1938. It cuts wages for middle class and low-income 
Americans at a time when they are already facing overwhelming 
financial stress. It gives employers--not employees--
flexibility in setting working hours. It impedes enforcement of 
overtime laws. In short, it undermines one of the most 
important, hard-fought legal protections that workers currently 
depend upon.
    This bill is being pushed through by House leadership as 
part of rebranding campaign to soften the majority's image with 
a supposedly ``family friendly'' agenda.\1\ Unfortunately, 
rather than presenting this Committee with a proposal that 
would actually benefit working families, the majority has 
simply reintroduced a proposal that would let employers pay 
workers less. The bill forces workers into an unnecessary 
choice between earned overtime pay and family-friendly 
scheduling. Congress ought to pass legislation that both 
protects earned overtime pay and promotes needed flexibility in 
the workplace. H.R. 1406 simply rehashes a worn-out decades-old 
idea that has been rejected multiple times in the past, and it 
will meet the same fate this time around by never advancing 
beyond the House.
---------------------------------------------------------------------------
    \1\See Eric Cantor, ``Making Life Work'' Remarks for the AEI, 
February 5, 2013. Available at http://www.aei.org/article/politics-and-
public-opinion/legislative/house/remarks-by-majority-leader -eric-
cantor-as-prepared-for-delivery.
---------------------------------------------------------------------------
    Instead of H.R. 1406, what working families really need is 
legislation that would raise the minimum wage, ensure equal pay 
for equal work, provide paid sick leave to workers, provide 
paid family & medical leave for more workers and expand the 
Family and Medical Leave Act to include more employees. These 
are the kinds of changes that would make a real difference in 
the lives of working Americans, not a rushed proposal that 
undermines bedrock employment law and costs workers much needed 
overtime compensation.

                      THE FAIR LABOR STANDARDS ACT

Background on the FLSA's wage and hour protections
    In the 1930s, Congress saw the need for legislation to 
address the widespread ``labor conditions detrimental to the 
maintenance of the minimum standard of living necessary for 
health, efficiency, and general well-being of workers.''\2\ 
This concern ultimately led to the passage of the FLSA in 1938, 
which to this day stands as one of the crowning achievements of 
the New Deal. This crucial law establishes a federal minimum 
wage, restricts the use of child labor, and sets standards for 
when employers must pay workers overtime.\3\ President Harry 
Truman, who served in the Senate when Congress was considering 
the FLSA, would later describe it as ``[o]ne of the most 
important bills for which I voted. . . . [It was one of the] 
fundamental New Deal measures . . . intended to help the little 
people in labor who had no lobby and no influence.''\4\
---------------------------------------------------------------------------
    \2\29 U.S.C. Sec. 202(a).
    \3\29 U.S.C. Sec. Sec. 201-217.
    \4\Memoirs by Harry S. Truman, Year of Decisions (Vol. 1) (1955), 
at 153.
---------------------------------------------------------------------------
    Seventy-five years after its enactment, the FLSA remains 
the nation's basic law governing wages and hours of work. There 
are three main protections afforded to workers under this 
critical law: (1) a basic minimum wage, (2) a limit on the 
number of hours an employer may require from an employee before 
being subject to an overtime premium, and (3) a prohibition on 
most forms of child labor.\5\
---------------------------------------------------------------------------
    \5\29 U.S.C. Sec. Sec. 201-219.
---------------------------------------------------------------------------
    The maximum hours and overtime provisions are set out in 
Section 7 of the FLSA. Currently, the law requires that all 
covered employees be compensated for any time that they work in 
excess of forty hours in a week at a rate of no less than one-
and-a-half their regular wage rate.\6\ Although the limit on 
hours compensable at the regular wage rate is firmly set at 
forty, there is nonetheless substantial flexibility in how 
these hours are allotted over the course of a week. In the 
implementing regulations, a week is defined as a ``fixed and 
regularly recurring 168-hour period,''\7\ and there is no 
overtime premium for hours worked on weekends.\8\ Accordingly, 
the Wage and Hour Division (WHD) of the Department of Labor 
(DOL) states that a workweek ``need not coincide with the 
calendar week, but may begin on any day and at any hour of the 
day. Different workweeks may be established for different 
employees or groups of employees.''\9\
---------------------------------------------------------------------------
    \6\29 U.S.C. Sec. 207(a).
    \7\29 C.F.R. Sec. 778.105.
    \8\29 C.F.R. Sec. 778.102.
    \9\US Department of Labor, Wage and Hour Division, Fact Sheet #23: 
Overtime Pay Requirements of the FLSA, http://www.dol.gov/whd/regs/
compliance/whdfs23.pdf. See also 29 C.F.R. Sec. Sec. 778.102, 778.103.
---------------------------------------------------------------------------
    There are two primary purposes behind setting a maximum 
hour limit and subjecting further hours to an overtime premium: 
discouraging overwork and spreading employment. Congress sought 
to lessen the burden on workers that comes from working an 
``intolerable'' number of hours in a given week.\10\ By 
charging a premium for extra work hours, employers are 
discouraged from overworking their employees. The other purpose 
behind the overtime wage premium is economic in nature 
spreading employment, thereby spurring hiring and reducing the 
unemployment rate. President Roosevelt argued this point in a 
1937 message to Congress: ``Reasonable and flexible use of the 
long established right of government to set and to change 
working hours can, I hope, decrease unemployment in those 
groups in which unemployment today principally exists.''\11\
---------------------------------------------------------------------------
    \10\President Franklin D. Roosevelt, Annual Message to Congress, 
January 3, 1938. Available at http://www.presidency.ucsb.edu/ws/
index.php?pid=15517.
    \11\President Franklin D. Roosevelt, Message to Congress on 
Establishing Minimum Wages and Maximum Hours, May 24, 1937. Available 
at http://www.presidency.ucsb.edu/ws/index. 
php?pid=15405&st=wage&st1=/. Former Secretary of Labor Frances Perkins 
would later say the maximum hour provisions of the FLSA were key to 
achieving both of these goals--and this was especially important to the 
war effort during World War II:
---------------------------------------------------------------------------
      The Wage and Hour Act has been a success, and Roosevelt 
      took comfort in the fact. Its principal objectives were 
      accepted. The spread of employment by shorter hours 
      started. The shorter hours have made a more humane 
      schedule. The fact that excess hours are penalized by 
      overtime costs has proved sufficient to keep hours at 
      reasonable levels and yet flexible enough to make it 
      possible to work more than forty hours when necessary, as 
      it was during [World War II].
Frances Perkins, The Roosevelt I Knew (1946), at 266.
    As originally enacted, the FLSA contained no provisions 
allowing employers to offer comp time in lieu of overtime 
wages. However, Congress changed this when it passed the Fair 
Labor Standards Amendments of 1985, which introduced a limited 
system of comp time for public-sector employees.\12\ Section 
7(o) of the FLSA now provides that state and federal public 
sector workers are eligible for comp time in lieu of overtime 
wages, with the comp time to accumulate at a rate of one and 
half times the number of hours worked.\13\ As applied to 
federal employees, implementing regulations require that 
accrued comp time be used by the end of the 26th pay period 
(one year) after the pay period during which the overtime hours 
were worked.\14\ Congress's intention in adding this provision 
was to provide cost savings in government budgets, as the 
overtime wage premium was more expensive than providing workers 
with compensatory time off.\15\
---------------------------------------------------------------------------
    \12\Pub. Law 99-150.
    \13\29 U.S.C. Sec. 207.
    \14\Office of Personnel Management. ``Fact Sheet: Compensatory Time 
Off.'' Available at 
http://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/
fact-sheets/compensatory-time-off. See also 5 C.F.R. Sec. 550.114.
    \15\Ross Eisenbrey, ``The Naked Truth About Comp Time'' Economic 
Policy Institute (March 31, 2003), at 5-6. Available at http://
www.epi.org/page/-/old/issuebriefs/ib190/ib190.pdf
---------------------------------------------------------------------------

            PAST EFFORTS TO REPLACE OVERTIME WITH COMP TIME

    The ideas presented by the majority in H.R. 1406 are 
nothing new. Since the 1990s, Committee Republicans have 
sponsored numerous virtually identical bills in previous 
Congresses, each of which would have weakened overtime 
protections through the use of comp time. None of these bills 
have come close to being enacted into law.
     In 1997, Republicans introduced H.R. 1, the 
``Working Families Flexibility Act of 1997,'' which sought to 
amend the FLSA to extend comp time to the private sector. This 
bill passed the Republican-controlled House and was not 
considered by the Senate.\16\
---------------------------------------------------------------------------
    \16\Available at: http://www.gpo.gov/fdsys/pkg/BILLS-105hr1eh/pdf/
BILLS-105hr1eh.pdf.
---------------------------------------------------------------------------
     In 2003, Republicans introduced H.R. 1119, the so-
called ``Family Time Flexibility Act,'' which again proposed 
extending comp time to the private sector. This bill did not 
come up for a vote on the House floor.\17\
---------------------------------------------------------------------------
    \17\Available at: http://www.gpo.gov/fdsys/pkg/BILLS-108hr1119rh/
pdf/BILLS-108hr1119rh.pdf.
---------------------------------------------------------------------------
     In 2008, Republicans introduced H.R. 6025, the 
``Family Friendly Workplace Act,'' a nearly identical comp time 
bill. This bill was never reported out of this Committee.\18\
---------------------------------------------------------------------------
    \18\Available at: http://www.gpo.gov/fdsys/pkg/BILLS-110hr6025ih/
pdf/BILLS-110hr6025ih.pdf.
---------------------------------------------------------------------------
     In 2009, Republicans introduced H.R. 933, which 
was a reintroduction of the 2008 ``Family Friendly Workplace 
Act.'' This bill was also never reported out of this 
Committee.\19\
---------------------------------------------------------------------------
    \19\Available at: http://www.gpo.gov/fdsys/pkg/BILLS-111hr933ih/
pdf/BILLS-111hr933ih.pdf.
---------------------------------------------------------------------------
    Each comp time bill met firm opposition from worker 
advocates and women's organizations, who recognized the harm 
these proposals would inflict upon working families. Opponents 
of comp time legislation include: the AFL-CIO, the National 
Women's Law Center, the National Organization for Women, 9 to 
5--National Association of Working Women, SEIU, International 
Brotherhood of Teamsters, Communication Workers of America, 
Interfaith Worker Justice, National Employment Law Project, 
Center for Law and Social Policy, American Sustainable Business 
Council and the National Partnership for Women and Families.

            THE REAL IMPACT OF H.R. 1406 ON WORKING FAMILIES

H.R. 1406 reduces wages and constitutes an unsecured, interest-free 
        loan to employers

    At its core, the basic intent behind comp time legislation 
is to force workers to compromise their pay in order to receive 
time off.\20\ This is an unacceptable deal for workers, 
particularly in an era of stagnant wages and rising income 
inequality. Since 2000, the hourly wage of the median worker 
rose just 0.5 percent.\21\ In 2012, corporate profits as a 
share of the economy reached their highest point since World 
War II, while overall labor compensation fell to a 57-year 
low.\22\
---------------------------------------------------------------------------
    \20\Ross Eisenbrey, ``The Naked Truth About Comp Time'' Economic 
Policy Institute (March 31, 2003), at 2. Available at http://
www.epi.org/page/-/old/issuebriefs/ib190/ib190.pdf
    \21\Economic Policy Institute. ``Fact Sheet: Wages'' The State of 
Working America Available at http://stateofworkingamerica.org/fact-
sheets/wages/
    \22\Jeffry Bartash, ``U.S. corporate profits soar in 2012. Workers 
get little of it.'' MarketWatch, The Wall Street Journal (March 28, 
2013) Available at http://blogs marketwatch.com/thetell/2013/03/28/u-s-
corporate-profits-soar-in-2012-workers-get-little-of-it/
---------------------------------------------------------------------------
    Nothing in H.R. 1406 requires that workers' comp time 
credits earn interest on their wages, though employers are free 
to commingle the funds or invest unpaid overtime to their 
advantage. This amounts to a zero-interest loan from workers to 
their employers. Further, the delay in payment under this bill 
is excessively long. When an employee is compensated for unused 
comp time, the employer would not actually be required to pay 
the employee until January 31 of the following year. For a 
worker who puts in extra hours in January of the previous year, 
this could mean he or she misses out on wages, plus over a year 
of interest on their unpaid wages, while the employer keeps one 
hundred percent of the gains. That is an unjustifiable cut in 
pay for the worker.
    Furthermore, H.R. 1406 also does nothing to protect workers 
in the event that their employer goes out of business or 
declares bankruptcy. Workers risk losing up to 160 hours of 
overtime pay (the limit on overtime hours a worker can bank 
under this legislation) because their overtime is not put into 
escrow or a trust fund and could be lost if the employer goes 
out of business or declares bankruptcy.\23\ This is especially 
troubling given the hundreds of thousands of businesses that 
close each year--over 690,000 in 2010 alone.\24\
---------------------------------------------------------------------------
    \23\Ross Eisenbrey, ``The Naked Truth About Comp Time'' Economic 
Policy Institute (March 31, 2003) Available at http://www.epi.org/page/
-/old/issuebriefs/ib190/ib190.pdf
    \24\U.S. Census Bureau, Business Dynamic Statistics Data Tables: 
Establishment Characteristics, Available at http://census.gov/ces/
dataproducts/bds/data_estab.html
---------------------------------------------------------------------------

H.R. 1406 discourages hiring new employees

    One of the key goals Congress had in requiring employers 
pay an overtime premium was to discourage employers from 
working their employees for long hours in lieu of hiring more 
people.\25\ Even with this wage premium, it is still often 
cheaper to work an employee longer hours rather than hiring an 
additional employee.\26\ Introducing comp time into the 
equation would make this problem worse, as it would be even 
cheaper to provide comp time than it is to pay overtime wages. 
This is exactly the wrong course in today's economic climate, 
in which the unemployment rate is 7.6 percent, and over 11.7 
million Americans are looking for work.\27\
---------------------------------------------------------------------------
    \25\Wage and Hour Division, U.S. Department of Labor, ``Fact Sheet: 
Proposed Rule Changes Concerning In-Home Care Industry under the Fair 
Labor Standards Act (FLSA)'' Available at http://www.dol.gov/whd/flsa/
whdfs-NPRM-companionship.htm
    \26\Ross Eisenbrey, ``The Naked Truth About Comp Time'' Economic 
Policy Institute (March 31, 2003), at 4. Available at http://
www.epi.org/page/-/old/issuebriefs/ib190/ib190.pdf
    \27\Bureau of Labor Statistics, United States Department of Labor. 
(2013). The Employment Situation--March 2013. Retrieved from: http://
www.bls.gov/news.release/pdf/empsit.pdf
---------------------------------------------------------------------------

H.R. 1406 gives employers--not employees--the right to control comp 
        time

    Nothing in the FLSA prevents employers from providing 
flexibility to workers. Under current law, employers already 
may liberally grant paid or unpaid time off to workers. Under 
H.R. 1406, it is the employer who has control over whether an 
employee is paid in overtime wages or is provided comp time. 
Despite language paying lip service to flexibility for workers, 
there is no actual guarantee that a worker will ever be 
permitted to take the comp time when she wishes to access it. 
Instead, an employer is permitted to deny a worker's request 
for comp time if it ``unduly disrupts the operations of the 
employer.'' Moreover, case law interpreting similar comp time 
language in the public sector indicates that an employer need 
not give the employee the specific day off requested, even if 
that specific day off would not have been unduly disruptive. 
Rather than increasing a worker's control over her life, this 
legislation increases the employer's control over the worker's 
life.
    Ostensibly, H.R. 1406 provides workers with the choice 
between comp time and overtime pay. However, this bill gives 
employers control over who has access to overtime wages and 
comp time. Because providing comp time off is cheaper for an 
employer than paying the overtime premium, the bill creates an 
incentive for employers to preferentially assign overtime to 
workers who elect to receive comp time in lieu of overtime. 
Nothing in H.R. 1406 prohibits this. Workers who choose not to 
receive comp time in lieu of overtime pay could be penalized 
with fewer scheduled work hours and loss of overtime work. 
Hourly workers in a struggling economy are often desperate to 
keep their jobs; if they understand that their employers prefer 
comp time arrangements, they may feel as if they have no choice 
but to give up earned overtime pay in exchange for comp time. 
As a result, workers whose families most rely on overtime pay 
could struggle to make ends meet because they would lose access 
to a vital source of extra income. H.R. 1406's enforcement 
provision does not provide a remedy for such violations.

H.R. 1406 would further undermine enforcement of overtime laws

    This bill would greatly increase the complexity of 
enforcing overtime protections by making it more difficult for 
DOL to determine whether an overtime violation has occurred 
when an employer asserts that comp time was granted in lieu of 
overtime pay. The bill does not provide any additional 
resources to the Department of Labor in order to ensure 
compliance. Currently, the enforcement capabilities of the Wage 
and Hour Division are stretched thin, with only about 1,000 
inspectors who regulate a labor force of over 150 million 
people. Adding additional complexity to the process without 
providing additional resources is a recipe for rampant under-
enforcement.
    Furthermore, H.R. 1406 does not include meaningful 
penalties for employers who fail to comply with the legislation 
and does nothing to protect a worker who is discriminated 
against for choosing not to work for comp time. As a result, an 
employer could deny payment of overtime, deny a worker access 
to earned comp time, fire a worker for refusing to work for 
comp time and would only be liable for the amount of 
compensation he failed to pay and an amount equal to those 
wages as liquidated damages. A worker who is fired for refusing 
to agree to a comp time arrangement would have no right of 
reinstatement--and no unpaid accrued comp time from which to 
calculate any damages.

              THE MAJORITY'S FLAWED PUBLIC-SECTOR ARGUMENT

    Proponents of H.R. 1406 argue that the legislation simply 
provides flexibility already available in the public sector to 
private sector workers. However, state and municipal employees 
only became eligible for comp time versus overtime as a cost-
saving policy that afforded employers the value of their 
employees' labor without being required to pay for it. At the 
same time, public sector workers generally enjoy many more 
employment protections than their private sector counterparts. 
As a result, public sector workers, who are also more likely to 
have union representation, are in a far more secure position to 
be able to negotiate equitable comp time arrangements. H.R. 
1406 extends all the benefits of employer-controlled comp time 
arrangements to private sector employers, yet makes no effort 
to engender job protection parity for private sector workers.

             LEGISLATION THAT WORKING FAMILIES REALLY NEED

    Workers depend on the wage and overtime protections in the 
FLSA. They should not have to sacrifice earned wages to have 
more time off from work. Nothing in the Working Families 
Flexibility Act improves wage protections or promotes workplace 
flexibility. There are many Democratic proposals that the 
Committee ought to consider that would increase workers' wages 
and improve working conditions.

Working families need a raise--raise the minimum wage

    H.R. 1010 will raise the federal minimum wage to $10.10 by 
2015, in three 95 cent increments. It will adjust the minimum 
wage each year to keep pace with the rising cost of living 
starting 2016. It will also raise the minimum wage for tipped 
workers--which has been frozen at a meager $2.13 per hour for 
more than twenty years--to 70% of the minimum wage. A majority 
of workers' rights organizations enthusiastically support this 
bill, including: AFL-CIO, SEIU, National Partnership for Women 
and Families, National Employment Law Project, National Women's 
Law Center, NAACP, and the National Disability Rights Network.

Working families need equal pay

    The Paycheck Fairness Act would address discriminatory pay 
practices, an important source of the wage gap. Women working 
full-time, year-round are paid 77 cents for every dollar paid 
to their male counterparts, translating into over $10,000 less 
per year in median earnings.\28\ This bill builds upon the 
landmark Equal Pay Act signed into law in 1963 by closing 
loopholes that have kept it from achieving its goal of equal 
pay. The bill would require employers to show pay disparity is 
truly related to job-performance--not gender. It prohibits 
employer retaliation for sharing salary information with 
coworkers. Under current law employers can sue and punish 
employees for sharing such information. In addition, it 
strengthens remedies for pay discrimination by increasing 
compensation women can seek, allowing them to not only seek 
back pay, but also punitive damages for pay discrimination. 
This bill is supported by many workers' rights organizations, 
such as the AFL-CIO, ACLU, National Partnership for Women and 
Families, and the National Women's Law Center.
---------------------------------------------------------------------------
    \28\National Women's Law Center. ``FAQ About the Wage Gap'' 
(September 2012). Available at http://www.nwlc.org/sites/default/files/
pdfs/wage_gap_faqs_sept_2012.pdf
---------------------------------------------------------------------------

Working families need paid sick leave

    The Healthy Families Act would allow workers to earn paid 
sick leave to use when they are sick, to care for a sick family 
member, to obtain preventive care, or to address the impacts of 
domestic violence. Workers would earn one hour of paid sick 
time for every 30 hours worked. Employers that already provide 
paid sick time will not have to change their current policies, 
as long as their existing time can be used for the same 
purposes. Employers can also require workers to provide 
documentation supporting any request for leave longer than 
three consecutive days. This bill would let 30 million more 
workers earn paid sick days, expanding access to 90 percent of 
the workforce.\29\ Hundreds of state and national organizations 
support this bill, including: AFL-CIO, ACLU, SEIU, NAACP, 
National Women's Law Center, National Employment Law Project, 
National Partnership for Women and Families, The Partnership 
for Working Families, 9 to 5--National Association for Working 
Women, and American Rights at Work.
---------------------------------------------------------------------------
    \29\National Partnership for Women and Families (March 2013) citing 
to Joint Economic Committee of the U.S. Congress (March 2010). 
``Expanding Access to Paid Sick Leave: The Impact of the Healthy 
Families Act on America's Workers.'' Available at http://
jec.senate.gov/public/index.cfm?a-Files.Serve&File_id-abf8aca7-6b94-
4152-b720-2d8d04b81ed6
---------------------------------------------------------------------------
    During the markup of H.R. 1406, Rep. Courtney offered the 
Healthy Families Act as a substitute amendment. Unfortunately, 
Committee Republicans voted unanimously to block consideration 
of this amendment.

Working families need paid family & medical leave

    Congress expanded the Family Medical Leave Act to provide 
greater protections for active duty service members, military 
caregivers, and family members of service members and covered 
veterans. Several other bills have been introduced to expand 
and improve the reach of the Family Medical Leave Act including 
the number of employers covered, types of circumstances covered 
and increased access to paid leave.
    Expanding the coverage of FMLA is an important step but 
Congress must also ensure workers have access to paid family 
and medical leave. Only 11 percent of workers in the U.S. have 
access to paid family leave through their employers. We must 
expand work-family policies to include wage replacement when 
workers must take time away from work to address their own 
serious health condition, care for a family member with a 
serious health condition, or care for a newborn or newly 
adopted child. Currently, the states of California and New 
Jersey provide paid family leave through their temporary 
disability insurance systems. Congress should build upon this 
model and move to a national commitment to paid family & 
medical leave.
                                   George Miller, Senior Democratic 
                                       Member.
                                   Gregorio Kilili Camacho Sablan.
                                   Frederica S. Wilson.
                                   Dave Loebsack.
                                   Robert C. Scott.
                                   Carolyn McCarthy.
                                   John F. Tierney.
                                   Robert E. Andrews.
                                   Suzanne Bonamici.
                                   Timothy H. Bishop.
                                   Raul M. Grijalva.
                                   Susan A. Davis.
                                   Jared Polis.
                                   Rush Holt.
                                   Joe Courtney.
                                   Ruben Hinojosa.
                                   John A. Yarmuth.

                                  

```