Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act of 1938 (“FLSA”) requires that workers receive not less than a minimum wage (currently $5.15/hour) and establishes a standard 40-hour workweek for most workers. The law provides that covered workers (often referred to as “non-exempt”) must receive premium pay (i.e., “overtime pay”) for each hour they work in excess of 40 hours in one week. Overtime pay is paid at the rate of one and one-half times the employee’s regular rate of pay. Thus, the FLSA as currently written can be viewed as promoting a work-life balance by creating an incentive for employers not to over-work their employees.

Amendments to the FLSA, enacted in 1985, permit state and local government employers to compensate their employees’ overtime hours with paid time away from work (compensatory time or “comp time”) in lieu of overtime pay. Prior to 1985, state and local governments were not subject to the FLSA. The ‘85 amendments were enacted to protect state and local governments from the financial burden that the requirement to provide overtime pay would have posed. Under the amended law, public employees are entitled to one and one-half hours of comp time for each hour of overtime work, subject to a statutory cap. Once the cap is reached, the employer must compensate the employee financially for all subsequent overtime work. An employer may require an employee to use comp time that the employee would rather save.

Currently, there is significant debate as to whether Congress should extend comp time in lieu of overtime pay to the private sector. Proponents argue that allowing employers to provide comp time would make the workplace more flexible and family-friendly, since employees could use their comp time to address personal and family obligations. These proponents also urge that the system should be the same for private employees as it is for public employees. Opponents argue that such a change would pose significant risks for employees. They fear that employers will offer overtime hours only to those employees willing to take comp time instead of overtime pay, thus diminishing the take-home pay for those employees who primarily relied on overtime pay. They also fear that some employers will violate the law by requiring workers to choose comp time instead of overtime pay, and that employees will not have sufficient flexibility to use the comp time that they earn when they want to use it.

Further Information

Documents prepared by Workplace Flexibility 2010:

  • Comp time documents (to come)