logo_seyfarth_shaw.gifAuthored by Alex Passantino

$35 million. 

Even the ability of a public sector employer to use comp time did not prevent the Puerto Rico Department of Corrections and Rehabilitation from paying $35 million in back wages and interest to nearly 4,500 current and former employees.  See here.  In a consent judgment representing one of the largest recoveries in the history of the Wage & Hour Division, the Commonwealth also agreed to install electronic timekeeping systems, train supervisors, hire additional staff (to reduce the need for overtime), employ human resources liaisons to monitor payroll, track payroll complaints and resolutions, and report its compliance efforts annually to the Wage & Hour Division. 

Under certain circumstances, employees of state or local government agencies may receive compensatory (comp) time off, at a rate of not less than one and one-half hours for each overtime hour worked, instead of cash overtime pay.  In the case of law enforcement personnel, the employees may accrue or “bank” up to 480 hours of comp time.  Private employers may not use a comp time bank for non-exempt employees. 

In this case, the Department of Corrections and Rehabilitation apparently “regularly allowed employees’ comp time ‘banks’ to greatly exceed 480 hours.”

But, I’m a Private Sector Employer.  What Does this Have to Do With Me?

At this time, not a whole lot.  The case is notable for its use of a consent judgment that calls for affirmative relief over and above any statutory obligations.  As we’ve mentioned previously (here), we anticipate an increased use of these non-traditional enforcement tools.

It is also worth noting that there are efforts in Congress to bring comp time to the private sector.  Earlier this week, the House Education and Workforce Committee approved the Working Families Flexibility Act of 2013 (H.R. 1406).  See here.  In its current state, H.R. 1406 would allow employers to offer its employees a choice between comp time and cash wages, with an annual cap of 160 hours on comp time accrual.  The bill also contains several provisions to protect employees, including a requirement that the comp time agreement be in writing and safeguards to ensure that the comp time choice and use are voluntary.  The bill does nothing to change the FLSA’s 40-hour workweek and/or the manner in which overtime compensation is accrued — comp time would accrue at a rate of 1.5 hours for every overtime hour worked.

Well . . . What Should We Do?

Take some time to review the provisions of the Working Families Flexibility Act (here).  Remember that this is not the law for private sector employers; it is a bill being proposed in Congress and whether it becomes an option for your business depends upon how Congress votes.  Private sector employers must continue to pay non-exempt employees at a rate of one-and-one-half the regular rate of pay for all hours worked in excess of 40 hours in a workweek, unless and until a law is passed that changes that obligation.  We will, of course, keep you advised of the progress of the Working Families Flexibility Act of 2013 and any other legislation that may impact an employer’s obligations under the FLSA.

W.H.D.? (“What Happened, Dude?”) is a weekly blog post in which we break down recent enforcement activity by the U.S. Department of Labor’s Wage & Hour Division (WHD), look at what went wrong for the employer, and share some lessons for other employers.