Working Families Flexibility Act of 2025
- Bill Number
- H.R. 2870
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Labor and Employment
- Status
- Introduced
- Latest Action
- 2026-02-12: Placed on the Union Calendar, Calendar No. 422.
- Last Updated
- 2026-06-11T23:26:38Z
AI-Generated Summary
Purpose of the Legislation
The Working Families Flexibility Act of 2025 aims to give private sector employees more flexibility in how they receive overtime pay by allowing them to choose compensatory time off (extra paid time away from work) instead of immediate cash payment. This is a temporary measure limited to five years from the date the law is enacted, building on existing overtime rules under the Fair Labor Standards Act of 1938 (FLSA), which is the main U.S. federal law setting minimum wage and overtime standards.
Key Provisions
- Eligibility and General Rule: Applies to non-government (private sector) employees who have worked at least 1,000 hours for their employer in the 12 months before agreeing to the plan or receiving time off. Employees can receive 1.5 hours of compensatory time off for each hour of overtime worked (overtime is typically hours beyond 40 in a workweek), instead of cash at 1.5 times the regular hourly rate.
- Agreements Required: Employers can offer this only through:
- A collective bargaining agreement (a negotiated contract between a union and employer representing workers).
- Or, for non-union employees, a voluntary written or verifiable agreement made before overtime work begins, where the employee knowingly chooses time off over cash and it's not required as a job condition.
- Limits and Payouts:
- Maximum accrual: 160 hours of compensatory time.
- Annual payout: Employers must pay cash for unused time at the end of each calendar year (or another 12-month period set by the employer), within 31 days.
- Excess over 80 hours: Employers can pay out unused time above 80 hours anytime with 30 days' notice.
- Ending the program: Employers can stop offering it with 30 days' notice and must pay out all unused time.
- Employee requests: Employees can withdraw from the agreement or request cash payout anytime in writing; employers must pay within 30 days.
- Upon job ending: All unused time must be paid out, whether the employee quits or is fired.
- Payout rate: Cash is at the higher of the employee's regular rate when the time was earned or their final regular rate; this counts as unpaid overtime owed.
- Usage Rules: Employees can request to use accrued time off within a reasonable period, and employers must allow it unless it unduly disrupts business operations.
- Anti-Coercion Protections: Employers cannot intimidate, threaten, or force employees to accept or use compensatory time.
- Enforcement and Remedies: Violations of anti-coercion rules lead to employer liability for the value of accrued time (minus any used) plus equal liquidated damages (a fixed penalty to compensate for harm without proving exact losses).
- Notices and Reporting:
- The Secretary of Labor must update FLSA employee notices within 30 days to explain the new option.
- The Government Accountability Office (GAO) must report to Congress annually for five years on usage, complaints, enforcement actions, and outcomes related to this provision.
Significant Changes to Existing Law
- Extension to Private Sector: Before this, compensatory time was only available to public sector (government) employees under FLSA Section 7(o). This adds a new Section 7(t) specifically for private employees, but it's temporary (five years) and excludes public agencies.
- Voluntary and Limited Nature: Unlike public sector rules, private sector comp time requires explicit employee choice via agreement, caps accrual at 160 hours (higher than the public sector's 240-hour cap in some cases), and mandates annual cash payouts for unused time to prevent indefinite accrual.
- Remedies Update: Adds specific penalties in FLSA Section 16 for coercion violations, tailored to the value of accrued time, while exempting other overtime violations from certain employee lawsuit rights under Section 16(b).
- No Broader Overtime Changes: Does not alter core overtime requirements (e.g., 1.5x pay rate) but offers an alternative only if employees opt in.
Potential Impacts
- On Citizens (Employees): Provides working families with flexibility to take paid time off for personal needs (e.g., family or rest) instead of immediate cash, potentially improving work-life balance. However, it may delay income for some, and the temporary five-year limit means the option could expire without renewal.
- On Employers: Offers a cost-saving tool by deferring cash payouts, but requires new agreements, record-keeping, and anti-coercion compliance, which could increase administrative burdens. Private businesses gain an incentive-based option not previously available.
- On Government Agencies: The Department of Labor (DOL) must update notices and handle complaints/enforcement for violations, potentially increasing workload. GAO provides oversight reports to inform Congress. No direct impact on international relations, as this is a domestic labor law.
- Broader Economy: Could reduce short-term overtime costs for businesses, possibly affecting wage flows, but the annual payout rule limits long-term deferrals.
Main Stakeholders Affected
- Private Sector Employees: Primary beneficiaries or choosers of comp time, especially hourly workers eligible for overtime (e.g., in retail, manufacturing, or service industries).
- Private Employers: Businesses offering the option, needing to negotiate agreements and manage time off without disrupting operations.
- Labor Unions: Involved in collective bargaining; may influence how widely the option is adopted in unionized workplaces.
- Department of Labor (DOL): Responsible for enforcement, notices, and handling complaints/actions.
- Government Accountability Office (GAO) and Congress: GAO monitors implementation; Congress may use reports to decide on extensions or changes.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens employee protections by mandating voluntary agreements and anti-coercion rules, enforceable under FLSA's existing framework (e.g., lawsuits for unpaid wages). The temporary sunset clause (five years) allows Congress to review and adjust based on GAO data, potentially avoiding permanent shifts in labor standards. Defines terms like "compensatory time" by referencing public sector rules for consistency.
- Constitutional: No direct challenges noted; aligns with Congress's authority under the Commerce Clause to regulate interstate labor. Emphasizes voluntariness to avoid coercion claims under due process or contract rights.
- Political: Promotes "flexibility" for families, appealing to pro-worker and business interests, but could spark debate over whether it erodes immediate overtime pay—a key labor protection since 1938. The reporting requirement ensures accountability, potentially influencing future labor policy amid ongoing discussions on work-life balance post-pandemic.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Miller, Mary E. [R-IL-15]
Recent Actions
- 2026-02-12: Placed on the Union Calendar, Calendar No. 422.
- 2026-02-12: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-496.
- 2026-02-12: Reported (Amended) by the Committee on Education and Workforce. H. Rept. 119-496.
- 2025-11-20: Ordered to be Reported (Amended) by the Yeas and Nays: 19 - 15.
- 2025-11-20: Committee Consideration and Mark-up Session Held
- 2025-04-10: Referred to the House Committee on Education and Workforce.
- 2025-04-10: Introduced in House
- 2025-04-10: Introduced in House
Bill Versions
- Working Families Flexibility Act of 2025 — issued 2025-04-10 — PDF (9 pages)
- Working Families Flexibility Act of 2025 — issued 2026-02-12 — PDF (12 pages)