Legislative Update: House Passes Two Bills on Comp Time and Health Care

The House of Representatives recently passed legislation we think you should know about. If both acts are passed, major changes will directly impact you and your business.

The Working Families Flexibility Act

The Working Families Flexibility Act was passed on Tuesday, May 2. If signed into law, this act would allow overtime-eligible employees to opt for comp time (paid time off in the future) as another choice of compensation when working overtime. Currently, the Fair Labor Standards Act (the nation’s prevailing federal labor law) only allows for overtime pay to be paid out at the rate of 1.5 x an employee’s regular rate of pay for each overtime hour worked. The payment must be paid in the applicable pay period during which overtime was worked.

The bill, while still preserving that option, presents a second option for employees to select – for each overtime hour worked, employees could opt to be compensated in the form of paid comp time, at the rate of one-and-a-half hours of paid comp time per hour. For instance, if an employee works 46 hours in a workweek, they could choose between receiving 6 hours of pay at 1.5 x their regular rate, or 9 hours of paid time off in the future.

While the bill has been passed by the House, the Senate still needs to approve the legislation in order for it to be reviewed and approved by the President. If approved, the bill will not affect all states — it will only apply to states that do not currently have their own overtime laws requiring that overtime pay must be paid out as time-and-a-half.

House Passes New Healthcare Bill

The House narrowly passed a bill revising the Affordable Care Act (ACA) on Thursday, May 4. The Senate will review the American Health Care Act (ACHA) and write their own version of the bill, incorporating elements of the House bill into it.

Among the changes, most notable for businesses is the revised employer mandate. While the requirements of the employer mandate remain the same – employers with 50 or more full-time equivalent employees are required to provide minimum essential health coverage to those employees – the financial penalties for non-compliance have been reduced to zero. This means that employers who do not provide health coverage as required will not be financially penalized.

If the ACHA becomes law, businesses who drop coverage immediately could, under certain circumstances, potentially face lawsuits for the impermissible reduction in benefits under the Employee Retirement Income Security Act (ERISA). However, the ultimate fate of the bill is unknown this time. We will keep you updated as this process continues and explain your options going forward.