I see it less of a employer’s discretion issue and more of a fairness issue.
If this law were passed then a unscrupulous employer could tell an employee “either work overtime and take the comp time or don’t work overtime”(and anecdotal reports have already substantiated that some employers with “comp time” policies in fact do this). It essentially puts a back door in to ensure that no matter how many hours an employee works, the employer never has to pay over $X per hour(which employers absolutely LOVE because it stabilizes the cost sections of the balance sheet, so there is a fairly strong motivation to do the “comp time or the highway” approach). They just take the extra hours and give them paid time off instead of extra cash.
To be fair, the bill does try to stop this. There is a bit in the summary that says
This passage would make it illegal to fire(or refuse to hire) someone for choosing to take cash over paid time off for compensation for overtime. Unfortunately, proving that you were fired for choosing cash instead of paid time off, or proving that you weren’t hired because you chose cash instead of PTO, is virtually impossible. I appreciate the sentiment behind this clause, but I just don’t see this as an effective control measure.
There are two problems with the bill as is. First is that it undermines the idea behind the “time and a half” laws. Extra work beyond 40 should result in extra CASH, not just “some extra compensation of some type”. A supermarket is not allowed to offset their employee’s overtime hours with coupons for free food, for example. A fair number of low to medium income families rely on the extra cash from some fairly regular overtime pay to cover expenses and occasional overtime work to cover incidental expenses(emergencies, etc). My brother and his wife did fairly well largely due to the fact that he worked 60 hours a week during his businesses busy season and got time and a half for each hour over 40. If his employer had given him no extra money for the overtime during the busy season and instead had simply promised extra time off during the slow season I’m not sure they would have done as well. After my father in law lost his long(nearly twenty years) battle with cancer, my mother in law took a job which paid overtime and worked obscene hours. She desperately needed the extra cash from overtime to make ends meet. Time-in-lieu wouldn’t have helped either of these situations.
The second problem is the employer’s discretion as to when the time is taken bits. As I noted above, with the current version of the law, the employer gets to choose when the time off will be taken. Jobs which are largely seasonal or cyclical could burn an employee at both ends during the busy season, give them tons of time off during the slow season, and never pay them more than minimum wage. As noted above, typically the single largest line item on an employers cost sheet is employee wages. If this line item fluxuates, then it is a nightmare to manage. Stabilizing it is a huge priority for most businesses. Being able to calculate a flat-rate wage for employees, regardless of the number of hours worked, would be a serious boon and would create real pressure on management to get employees to choose this option.
I feel there are good parts of the bill, and I agree with the idea of offering flexibility in compensation terms. I disagree with legislation which gives one side more discretion, or an incentive to use subtle pressures(comp time or the highway) to restrict the other side’s choices. As of now the bill allows for up to 160 hours of comp time to be accrued each year. It takes approximately 106 overtime hours to earn the maximum PTO benefit of 160 hours. The Christmas shopping season is approximately five weeks. If a seasonal establishment chose, they could work their employees 61 hours a week at a 40-hour week flat rate for those five weeks, and then give them the month of Febuary off. This particular scenario probably couldn’t happen because time has to be cashed out at the end of the year(according to the summary), but it certainly could happen to other industries whose busy seasons fall in other parts of the calendar year. The scenario might actually even be possible depending on the actual language of the bill. There may be langauge in there mentioning the fiscal year or some other way of avoiding the calendar year end cut off.
I don’t like being wholly negative, so what could we do to fix the bill? A couple of ideas come to mind.
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Make the time available to redeem at the employee’s discretion, with adequate notice to the employer and maybe in agreed-upon blocks. The amount of time needed as notice would be specified in the contract. This would go a LONG way towards making it fair and reducing the ability of either side to abuse it.
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Put some teeth in that “shall not be a condition of employment” bit. Not sure how, but things like “take comp time or hit the highway” should never be said when asking an employee to agree to work overtime. This dovetails with John Mace’s point about giving one side an unequal share of the discretion. Power corrupts, absolute power corrupts absolutely. There needs to be safeguards if we’re going to do this at all.
Enjoy,
Steven