On May 2, 2017, the United States House of Representatives (the House) passed the Working Families Flexibility Act (the Act), which would give workers the option of receiving paid time off (PTO) instead of time-and-a-half pay currently mandated by the Fair Labor Standards Act (the FLSA). The Act passed 227-197, largely along party lines, with no Democrats in favor of it and six Republicans opposed. The Act will now go to the Senate, where it is expected that the Act will face opposition from Senate Democrats. President Donald Trump has indicated that he would sign the Act into law if presented to him in its current form.
Under the FLSA, covered, non-exempt employees must receive overtime pay for hours worked over 40 in a workweek, at a rate not less than time and one-half their regular rate of pay. An employee’s regular rate of pay is determined on a piece-rate, salary, commission, or other basis, but the overtime pay rate must be calculated using the average hourly rate derived from the employee’s earnings. Employers determine the average hourly rate by dividing the total pay received by the employee in any work week by the 40 hours. The employer then pays the employee overtime for each hour over 40 at time-and-a-half of the average rate.