Working Families Flexibility Act of 2025

This bill would let private-sector workers choose paid time off (“comp time”) instead of extra overtime pay. For every overtime hour, a worker could bank 1.5 hours of comp time, but only if the worker and employer agree ahead of time, in writing or another verifiable way. The choice must be voluntary, and the worker must have worked at least 1,000 hours for that employer in the past year.

Workers could save up to 160 hours. Unused hours must be cashed out each year, and employers can cash out anything over 80 hours with 30 days’ notice. Workers can ask in writing to cash out at any time and must be paid within 30 days, including when they leave the job. Cash-outs must use the higher of the worker’s pay rate now or when the time was earned. Employers can’t force or pressure workers to take comp time or to use it; requested time off must be allowed within a reasonable period unless it would seriously disrupt operations. An employer can end a comp-time policy with 30 days’ notice but must pay out any banked hours. Breaking these rules can lead to repayment and penalties. The Labor Department must update the workplace notice within 30 days, and a federal review will track how this works. The program ends after five years unless renewed .

Key points

• Who is affected: Private-sector employees only; public agency workers are not included.
• What changes: Option to take comp time instead of overtime pay at 1.5 hours per OT hour; must follow a union contract or a written worker–employer agreement; the choice cannot be a condition of getting or keeping the job.
• When: Workplace notices updated within 30 days; federal reports start two years after enactment and continue for three years; the policy sunsets after five years.