Sponsors (6)
Ask me about this bill
This is not an official government website.
Copyright © 2026 PLEJ LC. All rights reserved.
Amends Section 16 of the Fair Labor Standards Act (29 U.S.C. 216) by (1) modifying subsection (b) to add an exception referencing a new subsection (f), and (2) adding a new subsection (f) creating employer liability for violations of 29 U.S.C. 207(r)(4) relating to compensatory time, including specified compensatory-time damages and liquidated damages treatment.
Inserts a new subsection (r) into 29 U.S.C. § 207 authorizing compensatory time off for private employees in lieu of monetary overtime pay under specified conditions, setting accrual limits, payout rules, notice requirements, employee protections, and definitions.
Allows private-sector employees to choose paid compensatory time off (comp time) instead of receiving overtime pay and sets rules for how comp time is offered, accrued, paid out, and enforced. It creates a private-right remedy for workers when employers violate the comp-time rules, requires the Department of Labor to update employer notice materials quickly, mandates several years of Government Accountability Office reporting on how the new option is used, and automatically ends the law five years after enactment. The law requires employer notice and conduct rules, specifies how unused comp time must be valued and paid, gives employees a monetary remedy (including liquidated damages) for violations, and stages implementation and oversight steps (DOL notice update within 30 days; GAO reports beginning two years after enactment).
Inserts a new subsection (r) into Section 7 of the Fair Labor Standards Act (29 U.S.C. 207) creating rules for compensatory time off for private employees.
An employee may receive compensatory time off instead of monetary overtime pay at a rate of not less than 1.5 hours of comp time for each overtime hour.
An employer may provide compensatory time only if it is provided under an applicable collective bargaining agreement or, for non‑represented employees, under a written or otherwise verifiable agreement made before the work and entered into knowingly and voluntarily.
An employer must maintain a written or otherwise verifiable record of agreements with non‑represented employees in accordance with section 11(c).
An employee may accrue no more than 160 hours of compensatory time.
Who is affected and how:
Private-sector employees: The law allows many workers who qualify for overtime to elect compensatory time off instead of immediate overtime pay. That can give some employees more scheduling flexibility, but it may also risk reduced cash earnings if employees are pressured to take comp time or cannot use accumulated time before payout. The law creates a direct monetary remedy if employers violate comp-time rules.
Employers and businesses: Employers may prefer comp time as a scheduling tool, but they must implement policies, track accruals and usage, provide updated notices, and be prepared to pay out unused time and possible liquidated damages for violations. Compliance and recordkeeping costs will rise, and employers face new wage-liability risk.
Department of Labor: DOL must update required employer notice materials within 30 days and continue to enforce FLSA provisions, including the new comp-time rules. Enforcement workload could increase if adoption is widespread or disputes rise.
Courts and enforcement system: Wage-and-hour litigation may increase as employees or the DOL pursue violations; the statute creates a clear damages formula for comp-time violations, which may affect settlement dynamics and case valuations.
Government Accountability Office / Congress: GAO reporting will provide data on adoption and enforcement, informing lawmakers about impacts during the law's five-year trial period.
Potential benefits:
Potential risks and downsides:
Net effect:
Expand sections to see detailed analysis
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced March 26, 2025 by Mike Lee · Last progress March 26, 2025
Read twice and referred to the Committee on Health, Education, Labor, and Pensions.
Introduced in Senate