Working Families Flexibility Act of 2025
Introduced April 10, 2025 · Last action February 12, 2026
Plain English Summary
This bill amends the Fair Labor Standards Act to allow private-sector employers and employees to agree that employees receive compensatory time off (at least 1.5 hours for each overtime hour worked) instead of overtime pay. Employees must have worked at least 1,000 hours for their employer and must choose this arrangement voluntarily; they can withdraw from it at any time, request cash payment for unused time, and must receive their unused compensatory time in cash upon termination or by January 31 each year.
Who benefits
Private-sector employers who wish to reduce overtime pay obligations and manage labor costs by offering time off instead of cash compensation. Small and mid-sized businesses without sophisticated payroll systems may benefit from simplified overtime administration. Employees who prefer flexible scheduling over overtime pay—particularly those working multiple jobs or with caregiving responsibilities—gain scheduling options. Employees in industries with variable hours (retail, hospitality, healthcare) may benefit if time off aligns with their needs.
Who pays / loses
Employees who prefer overtime pay (the default under current law) but face workplace pressure or scheduling constraints that effectively require acceptance of compensatory time despite nominal voluntary choice. Lower-wage workers who live paycheck-to-paycheck and cannot afford to defer income lose immediate cash compensation. Employees at firms that discontinue compensatory time policies after adoption lose accrued flexibility. Workers in industries with high turnover (fast food, retail, hospitality) who may leave employment before using accrued compensatory time lose the time-off benefit. Enforcement and litigation resources that the Department of Labor allocates to compensatory time disputes are redirected from other wage-and-hour enforcement.
Funding & Lobbying Interests
The primary sponsor, Rep. Mary E. Miller (R-IL-15), received $404,695.65 in 'Other' contributions and $6,700 in law-firm contributions in the 2024 cycle, with $0 PAC contributions. The bill directly benefits employers seeking to reduce overtime labor costs; employer organizations, chambers of commerce, retail trade associations, hospitality industry groups, and business roundtables have historically lobbied for compensatory time policies in the private sector. No union PACs or worker advocacy groups appear in the sponsor's top contributors, suggesting organized labor opposition to the measure. The 'Other' category contributions likely include business interests with a stake in labor cost reduction.
Political Impact
Affected Groups
Private-sector employees earning overtime wages—approximately 8 to 10 million workers annually in industries with variable scheduling (retail, hospitality, healthcare, transportation, warehousing, manufacturing, and agriculture). Low-wage workers earning under $35,000 annually are disproportionately affected because they depend on overtime pay to meet living expenses and have less bargaining power to resist pressure to accept time off. Non-unionized workers, who lack collective bargaining protections, face greater individual pressure to accept compensatory time arrangements. Female workers in retail and hospitality, where compensatory time may conflict with childcare responsibilities, face particular scheduling constraints. Gig economy and contract workers without protections are excluded. High-turnover industries (fast food, temporary staffing) see employees unable to use accrued time before separation.
Political Subtext
Proponents (primarily business groups and Republican sponsors) argue compensatory time provides work-life balance flexibility, reduces unnecessary overtime costs that burden businesses, and gives employees choice in how to be compensated. They contend existing overtime rules are rigid and that time off may be more valuable than cash for working parents. Critics—including unions, worker advocacy organizations, and Democratic lawmakers—argue the bill is a rollback of overtime protections because: (1) individual employees have weak bargaining power against employers; (2) the 'voluntary' requirement is illusory when employers control scheduling and job security; (3) low-wage workers cannot afford to defer income and will face subtle coercion; (4) the definition of 'knowingly and voluntarily' lacks enforcement teeth; (5) compensatory time can expire or be forfeited if the employee leaves before using it; and (6) the bill strips the cash wage guarantee that has been central to wage-and-hour law since 1938. Non-partisan evidence from state-level compensatory time experiments (particularly in Arizona, Colorado, and Georgia) and federal sector experience shows: compensatory time is rarely taken in full, employees often lose accrued time upon termination, and low-wage workers are more likely to accept arrangements they later regret due to power imbalances. The Wage and Hour Division has noted enforcement challenges in distinguishing voluntary choice from implicit coercion in practice.
Real-World Stakes
If enacted, private employers can begin offering compensatory time in lieu of overtime pay (currently permitted only in the public sector under FLSA). Employees who accept will receive time off instead of an immediate 1.5x wage premium for overtime hours. State-level precedent: Arizona's compensatory time law (enacted 2016 for private employers) showed that low-wage workers in hospitality and retail disproportionately accepted time-off arrangements, often because employers framed the choice as 'opt in or lose preferred shifts.' Federal sector experience (where compensatory time has been permitted for decades) documents that accumulated compensatory time is frequently lost when employees change jobs or leave the workforce involuntarily; the National Treasury Employees Union has reported that federal employees regularly lose significant accrued balances. A 2012 GAO review of federal compensatory time found no reliable data on whether employees' stated preferences for time off versus pay were influenced by supervisor or organizational pressure. The bill includes a sunset clause (5 years) and requires GAO reporting, suggesting Congress intends to monitor outcomes. Enforcement risk: the prohibition on 'intimidation, threats, or coercion' (Section 7(t)(4)) is notoriously difficult for the Wage and Hour Division to prosecute; violations are detected only when employees file complaints, and proving subtle pressure in at-will employment is challenging. Workers in high-turnover industries (retail, fast food) face the greatest risk of losing accrued time without compensation if they separate employment. The $160 maximum accrual and January 31 payout requirement provide some protection against indefinite accumulation, but they do not prevent loss of time mid-year if an employee quits or is terminated.
Sponsor
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
Top contributing industries
Other$404,695.65
Law$6,700
Agriculture$5,104
Transportation$3,500
Healthcare$1,500
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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