Labor & Employment (Paid Leave)

HR 2870, the Working Families Flexibility Act of 2025, allows private sector employees to earn compensatory time off (instead of overtime pay) at a 1.5:1 ratio for hours worked beyond 40 in a week. Employees must agree in writing to this option before work begins, have worked at least 1,000 hours with the employer in the past year, and cannot accrue more than 160 hours of compensatory time. Employers must pay employees for unused compensatory time by January 31 each year (or a chosen 12-month period), at the higher of their regular pay rate when the time was earned or their final rate. The bill applies only to private employers (not government workers), includes penalties for employers who pressure employees about the option, and expires after five years.

This bill amends the Fair Labor Standards Act to exclude the value of employer-provided child or dependent care services from overtime pay calculations. It directly affects employers who offer such care benefits, allowing them to exclude the cost of these services when determining overtime wages for eligible employees. The key change adds a new exclusion (paragraph (9)) to the overtime calculation rules, meaning the value of childcare or elder care provided by an employer is no longer counted toward an employee's regular rate for overtime purposes. The change applies to overtime pay required for workweeks beginning after the bill's enactment date.