Working Families Flexibility Act of 2025

Working Families Flexibility Act of 2025

This bill would change federal labor law to give private-sector employees a new option for how they receive compensation for working overtime hours. Currently, under federal law, when an employee covered by overtime rules works more than 40 hours in a week, their employer must pay them 1.5 times their regular hourly wage for those extra hours. This bill would allow workers and employers to agree to an alternative arrangement: instead of receiving extra pay, an employee could choose to "bank" paid time off — at a rate of 1.5 hours of leave for every overtime hour worked — to use later.

It is important to note that this arrangement would be voluntary for the employee. Workers could not be forced to accept paid time off instead of overtime pay; they would have to agree to it in writing. Employees could also cash out their banked time at any point, and employers would be required to pay out any unused time off at the end of the agreement. The bill would apply to workers in the private sector — it would not affect government employees, who already have access to similar arrangements under existing law.

Supporters of this type of legislation generally argue it gives workers more flexibility to take time off when they need it. Critics have raised concerns that workers could face subtle pressure to choose time off over immediate pay, or that banking time could delay compensation. The bill has passed through the House Education and Workforce Committee and is now positioned for a full House vote.