What changed between these versions
A substantive modification to the bill's duration and eligibility. v2 removes the overall Act's 5-year sunset provision, but introduces a 5-year duration specifically for the private sector compensatory time off mechanism within the Fair Labor Standards Act. It also formalizes and clarifies employee eligibility criteria within the core provision, and adjusts the GAO reporting schedule.
Overview
A handful of significant changes primarily affecting the duration and eligibility of the compensatory time provisions, along with minor clarifications and reporting adjustments. · v2 restructures the application of the sunset provision, clarifying that the core compensatory time mechanism has a limited duration while the rest of the Act does not. It also refines employee eligibility definitions and adjusts reporting requirements.
The most significant change in v2 is the removal of the overall 5-year sunset provision for the entire Act (Section 6). Instead, a new 5-year duration is explicitly introduced within the core compensatory time off provision (Section 7(t)(1)(A) of the FLSA), meaning the compensatory time option itself will expire, but other amendments like remedies and notice requirements will not. Additionally, v2 formalizes the definition of an 'eligible employee' for compensatory time, moving and clarifying the 1,000-hour work requirement and public agency exclusion. Minor adjustments were also made to the GAO reporting schedule and language for notice to employees.
Deletions
This section stipulated that the entire Act and all amendments made by it would expire 5 years after its date of enactment.
The deletion of this section means that the administrative and enforcement provisions of the Act, such as remedies for violations (Section 3), notice requirements (Section 4), and GAO reporting (Section 5), will no longer sunset after 5 years. This significantly extends the operational life of these supporting mechanisms, even if the core compensatory time provision itself has a limited duration.
Modifications
This change imposes a direct 5-year time limit on the availability of private sector compensatory time, ensuring the core mechanism will expire unless reauthorized. It also centralizes and clarifies the eligibility requirements for employees, making it easier to determine who qualifies for compensatory time.
Before
The general rule simply stated that an employee may receive compensatory time off in lieu of monetary overtime compensation.
After
The general rule is now structured into two subparagraphs. Subparagraph (A) explicitly states that the compensatory time provision is effective only 'During the 5-year period beginning on the date of enactment of the Working Families Flexibility Act of 2025'. Subparagraph (B) defines an 'eligible employee' as one who is not a public agency employee and has worked at least 1,000 hours for the employer in the 12-month period ending on the date of agreement or receipt of compensatory time.
The explicit mention of 'employer (other than an employer that is a public agency)' reinforces the private sector focus. The relocation of eligibility criteria simplifies the structure, making the conditions for employers more focused on the agreement process itself rather than employee qualifications.
Before
This paragraph outlined the conditions under which an employer could provide compensatory time, including a requirement that the employee must have worked at least 1,000 hours for the employer.
After
This paragraph now explicitly states that an 'employer (other than an employer that is a public agency subject to subsection (o))' may provide compensatory time. The 1,000-hour work requirement and the exclusion of public agency employees are removed from this paragraph, as they are now part of the 'eligible employee' definition in Section 7(t)(1)(B).
This modification improves the readability and clarity of the compensation date requirements without altering the substantive deadlines or options for employers regarding the 12-month period. Employers and employees will have a clearer understanding of when unused compensatory time must be paid out.
Before
This paragraph specified that monetary compensation for unused compensatory time accrued in the preceding calendar year must be provided by January 31, or within 31 days after an employer-designated 12-month period.
After
This paragraph is restructured into two clauses. Clause (i) states that an employer shall provide monetary compensation not later than 31 days after a 'covered period'. Clause (ii) defines a 'covered period' as either a calendar year or another 12-month period determined and communicated by the employer.
This is a structural change, as the exclusion of public agency employees is now incorporated into the 'eligible employee' definition in Section 7(t)(1)(B) and the employer conditions in Section 7(t)(2). It does not alter the policy that public agency employees are not covered by this private sector compensatory time provision.
Before
This paragraph defined 'employee' as not including an employee of a public agency, and stated that 'overtime compensation', 'compensatory time', and 'compensatory time off' have meanings given by subsection (o)(7).
After
This paragraph now only states that 'overtime compensation', 'compensatory time', and 'compensatory time off' have the meanings given in subsection (o)(7). The exclusion of public agency employees from the definition of 'employee' is removed from this section.
This modification ensures that the Secretary of Labor's obligation to update notice materials remains relevant even if the specific regulation reference changes or is supplemented in the future, providing broader and more enduring applicability for the notice requirement.
Before
Required the Secretary of Labor to revise notice materials to reflect the Act's amendments, referencing 'regulations published in section 516.4 of title 29, Code of Federal Regulations (or any corresponding similar regulation or ruling)'.
After
Requires the Secretary of Labor to revise notice materials, referencing 'regulations published in section 516.4 of title 29, Code of Federal Regulations, and any corresponding similar regulations or rulings (or any successor regulations or rulings)'.
Under v1, there would be 4 reports (at years 2, 3, 4, 5). Under v2, there will be 5 reports (at years 2, 3, 4, 5, 6), providing an additional year of data collection and oversight. The clarification of '1-year period preceding each such report' ensures consistent data intervals.
Before
Required the Comptroller General to submit a report to Congress 'Beginning 2 years after the date of enactment of this Act and each of the 3 years thereafter', with respect to 'the reporting period immediately prior to each such report'.
After
Requires the Comptroller General to submit a report to Congress 'Not later than 2 years after the date of enactment of this Act and annually thereafter for 4 years', with respect to 'the 1-year period preceding each such report'.
Scope
Meaningful expansion or narrowing — Changes are scattered across the core policy section and the administrative sections of the bill. — v2 represents a meaningful refinement in policy direction regarding the duration of the compensatory time program. While v1's entire Act would sunset, v2 ensures only the core compensatory time mechanism has a limited life, allowing supporting provisions like remedies and reporting to continue indefinitely. — The changes primarily interact with the core compensatory time provision of the Fair Labor Standards Act, specifically regarding its duration and the definition of eligible participants. The removal of the overall Act's sunset has broad implications for the longevity of all provisions within the bill.
Impact analysis
Private sector employees eligible for compensatory time
Procedural change with a clear time limit on the benefit.
The availability of compensatory time off in lieu of monetary overtime is now explicitly limited to a 5-year period from the Act's enactment, whereas in v1, the entire Act, including this provision, would have sunset after 5 years. Eligibility criteria are also more formally defined within the core provision.
Private sector employers offering compensatory time
Procedural clarity and a time limit on the program.
Employers are now explicitly operating under a 5-year window for offering compensatory time. The conditions for offering comp time are clarified to exclude public agencies, and employee eligibility criteria are centralized.
The Department of Labor and the Comptroller General
Increased oversight duration and broader applicability for notice updates.
The Secretary of Labor's duty to update notices is broadened to cover successor regulations. The Comptroller General's reporting schedule is extended by one year, requiring a total of five annual reports instead of four, and the reporting period is clarified.