Working Families Flexibility Act of 2025

This bill amends the Fair Labor Standards Act of 1938 to establish a system where private sector employees can choose to receive compensatory time off (CTO) instead of monetary overtime compensation. Under this system, employees would accrue one and one-half hours of CTO for each hour of overtime worked, provided specific conditions are met. Employers may offer CTO if it is part of a collective bargaining agreement or a voluntary, written agreement with the employee, established before the overtime is performed. To be eligible, an employee must have worked at least 1,000 hours for the employer in the preceding 12 months. The bill limits accrued CTO to 160 hours , and employers must pay out any unused CTO annually, upon an employee's request, or upon termination of employment. The compensation rate for unused CTO will be the higher of the regular rate when earned or the employee's final regular rate. The legislation explicitly prohibits employers from intimidating or coercing employees regarding their choice to receive or use CTO. Furthermore, the Secretary of Labor must update employee notices, and the Comptroller General will provide annual reports on the program's implementation and enforcement for three years. All provisions of this Act, including its amendments, are scheduled to expire five years after its enactment.