Democrats and worker advocacy groups say it opens the door for employers to pressure workers not to take overtime pay. And they warn there is no guarantee that workers would be able to take the extra time off when they want.
The bill has little chance of success in the Democratic-controlled Senate. President Obama has threatened a veto, saying the bill would not prevent employers from slashing overtime hours and doesn't offer enough protection for workers who may not want to receive compensatory time off.
The measure is part of a GOP agenda aimed at expanding the party's political appeal by offering conservative ideas to help average Americans on issues such as economic growth and job creation.
"This legislation simply removes an outdated federal policy that denies private-sector workers the flexibility they need to better balance family and work," Minnesota Rep. John Kline, head of the House Education and the Workforce Committee, said in a floor speech.
The plan would change the Fair Labor Standards Act of 1938, which requires covered employees to receive time-and-a-half pay for every hour over 40 within a work week. The proposal would allow workers to bank up to 160 hours of comp time per year that could be used to take time off for any reason.
Current law only allows private-sector workers to swap comp time for overtime pay within a single pay period. The time can't be saved up for use later in the year.
The GOP measure would let an employee decide to cash out his or her stored comp time at any point and forbids employers from coercing workers to take comp time instead of cash.