(a) Section 7(p)(3) of the FLSA provides that two individuals
employed in any occupation by the same public agency may agree, solely
at their option and with the approval of the public agency, to
substitute for one another during scheduled work hours in performance of
work in the same capacity. The hours worked shall be excluded by the
employer in the calculation of the hours for which the substituting
employee would otherwise be entitled to overtime compensation under the
Act. Where one employee substitutes for another, each employee will be
credited as if he or she had worked his or her normal work schedule for
that shift.
(b) The provisions of section 7(p)(3) apply only if employees'
decisions to substitute for one another are made freely and without
coercion, direct or implied. An employer may suggest that an employee
substitute or ``trade time'' with another employee working in the same
capacity during regularly scheduled hours, but each employee must be
free to refuse to perform such work without sanction and without being
required to explain or justify the decision. An employee's decision to
substitute will be considered to have been made at his/her sole option
when it has been made (i) without fear of reprisal or promise of reward
by the employer, and (ii) exclusively for the employee's own
convenience.
(c) A public agency which employs individuals who substitute or
``trade time'' under this subsection is not required to keep a record of
the hours of the substitute work.
(d) In order to qualify under section 7(p)(3), an agreement between
individuals employed by a public agency to substitute for one another at
their own option must be approved by the agency. This requires that the
agency be aware of the arrangement prior to the work being done, i.e.,
the employer must know what work is being done, by whom it is being
done, and where and when it is being done. Approval is manifest when the
employer is aware of the substitution and indicates approval in whatever
manner is customary.
