A bill to amend the Fair Labor Standards Act of 1938 to authorize the provision of compensatory time in lieu of overtime compensation for employees of State, political subdivisions of States, and interstate governmental agencies and for other purposes.

Amends the Fair Labor Standards Act of 1938 to allow State, local, or interstate governmental agencies to provide compensatory time in lieu of overtime compensation. Requires that such compensatory time be one and one-half hours for each hour of employment for which overtime compensation is required. Allows such compensatory time only if it is not prohibited under a collective bargaining agreement. Requires that each such employee, upon entering employment with the public agency, be given an opportunity to elect to receive compensatory time in lieu of overtime compensation during the 12-month period following such election.

Adds provisions relating to special detail work for fire protection and law enforcement employees (including prison security) of State, local, or intergovernmental agencies. Provides that any such employee who voluntarily agrees to be employed by another employer in fire protection, law enforcement, or related activities shall not be considered an employee of such State, local, or intergovernmental agency during the period of employment by the other employer.

Revises the definition of "employee" to exclude any volunteer for a State, local, or interstate governmental agency who volunteers to perform such services without compensation or for expenses or a nominal fee.

Provides that no State, local, or interstate governmental agency shall be liable under penalty provisions of the Act for violations (unless they are willful violations) of overtime requirements occurring before the date of enactment of this Act.