Time is running out for the federal program that allows U.S. employes to set their hours and, in some cases, work a four-day week.

Unless Congress votes to extend the so-called Alternate Work Schedule (AWS) system, it will expire July 21. If that happens, many of the half-million people on flexitime, compressed workdays or other versions of the AWS would be shifted back to the traditional Monday-through-Friday, eight-hour workday.

The Senate is scheduled to take up (and presumably pass) a bill by Sen. Ted Stevens (R-Alaska) next Tuesday. It would continue the AWS along lines approved by the Reagan administration, with agency heads having a 90-day period during which they could unilaterally cancel many existing AWS setups.

The plan is for the House to take up the Stevens bill, but that probably will not be until the second week in July.

Stevens' bill could run into trouble in the House if the Senate tacks on an amendment by Sen. William Armstrong (R-Colo.). Armstrong would extend the voluntary waiver of overtime after eight hours a day--which allows federal workers to work four 10-hour days--to employes of contractors doing government business. Organized labor opposes the proposal, which it sees as a foot in the door to wipe out overtime gains it took years to win.

If the Stevens plan gets bogged down in the House (because of the Armstrong overtime language), Rep. Geraldine Ferraro (D-N.Y.) has a bill ready that would extend the AWS program. Once the House approved the Ferraro bill, it would have go back to the Senate for its agreement.

Even if everything works smoothly -- always a dangerous assumption in this town -- the AWS program is in a race against the clock. If there are major snags in scheduling the legislation, the four-day week will be eliminated for everybody in late July. Some agencies probably will decide to drop staggered work hours and return to the standard eight-hour day.

The situation is not critical yet. But if you are a fan of flexitime, it is definitely time to start biting your nails.