The House Education and the Workforce Subcommittee on Workforce Protections held a March 6 hearing to examine whether the 1938 Fair Labor Standards Act (FLSA) provides enough flexibility to allow workers and employers to face the challenges of a modern economy.
The FLSA is the federal law that sets minimum wage, overtime pay, equal pay, and child labor standards for employers. Passed during the Depression, the law was intended to protect workers from undesirable working conditions and impossible hours. Originally, the law only applied to private sector employees; however in 1985, Congress amended the law to cover public sector employees. The FLSA also covers “strict standards for determining, paying and accruing compensatory or comp time, which is time given off work instead of cash payments.”
Subcommittee Chair Charlie Norwood (R-GA) opened the hearing, stating, “The composition of the workplace has changed dramatically and the nature of work has moved away from manufacturing-based to service-based” since the inception of the FLSA. “For many workers, the ability to balance work and family has now become the most important aspect of a job, outranking all other job-related issues,” he said.
Rep. Judy Biggert (R-IL) agreed, pointing out that “one of the more dramatic changes has been the increased number of women in the workforce, particularly those with young children,…highlighting the demand for greater flexibility in work schedules.”
“Yet, the options available under current law do not permit employees to work additional hours in order to accrue paid time off to be used at a later date,” she continued, adding that, “the law discourages employers from allowing workers to increase their hours in one week in order to account for time off during a subsequent week.”
Rep. Biggert is the sponsor of the Working Families Flexibility Act (H.R. 1982), which would amend the FLSA to allow workers in the private sector to use compensatory time off in lieu of monetary overtime compensation.
Ranking Member Major Owens (D-NY) said he was opposed to comp time legislation and pointed out that such legislation failed to be enacted during past Congresses. “It deserved to be defeated then and now,” he said, emphasizing that workers deserve paid leave, a raise in the minimum wage, and the right to refuse to work overtime.
Rep. Patsy Mink (D-HI) called choice between comp time and paid overtime “an empty basket.” She questioned, “Where in the FLSA is flexibility prohibited?”
The first witnesses on the panel outlined the demographic changes that have occurred in the workplace over the decades since the FLSA was enacted. Ron Bird of the Employment Policy Foundation told the subcommittee, “Most of today’s employment policies were constructed more that a half century ago, reflecting the experiences of the…1930s and 1940s.” At that time, workers were plentiful and jobs were scarce. Jobs were more routine and required less skill and formal education, and “workers of yesterday went to their jobs with similar expectations and needs,” he said. Continuing his testimony, Mr. Bird pointed out that one of the most dramatic changes has been the increased participation of women in the workforce. “Women’s labor force participation is now over 60 percent of the adult population, and will soon equal the labor force participation rate of men,” he said, adding that there is greater diversity in today’s workforce. “Overall, more than 69 percent of men and more than 57 percent of women are employed, but the patterns by age show even greater in-roads for women,” he said. “In the prime age category of 25 through 54, over 75 percent of women are employed,” he added.
The presence or absence of children in a household also impacts working arrangements. He said according to a survey of persons covered by the Family and Medical Leave Act, “leave taken to care for ill children was second only to the employee’s own illness as a reason for taking leave.”
Additionally, he told the subcommittee, “Because current federal workforce policies reflect the 1930s environment, Congress needs to reassess whether employment laws and regulations are meeting employees’ needs in the areas of flexible scheduling, innovative compensation, employment work structures, alternative work arrangements and decision making.”
Other witnesses on the panel included legal experts who analyzed the links between current law and the problems that employers face when they respond to employee needs for greater flexibility in the workplace.
William Kilberg of the U.S. Chamber of Commerce testified that the “substantive obligations presently placed on employers” by the FLSA makes it “too rigid for the modern workplace,” adding that it “outlaws many voluntary employer-employee efforts to adopt flexible family-friendly work schedules.”
He noted that, “One of the best examples of how the FLSA is working to the detriment of employees and employers in the modern workforce is in the area of overtime.” He pointed out that, “In the public sector, workers entitled to overtime compensation can elect to ‘exchange’ cash overtime payments for paid time off,” and although workers in the private sector are struggling with the “same competing demands,…the FLSA does not offer comparable flexibility to private sector employees.”
“Opponents of alternative overtime arrangements believe that employers will manipulate ‘comp time’ to their advantage, either by coercing employees into agreeing to non-traditional arrangements and/or by making it difficult for employees to use ‘comp time’ once accrued,” he said, adding, “Although I understand these concerns, I believe they are unwarranted.” He expressed support for H.R. 1982, which “prohibits employers from coercing employees into agreeing to ‘comp time’ arrangements, mandates that accrued ‘comp time’ be cashed out on a yearly basis, limits the total number of ‘comp time’ hours accruable, and entitles employees to cancel ‘comp time’ arrangements at any time at their sole discretion.”
Judith Conti of the D.C. Employment Justice Center disagreed, focusing her testimony on why “efforts to amend the FLSA, especially revisions allowing employers to give workers compensatory time off in lieu of cash overtime…would seriously weaken the fundamental protections of the FLSA that most workers rely on.”
She pointed out that, “Under section 7, a covered employee who works more than 40 hours per week is entitled to premium pay, time and one-half, for each overtime hour the employee works.” No matter how much or how little an employee makes, “working people in general cannot afford to trade wages for time off,” she contended, stressing that the “first and foremost principle is this: working people do not want to compromise their paycheck in order to have more time off from work.” She continued, “the choice of working more for less is a false choice, and one that working people are not prepared to make.” She added, “Without a union contract, only the wage and overtime provisions of the FLSA protect them from increasing their hours and receiving less pay.”
Ms. Conti recommended, “Only a law that gives them the right to exercise genuine choice over their schedules, without at the same time forcing them to lengthen their work week, will truly benefit them,” and added, “The many proposals we have seen in recent years that would allow employers to substitute comp time for overtime pay undermine these objectives.”
Additionally, she urged Congress to “build on what works…and expand the Family and Medical Leave Act to cover more workers and provide time off for family needs.” Unfortunately, she said, “Most families cannot afford to take full advantage of the unpaid leave under the FMLA” and proposed that “in the long run, families need some form of paid leave, some guarantee that flexibility will not come at so high a cost as to be meaningless.”