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House Committee Considers Revising the FLSA

On July 14, 2011, the House of Representatives Subcommittee on Workforce Protections held a hearing on the Fair Labor Standards Act (FLSA), to consider whether the Act is meeting the needs of the 21st Century workplace. The Fair Labor Standards Act, enacted in 1938, established a national minimum wage, guaranteed "time-and-a-half" overtime payment for certain jobs, and prohibited the employment of minors in "oppressive child labor."

Rep. Tim Walberg (R-MI), the Chairman of the Subcommittee, explained that the hearing was a manifestation of Republican concerns that the FLSA is outdated and ill-suited to meet the needs of today's economy. Three witnesses were invited to testify in favor of reforming the FLSA: J. Randall MacDonald, Senior Vice President of Human Resources at IBM, Richard Alfred, Chair of Seyfarth Shaw LLP's national Wage and Hour Litigation Practice Group, and Nobumichi Hara, Senior Vice President of Human Capital at Goodwill Industries.

All three witnesses testified that the FLSA hinders both job flexibility and new job opportunities. They argued that since several terms in the Act are left undefined, employers are forced to be cautious, to the detriment of their employees. They also spoke of an explosion of litigation in recent years as a result of such ambiguities in the Act. However, only Mr. MacDonald provided any suggestions for reform, which included modernizing the computer employee exception to include a broader range of 21st century computer-related duties, clarifying the "de minimis" exception to paid time, and expanding the exemption for well-compensated, commissioned inside salespeople.

Judy Conti, Federal Advocacy Coordinator for the National Employment Law Project, testified in favor of preserving the FLSA. She explained that although the nature of work has changed since the FLSA was enacted, people's fundamental right to a fair day's pay for a fair day's work remains unchanged. She insisted that the FLSA allows employers to accommodate flexible work schedules should they wish to, and that employers, and not the Act, are the root of the problem. Finally, she pushed for more vigorous enforcement of the Act.

Subcommittee Member Rep. Hirono (D-HI) was unconvinced that reforming the FLSA would improve economic growth and increase employment rates, predicting that instead, reforms would simply exempt more employees from protection under the Act, and thus allow employers to avoid paying for overtime work. In addition, she expressed her disappointment that a plaintiffs' lawyer was not invited to testify, in order to balance the opinions of defense lawyer, Richard Alfred.

This is likely the first of several discussions by the Subcommittee regarding this issue.