The House Subcommittee on Workforce Protections (Education & the Workforce Committee) recently held a hearing where panelists outlined problems with and called for reform of the Fair Labor Standards Act.

The hearing entitled “The Fair Labor Standards Act:  Is it Meeting the Needs of the Twenty-First Century Workplace?”  The Fair Labor Standards Act (FLSA) sets forth the rules and regulations concerning minimum wage, the maximum number of hours worked in a week, and overtime pay.   The U.S. Department of Labor estimates more than 130 million workers are affected by the FLSA. 

The underlying reason for the hearing was to explore a common perception among businesses that although important, the FLSA is largely outdated and does not reflect the realities of modern technology or today’s economy.  The FLSA, which was enacted in 1938, has created an environment of uncertainty with employers facing a patchwork of conflicting interpretations of the law and employees facing difficulties understanding their rights under the law.  Rep. Tim Walberg (R-MI) who chairs the subcommittee noted “It is hard to imagine how a law intended for the workforce known to Henry Ford can serve the needs of a workplace shaped by the innovations of Bill Gates. “

Panelists who participated at the hearing described for members of the subcommittee how the FLSA is failing American workers, businesses and is costing America jobs.  J. Randall MacDonald of IBM stated that “if nothing is done to make necessary reforms to the FLSA, we sustain a disincentive for job growth in America hampering employees’ opportunity and giving U.S. employers another reason to invest elsewhere.” 

Another area of major concerns for businesses, including senior living, is the “white collar” exemptions under the FLSA.  The Act limits the normal work-week to 40 hours, requiring most employers to pay hourly overtime wages to employees who work longer than 40 hours. However, under section 13(a)(1) of the Act, employees working in a “bona fide executive, administrative, or professional capacity” are exempted from the wage and hour standards. These white-collar employees need not be paid overtime premium pay for a work-week longer than 40 hours.  The Department of Labor is responsible under the FLSA for setting the criteria for these exemptions and litigation in general has dramatically increased in recent years concerning the Department of Labor’s interpretations relating to “white collar” exemptions.   Panelist Richard Alfred of Seyfarth Shaw LLP in advocating for reform of the FLSA stated “clarification of employers’ obligations is needed to increase compliance and decrease the burdensome litigation that currently plagues even well intentioned employers.”

ALFA supports the House Education & the Workforce Committee’s efforts in addressing much needed and long overdue reforms of the  Fair Labor Standards Act.  For more information regarding the hearing, including testimony submitted by panel members, please visit “The Fair Labor Standards Act:  Is it Meeting the Needs of the Twenty-First Century Workplace?”

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