The notion of modifying the Fair Labor Standards Act to bring it up-to-date with today’s more mobile, flexible and technology-driven workforce took a step forward last Thursday in a hearing before the House Subcommittee on Workforce Protections.
The hearing was chaired by Rep. Tim Walberg, R-Mich., and included statements by J. Randall MacDonald, senior vice-president of HR for Armonk-N.Y.-based IBM Corp.; Nobumichi Hara, senior vice president of human capital for Phoenix-based Goodwill Industries of Central Arizona (speaking on behalf of the Society for Human Resource Management); Richard L. Alfred, partner at Seyfarth Shaw in Boston; and Judith M. Conti, federal advocacy coordinator for the National Employment Law Project in Washington. Here’s a link to the hearing’s agenda, plus full testimonies of all who participated.
Almost everyone in attendance urged for revisions to the law’s exempt and nonexempt definitions, overtime regulations and other wage-and-hour stipulations that they say prevent employers from competing in today’s marketplace.
Hara cited an example in which his company would have to pay overtime to a group of employees in the first week of their proposed biweekly schedule even though the second week (a lighter schedule) would have satisfied the two-week hourly requirement. “SHRM believes the FLSA hinders employers’ abilities to provide the flexibility that millions of nonexempt employees want,” Hara said.
MacDonald, who also chairs the HR Policy Association (representing more than 300 CHROs of the nation’s largest companies) testified that “there are areas of major disconnect between this 70-year-old labor law and today’s rapidly changing workplace environment.” (Here’s a link to his testimony.)
“The business world of 2011 barely resembles that of the 1930s and 1940s, while our primary labor law is becoming ever more outdated, having barely changed in all that time,” he said. “Simply put, this law is now a job killer. It yields advantages to global competitors without commensurate payback to U.S. workers.
“If nothing is done to make necessary reforms,” MacDonald said, “we sustain a disincentive for job growth in America, hampering employees’ opportunities and giving U.S. employers another reason to invest elsewhere. … The disconnect between the FLSA and the modern workplace will continue to grow, increasing tensions between employers, employees and regulators, with the only true beneficiary being the plaintiff’s bar.”
MacDonald urged Congress to make six specific changes to the law, including updating the definition of computer employees to include more duties, expanding exemptions to include “well-compensated, commissioned inside salespeople” and allowing a broad pre-emption of state and local wage and hour laws.
“Why is it,” MacDonald asked, “that a 70-year-old law, enacted in a different century, which was based on a different model of the U.S. economy, and at a time that pre-dates global competition and nearly all technology we use today, should not be modernized, clarified and made relevant for today’s economic realities?”