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Fair Labor Standards Act (FLSA)

Date: May 15, 2008

The Fair Labor Standards Act of 1938 provides for minimum standards for both wages and overtime and mandates administrative procedures employers must follow to compensate employees for their time. The FLSA needs to be updated to give workers flexibility and to permit employers to reward workers financially for improving productivity and profitability. NFIB would like to see the FLSA changed with these goals:

  • Allow employers to give employees the option to take compensatory time in lieu of overtime
  • Allow employers to set up flexible work schedules with their employees
  • Remove obstacles that employers face when they attempt to provide performance bonuses for hourly workers

Family Time Flexibility/Compensatory Time

Small businesses often get ahead in the world by acting quickly and being flexible, and many of their employees share the same qualities. An NFIB Research Foundation survey found that after higher wages, small businesses were most likely to outbid their competition for labor by offering employees more flexible working conditions. In a world of two-income families, many employees appreciate employers who allow them the flexibility to manage their busy schedules.

But when it comes to overtime regulations, flexibility is not an option. The 1938 Fair Labor Standards Act prohibits employers from establishing voluntary flexible schedules that federal government employees have benefited from since 1978. Unlike federal employees, private-sector employees cannot "bank" their overtime hours for future use. They must fit work and vacation into the wage-and-hour box that the government dictates.

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