FLSA Reform Would Allow Flexibility, Revise Out-of-Date Rules
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.
That is why NFIB supported the Family Time Flexibility Act. It would give employers the option of offering employees the choice of up to 160 hours paid time off -- comp time -- each year in lieu of cash wages for overtime hours worked if the employee prefers to take compensatory time instead of overtime pay. Under this bill, an employee is always entitled to opt for the overtime cash wages.
An employee opting to take paid comp time in lieu of overtime cash wages receives paid time off at a rate of one-and-one-half hours of compensatory time per hour of overtime pay earned. For example, an employee working 48 hours in a week would receive either eight hours of pay at time-and-a-half or 12 hours of paid time off.
