[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]


                      H.R. 1180, WORKING FAMILIES
                        FLEXIBILITY ACT OF 2017

=======================================================================

                                 HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                         COMMITTEE ON EDUCATION
                           AND THE WORKFORCE

                     U.S. House of Representatives

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

             HEARING HELD IN WASHINGTON, DC, APRIL 5, 2017

                               __________

                           Serial No. 115-13

                               __________

  Printed for the use of the Committee on Education and the Workforce
  
  
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 
  

                   Available via the World Wide Web:
                       www.gpo.gov/fdsys/browse/
           committee.action?chamber=house&committee=education
                                   or
            Committee address: http://edworkforce.house.gov
                
                
                              __________
                                

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
24-882 PDF                  WASHINGTON : 2017                     
          
----------------------------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Publishing Office, 
http://bookstore.gpo.gov. For more information, contact the GPO Customer Contact Center, 
U.S. Government Publishing Office. Phone 202-512-1800, or 866-512-1800 (toll-free). 
E-mail, [email protected].                
                
                
                
                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

Joe Wilson, South Carolina           Robert C. ``Bobby'' Scott, 
Duncan Hunter, California                Virginia
David P. Roe, Tennessee              Ranking Member
Glenn ``GT'' Thompson, Pennsylvania  Susan A. Davis, California
Tim Walberg, Michigan                Raul M. Grijalva, Arizona
Brett Guthrie, Kentucky              Joe Courtney, Connecticut
Todd Rokita, Indiana                 Marcia L. Fudge, Ohio
Lou Barletta, Pennsylvania           Jared Polis, Colorado
Luke Messer, Indiana                 Gregorio Kilili Camacho Sablan,
Bradley Byrne, Alabama                 Northern Mariana Islands
David Brat, Virginia                 Frederica S. Wilson, Florida
Glenn Grothman, Wisconsin            Suzanne Bonamici, Oregon
Steve Russell, Oklahoma              Mark Takano, California
Elise Stefanik, New York             Alma S. Adams, North Carolina
Rick W. Allen, Georgia               Mark DeSaulnier, California
Jason Lewis, Minnesota               Donald Norcross, New Jersey
Francis Rooney, Florida              Lisa Blunt Rochester, Delaware
Paul Mitchell, Michigan              Raja Krishnamoorthi, Illinois
Tom Garrett, Jr., Virginia           Carol Shea-Porter, New Hampshire
Lloyd K. Smucker, Pennsylvania       Adriano Espaillat, New York
A. Drew Ferguson, IV, Georgia

                      Brandon Renz, Staff Director
                 Denise Forte, Minority Staff Director
                                 ------                                

                 SUBCOMMITTEE ON WORKFORCE PROTECTIONS

                    BRADLEY BYRNE, Alabama, Chairman

Joe Wilson, South Carolina           Mark Takano, California,
Duncan Hunter, California              Ranking Member
David Brat, Virginia                 Raul M. Grijalva, Arizona
Glenn Grothman, Wisconsin            Alma S. Adams, North Carolina
Elise Stefanik, New York             Mark DeSaulnier, California
Francis Rooney, Florida              Donald Norcross, New Jersey
A. Drew Ferguson, IV, Georgia        Raja Krishnamoorthi, Illinois
                                     Carol Shea-Porter, New Hampshire
                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on April 5, 2017....................................     1

Statement of Members:
    Byrne, Hon. Bradley, Chairman, Subcommittee on Workforce 
      Protections................................................     1
        Prepared statement of....................................     3
    Takano, Hon. Mark, Ranking Member, Subcommittee on Workforce 
      Protections................................................     4
        Prepared statement of....................................     6

Statement of Witnesses:
    Christ, Ms. Leslie-Jo, Chief Resource Officer, WellStone 
      Behavioral Health, Huntsville, AL..........................     8
        Prepared statement of....................................    10
    Court, Mr. Leonard, Director, Crowe and Dunlevy, Oklahoma, 
      City, OK...................................................    47
        Prepared statement of....................................    49
    Frey, Ms. Crystal, Vice President of Human Resources, 
      Continental Realty Corporation, Baltimore, MD..............    17
        Prepared statement of....................................    20
    Shabo, Ms. Victoria S., National Partnership for Women and 
      Families, Washington, DC...................................    29
        Prepared statement of....................................    31

Additional Submissions:
    Chairman Byrne:
        Letter dated April 5, 2017, from College and University 
          Professional Association for Human Resources (cupa-hr).    76
        Letter dated April 5, 2017, from Retail Industry Leaders 
          Association (RILA).....................................    77
    Foxx, Hon. Virginia, a Representative in Congress from the 
      State of North Carolina, question submitted for the record.    94
    Scott, Hon. Robert C. ``Bobby'', a Representative in Congress 
      from the State of Virginia:
        Letter dated April 4, 2017, from American Federation of 
          State, County and Municipal Employees, AFL-CIO (AFSCME)    79
        Letter dated May 6, 2013, from National Organizations....    81
    Mr. Takano:
        Report from the Economic Policy Institute entitled 
          ``False choice for workers-Flexibility or overtime 
          pay''..................................................    89
    Ms. Shabo's response to question submitted for the record....    96

 
          H.R. 1180, WORKING FAMILIES FLEXIBILITY ACT OF 2017

                              ----------                              


                        Wednesday, April 5, 2017

                     U.S. House of Representatives

                Committee on Education and the Workforce

                 Subcommittee on Workforce Protections

                            Washington, D.C.

                              ----------                              

    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2175, Rayburn House Office Building, Hon. Bradley Byrne 
[chairman of the subcommittee] presiding.
    Present: Representatives Byrne, Grothman, Stefanik, 
Ferguson, Takano, DeSaulnier, Norcross, and Shea-Porter.
    Also Present: Representatives Foxx, Scott, and Bonamici.
    Staff Present: Bethany Aronhalt, Press Secretary; Andrew 
Banducci, Workforce Policy Counsel; Ed Gilroy, Director of 
Workforce Policy; Jessica Goodman, Legislative Assistant; 
Callie Harman, Legislative Assistant; Nancy Locke, Chief Clerk; 
John Martin, Professional Staff Member; Dominique McKay, Deputy 
Press Secretary; James Mullen, Director of Information 
Technology; Krisann Pearce, General Counsel; Lauren Reddington, 
Deputy Press Secretary; Molly McLaughlin Salmi, Deputy Director 
of Workforce Policy; Alissa Strawcutter, Deputy Clerk; Olivia 
Voslow, Staff Assistant; Joseph Wheeler, Professional Staff 
Member; Tylease Alli, Minority Clerk/Intern and Fellow 
Coordinator; Denise Forte, Minority Staff Director; Christine 
Godinez, Minority Staff Assistant; Eunice Ikene, Minority Labor 
Policy Advisor; Stephanie Lalle, Minority Press Assistant; 
Kevin McDermott, Minority Senior Labor Policy Advisor; Richard 
Miller, Minority Labor Policy Advisor; Veronique Pluviose, 
Minority General Counsel; and Elizabeth Watson, Minority 
Director of Labor Policy.
    Chairman Byrne. Good morning, everyone. A quorum being 
present, the subcommittee will come to order.
    I would like to begin by welcoming our witnesses. Some of 
you have traveled from across the country, including one from 
my home State of Alabama, to be here today. Welcome, and thank 
you for joining us.
    As I said at our first subcommittee hearing of the 115th 
Congress, the rules and regulations surrounding the Fair Labor 
Standards Act are simply outdated. We live in the twenty-first 
century, yet many of the rules governing America's workplaces 
were designed by those who lived during the Great Depression.
    It goes without saying that a lot has changed since then. 
Millennials now represent the majority of the workforce. Hard 
for me to believe, but that is true. In nearly half of two-
parent households, both mom and dad work full time. That is up 
from roughly 30 percent in 1970. Meanwhile, technological 
advances continue to rapidly change the very nature of how we 
work and stay connected to work.
    As a result, men and women today face a different set of 
challenges when it comes to balancing demands of their 
professional lives and their personal lives. There simply are 
not enough hours in the day. I hear that a lot from people. It 
is something I hear so often as I talk to neighbors and 
families in my district.
    As our colleague, Representative Martha Roby, once put it, 
``We cannot legislate another hour in the day.'' That is true, 
but we can do our part to ensure the Federal Government is not 
making life more difficult for workers and their families.
    That is why Representative Roby introduced the Working 
Families Flexibility Act, this commonsense proposal, would 
improve the quality of life of many hardworking men and women 
by removing outdated Federal restrictions imposed solely on the 
private sector.
    You see, for decades, public sector employers have been 
able to offer workers the choice between paid time off and cash 
wages for working overtime. That is because in 1985, Congress 
amended the Fair Labor Standards Act to give public sector 
employees greater flexibility.
    In fact, in a report filed by this very committee more than 
30 years ago, our Democrat colleagues wrote that this change in 
law recognized the ``mutual benefits'' of comp time for State 
and local governments and their employees. The Democrat 
Committee report even refers to the ``freedom and flexibility'' 
comp time would offer public sector workers.
    But under Federal law, it is still illegal to extend the 
same benefits to private sector employees who are eligible for 
overtime pay. This is not right and it is not fair. Private 
sector workers should be afforded the same freedom to do what 
is best for themselves and their families.
    For many Americans working paycheck to paycheck, earning 
some additional income is the choice that is best for them, but 
the Federal Government should not assume that is the best 
choice for everyone.
    Many individuals would welcome the opportunity to put in a 
few extra hours if it meant having more paid time off to catch 
a child's baseball game or dance recital. Others are in 
desperate need of greater flexibility to care for an aging 
relative, juggle work and parenting while a spouse is deployed 
overseas, or complete another semester of college while working 
full-time, something Mr. Takano and I have talked a lot about, 
helping people that are trying to go back to school.
    Every worker has a different story, but they all deserve 
the choice between more time and more money in the bank. They 
all deserve to choose the best option that meets their personal 
needs.
    Unfortunately, union leaders and special interest groups 
have tried desperately over the years to deny workers the 
freedom to make their choice. They have used no shortage of 
false and misleading rhetoric in the process, so allow me to 
briefly explain what this bill actually does.
    This bill preserves the 40-hour work week and existing 
overtime protections. I will say it again. This bill preserves 
the 40-hour work week and existing overtime protections. For 
workers who elect to receive paid time off, for workers who 
elect to receive paid time off, their leave would accrue at the 
same rate, time-and-a-half, as wages.
    The bill includes strong protections to ensure the use of 
comp time is completely voluntary. Workers can switch back to 
receiving cash wages whenever they choose, and they are allowed 
to cash out their comp time for any reason at any time.
    Additionally, it is up to the employee to decide when to 
use his or her time off, so long as reasonable notice is 
provided and the request is not overly disruptive. This is the 
same commonsense standard that exists in the public sector, and 
I suspect it is the same standard that is applied in most of 
our congressional offices.
    This bill also includes important protections to prevent 
employers from intimidating or coercing employees into 
receiving paid leave in lieu of cash wages, and the Department 
of Labor would have full authority to enforce those 
protections.
    This legislation is ultimately about freedom, choice, and 
fairness. An antiquated Federal law should not limit the 
ability of private sector employees to better balance work and 
family.
    Democrats and Republicans came together more than 30 years 
ago to amend the law to provide more choices for public sector 
workers, and it is time we did the same thing for workers in 
the private sector.
    This is not a new or radical idea either. In fact, 
President Bill Clinton had his own comp time proposal during 
his presidency.
    I want to thank Representative Roby for leading this 
effort. Improving workplace flexibility is one step we can take 
to make a positive difference in the lives of American 
families, and it does not require another government program, 
another Federal mandate, or onerous regulations that burden 
small businesses. That is why I support the Working Families 
Flexibility Act, and I urge all of my colleagues to do the 
same.
    I look forward to our discussion today, and I will now 
yield to the ranking member, Mr. Takano, for his opening 
remarks.
    [The statement of Chairman Byrne follows:]

  Prepared Statement of Hon. Bradley Byrne, Chairman, Subcommittee on 
                         Workforce Protections

    Good morning everyone. I'd like to begin by welcoming our 
witnesses. Some of you have traveled across the country--including from 
my home state of Alabama--to be here today. Welcome, and thank you for 
joining us.
    As I said at our first subcommittee hearing of the 115th Congress, 
``the rules and regulations surrounding the Fair Labor Standards Act 
are simply outdated.'' We live in the 21st century, yet many of the 
rules governing America's workplaces were designed by those who lived 
during the Great Depression.
    It goes without saying that a lot has changed since then. 
Millennials now represent the majority of the workforce. In nearly half 
of two-parent households, both mom and dad work full time. That's up 
from roughly 30 percent in 1970. Meanwhile, technological advances 
continue to rapidly change the very nature of how we work and stay 
connected to work.
    As a result, men and women today face a different set of challenges 
when it comes to balancing the demands of their professional lives and 
personal lives. ``There simply aren't enough hours in the day.'' It's 
something I hear often as I talk to neighbors and families in my 
district. As our colleague, Representative Martha Roby, once put it, 
``We can't legislate another hour in the day.'' That's true, but we can 
do our part to ensure the federal government isn't making life more 
difficult for workers and their families.
    That's why Representative Roby introduced the Working Families 
Flexibility Act. This commonsense proposal would improve the quality of 
life of many hardworking men and women by removing outdated federal 
restrictions imposed solely on the private sector.
    For decades, public-sector employers have been able to offer 
workers the choice between paid time off and cash wages for working 
overtime. That's because in 1985, Congress amended the Fair Labor 
Standards Act to give public-sector employees greater flexibility. In 
fact, in a report filed by this very committee more than 30 years ago, 
our Democrat colleagues wrote that this change in the law recognized 
the ``mutual benefits'' of comp time for state and local governments 
and their employees. The Democrat committee report even refers to the 
``freedom and flexibility'' comp time would offer public-sector 
workers.
    But under federal law, it is still illegal to extend the same 
benefits to private-sector employees who are eligible for overtime pay. 
This isn't right, and it isn't fair. Private-sector workers should be 
afforded the same freedom to do what's best for themselves and their 
families. For many Americans working paycheck to paycheck, earning some 
additional income is the choice that's best for them. But the federal 
government shouldn't assume that's the best choice for everyone.
    Many individuals would welcome the opportunity to put in a few 
extra hours, if it meant having more paid time off to catch a child's 
baseball game or dance recital. Others are in desperate need of greater 
flexibility to care for an aging relative, juggle work and parenting 
while a spouse is deployed overseas, or complete another semester of 
college while working full-time.
    Every worker has a different story. But they all deserve the choice 
between more time and more money in the bank. They all deserve to 
choose the best option that meets their personal needs.
    Unfortunately, union leaders and special interest groups have tried 
desperately over the years to deny workers the freedom to make that 
choice. They've used no shortage of false and misleading rhetoric in 
the process, so allow me to briefly explain what this bill actually 
does.
    This bill preserves the 40-hour work week and existing overtime 
protections. For workers who elect to receive paid time off, their 
leave would accrue at the same rate--time-and-a-half--as wages.
    The bill includes strong protections to ensure the use of comp time 
is completely voluntary. Workers can switch back to receiving cash 
wages whenever they choose, and they are allowed to cash out their comp 
time for any reason at any time.
    Additionally, it is up to the employee to decide when to use his or 
her time off, so long as reasonable notice is provided and the request 
is not overly disruptive. This is the same commonsense standard that 
exists in the public sector, and I suspect it's the same standard that 
is applied in most of our congressional offices.
    This bill also includes important protections to prevent employers 
from intimidating or coercing employees into receiving paid leave in 
lieu of cash wages, and the Department of Labor would have full 
authority to enforce those protections.
    This legislation is ultimately about freedom, choice, and fairness. 
An antiquated federal law shouldn't limit the ability of private-sector 
employees to better balance work and family. Democrats and Republicans 
came together more than 30 years ago to amend the law to provide more 
choices for public-sector workers, and it's time we did the same for 
workers in the private sector. This isn't a new or radical idea either. 
In fact, President Bill Clinton had his own comp time proposal during 
his presidency.
    I want to thank Representative Roby for leading this effort. 
Improving workplace flexibility is one step we can take to make a 
positive difference in the lives of American families--and it doesn't 
require another government program, a federal mandate, or onerous 
regulations that burden small businesses. That is why I support the 
Working Families Flexibility Act, and I urge all of my colleagues to do 
the same.
    I look forward to our discussion today, and I will now yield to 
Ranking Member Takano for his opening remarks.
                                 ______
                                 
    Mr. Takano. Well, thank you, Chairman Byrne. With all due 
respect, H.R. 1180 needs to be renamed ``The Betrayal of 
Working Families Act.'' It creates new rights for employers to 
withhold workers' hard-earned overtime pay, but really no new 
rights for employees.
    Right now, an employee who takes time off from work can use 
her overtime pay to cover her expenses while she is out. She 
can put her overtime pay in the bank where it will earn 
interest, and take time off from work later, using that 
paycheck plus the interest to cover her expenses. It is that 
simple. Nothing is as fungible or as convenient as cash.
    The Betrayal of Working Families Act makes things much more 
complicated. If instead of getting overtime pay, she accepts 
her employer's offer of comp time, she will not get a paycheck 
for her overtime. She will get an IOU. Many workers will feel 
compelled to accept comp time given the power differential 
between nonunion employees and their employers.
    By accepting comp time, she would forfeit her overtime pay 
and the interest she would have earned if she put that paycheck 
in the bank. Instead of paying her for the overtime when she 
earned it, at some point in the future, which could be more 
than a year later, her employer may let her take comp time, 
returning her withheld wages, minus any interest the employer 
earned while holding on to her paycheck.
    She has essentially given her employer an interest-free 
loan repayable only when the employer decides it is convenient, 
not when she needs the money or the time off from work.
    I have a slide here that shows how this could play out 
across a company. Now ACME Inc., a hypothetical company, could 
get 160 free comp time hours from each of its 200,000 FLSA-
covered employees at $7.25 an hour from each employee. That is 
$232 million ACME Inc. would not have to pay to its workers for 
about a year after they earned it. To get an equivalent loan 
from a bank, ACME Inc. would have to pay roughly 6 percent 
interest. ACME Inc. saves $14 million by relying on comp time 
to take out an interest-free loan from its employees instead.
    As this example illustrates, the Betrayal of Working 
Families Act is simply another attempt by congressional 
Republicans to give every advantage to corporations and special 
interests, and take, take, take from families who have the 
least to spare.
    Since January, President Trump and congressional 
Republicans have broken promise after promise to working 
people. President Trump said in his inaugural address, ``To all 
Americans, in every city near and far, small and large, from 
mountain to mountain and from ocean to ocean, hear these words: 
you will never be ignored again. Your voice, your hopes, and 
your dreams will define our American destiny.''
    This could not be further from the truth. The majority's 
plan to repeal the ACA has threatened 24 million Americans' 
access to healthcare. Their attack on rules to protect 
retirement security has undercut millions of Americans' ability 
to save for old age, and they fought the overtime rule which 
would give millions of hardworking Americans a raise. Up next, 
President Trump wants tax breaks for the wealthy and to gut 
programs like workforce training that would help people get 
good-paying jobs.
    Instead of rigging the economy in favor of the rich and 
powerful, it is time to rewrite the rules to make the economy 
work for everyday Americans.
    Hardworking Americans made our Nation's productivity rise 
by more than 70 percent over the past four decades. Yet, it is 
CEOs' pay that has risen by nearly 1,000 percent during that 
same period while workers' wages barely grow. Special interests 
do not need more leverage and power. It is hardworking 
Americans' turn to finally get a break.
    Instead of bringing up legislation that diminishes people's 
ability to provide for and to care for their families, this 
Committee should bring up legislation that strengthens the Fair 
Labor Standards Act by raising the minimum wage, restoring the 
overtime salary threshold, ensuring equal pay, providing truly 
flexible and predictable schedules and paid leave, as well as 
strengthening workers' ability to bargain for a better life. 
These solutions are clear and, unfortunately, H.R. 1180 is not 
among them.
    Thank you. I yield back, Mr. Chairman.
    [The statement of Mr. Takano follows:]

Prepared Statement of Hon. Mark Takano, Ranking Member, Subcommittee on 
                         Workforce Protections

    Thank you, Chairman Byrne. H.R. 1180 should be renamed the Betrayal 
of Working Families Act. It creates new rights for employers to 
withhold workers' hard-earned overtime pay, but no new rights for 
employees.
    Right now, an employee who takes time off from work can use her 
overtime pay to cover her expenses while she's out. She can put her 
overtime pay in the bank where it will earn interest, and take time off 
from work later--using that paycheck, plus the interest to cover her 
expenses.
    It's that simple. Nothing is as fungible or as convenient as cash.
    The Betrayal of Working Families Act makes things much more 
complicated. If, instead of getting overtime pay, she accepts her 
employer's offer of comp time - she won't get a paycheck for her 
overtime, she'll get an IOU. And many workers will feel compelled to 
accept comp time, given the power differential between non-union 
employees and their employers.
    By accepting comp time, she would forfeit her overtime pay and the 
interest she would have earned if she put that paycheck in the bank. 
Instead of paying her for the overtime when she earned it, at some 
point in the future--which could be more than a year later, her 
employer may let her take comp time, returning her withheld wages--
minus any interest the employer earned while holding onto her paycheck.
    She has essentially given her employer an interest-free loan 
repayable only when the employer decides it's convenient-not when she 
needs the money or the time off from work.
    I have a slide here that shows how this could play out across a 
company.
    ACME Inc., a hypothetical company, could get 160 free comp time 
hours from each of its 200,000 FLSA-covered employees at $7.25 an hour 
from each employee.
    That's $232 million dollars ACME, Inc. wouldn't have to pay to its 
workers for about a year after they earned it. To get an equivalent 
loan from a bank, ACME, Inc. would have to pay roughly 6% interest.
    ACME, Inc. saves $14 million dollars by relying on comp time to 
take out an interest-free loan from its employees instead.
    As this example illustrates, the Betrayal of Working Families Act 
is simply another attempt by Congressional Republicans to give every 
advantage to corporations and special interests, and take, take, take 
from families who have the least to spare.
    Since January, President Trump and congressional Republicans have 
broken promise after promise to working people. President Trump said in 
his inaugural address: ``to all Americans, in every city near and far, 
small and large, from mountain to mountain, and from ocean to ocean, 
hear these words: You will never be ignored again. Your voice, your 
hopes, and your dreams will define our American destiny.''
    This could not be farther from the truth. The Majority's plan to 
repeal the ACA has threatened 24 million Americans' access to health 
care, their attack on rules to protect retirement security has undercut 
millions of Americans' ability to save for old age, and they've fought 
the overtime rule which would give millions of hardworking Americans a 
raise. Up next, President Trump wants tax breaks for the wealthy and to 
gut programs like workforce training that would help people get good-
paying jobs.
    Instead of rigging the economy in favor of the rich and powerful, 
it's time to rewrite the rules to make the economy work for everyday 
Americans.
    Hardworking Americans made our nation's productivity rise by more 
than 70 percent over the past four decades. And yet it is CEOs' pay 
that has risen by nearly 1000 percent during that same period, while 
workers' wages barely grow.
    Special interests don't need more leverage and power--it's 
hardworking Americans' turn to finally get a break.
    Instead of bringing up legislation that diminishes people's ability 
to provide for and care for their families, this committee should bring 
up legislation that strengthens the Fair Labor Standards Act by raising 
the minimum wage, restoring the overtime salary threshold, ensuring 
equal pay, providing truly flexible and predictable schedules and paid 
leave, as well as strengthening workers' ability to bargain for a 
better life. The solutions are very clear--and H.R. 1180 is not among 
them.
                                 ______
                                 
    Chairman Byrne. Thank you, Mr. Takano. Pursuant to 
Committee Rule 7(c), all subcommittee members will be permitted 
to submit written statements to be included in the permanent 
hearing record, and without objection, the hearing record will 
remain open for 14 days to allow statements, questions for the 
record, and other extraneous material referenced during the 
hearing to be submitted in the official hearing record.
    It is now my pleasure to introduce today's witnesses. Ms. 
Leslie-Jo Boyd Christ serves as chief resource officer at 
WellStone Behavioral Health in Huntsville, Alabama.
    Ms. Crystal Frey is vice president of human resources at 
Continental Realty Corporation, Baltimore, Maryland, and is 
testifying on behalf of the Society for Human Resource 
Management, or SHRM.
    Ms. Vicki Shabo is vice president at the National 
Partnership for Women & Families here in Washington, D.C.
    Mr. Leonard Court is a director at Crowe & Dunlevy in 
Oklahoma City, Oklahoma, and is testifying on behalf of the 
U.S. Chamber of Commerce.
    I will now ask our witnesses to raise your right hand.
    [Witnesses sworn.]
    Chairman Byrne. Let the record reflect the witnesses 
answered in the affirmative. Before I recognize you to provide 
your testimony, let me explain our lighting system.
    You each will have five minutes to present your testimony. 
When you begin, the light in front of you will turn green. When 
one minute is left, the light will turn yellow. When your time 
has expired, the light will turn red. At that point, I will ask 
you to wrap up your remarks as best as you are able. After you 
have testified, members will each have five minutes to ask 
questions.
    I am not real heavy with the gavel, so I am not going to 
right at five minutes just whack you right down. That is the 
time to really kind of wrap it up. If you would, please, try to 
keep as close to that as you can. Are we clear on that? Okay.
    Let's start with our first witness. That will be you, Ms. 
Christ.

  TESTIMONY OF LESLIE-JO BOYD CHRIST, CHIEF RESOURCE OFFICER, 
        WELLSTONE BEHAVIORAL HEALTH, HUNTSVILLE, ALABAMA

    Ms. Christ. Chairman Byrne, Ranking Member Takano, and 
members of the Committee, it's an honor to be here with you 
today to discuss comp time.
    I serve as the chief resource officer at WellStone 
Behavioral Health, a public nonprofit community mental health 
center in Huntsville, Alabama, where I have worked for the past 
18 years. Prior to my H.R. career, I proudly served our country 
for 24 years, including service in Operation Iraqi Freedom.
    At WellStone, we strive to restore hope and healthy living 
to our clients. To fulfill this mission, our 300 employees 
provide services to patients with serious emotional 
disturbances and mental illnesses. In 2016, our dedicated 
employees served 9,000 clients, logging nearly 200,000 service 
hours.
    As a healthcare facility, we're not only dedicated to 
patient care, but we're also committed to the wellbeing of our 
employees. We offer many programs and benefits, including 
generous paid leave and flexible work options, to support our 
employees' diverse work/life needs.
    Our benefits, which are outlined in greater detail in my 
written statement, have helped us achieve several awards and 
are critical to our employee and family friendly culture.
    Mr. Chairman, because our employees provide critical mental 
health services to members of the community during times of 
crisis, I personally work with many employees to address their 
own specific work/life needs, which is why I'm here today.
    I believe many of my employees would benefit from having 
the choice of comp time, especially since 63 percent of our 
workforce are nonexempt, and women account for 72 percent of 
our total workforce.
    Allow me to give you three recent examples of where I 
believe comp time would have been helpful to WellStone 
employees.
    Just after starting at WellStone, one of our clerical staff 
members learned she was pregnant, but not yet eligible for paid 
leave under our short-term disability plan. While working on a 
major project, she incurred significant overtime, and asked if 
we could just waive the overtime and credit her that time, so 
she could take off and receive pay during her maternity leave. 
It was difficult telling this single mom-to-be that this 
arrangement was not an option under the current law.
    My son, he's an on-call WellStone employee in our acute 
care setting, and he often earns overtime pay. Like any other 
18-year-old living at home, he tends to spend his overtime pay 
when he earns it, but if he were allowed to choose comp time, 
he's told me he would rather take the comp time to have a leave 
savings plan, where he could build a bank of leave, and if he 
needed to use the leave, he could use it or he could get a lump 
sum pay out at the end of the year.
    Many employees work side by side with the Huntsville Police 
Department at my organization, who you know benefit from 
receiving overtime pay or comp time. It is not uncommon for the 
officers to discuss their comp time arrangements with my 
employees, who then come to me on a regular basis asking why we 
don't offer comp time as an option for staff members.
    These employees believe it's WellStone denying them of this 
option, until I explain it's the Federal law, the Fair Labor 
Standards Act, to be exact, that prohibits comp time for the 
private sector, yet allows it for the public sector.
    Mr. Chairman, these are just a few examples that 
demonstrate WellStone's interest in comp time. There have been 
many others, and I expect there will be more in the future, as 
our employees seek choices in navigating their work/life 
obligations.
    That's why I strongly support H.R. 1180, the Working 
Families Flexibility Act, introduced by my home State 
Representative, Martha Roby. This bill would give both 
employers and employees choices.
    Under the legislation, employers decide whether they even 
offer the comp time arrangement, and if an employer does offer 
it, each employee can decide whether to participate in the comp 
time program, and we know comp time works. After all, it's been 
a success in the public sector for decades.
    Updating FLSA to give all employers and employees this 
option, to me, frankly, is a no-brainer. After all, Mr. 
Chairman, employers like WellStone are always looking for ways 
to assist employees in their work/life needs, to drive 
recruitment, retention, and engagement.
    Since no two workplaces are the same, it is important for 
employers to have many opportunities and options as possible to 
support the needs unique to their workforce and their 
employees.
    Therefore, I hope Congress will advance this reasonable 
legislation, and I thank you for this opportunity, and I'm 
happy to answer any questions you might have.
    [The statement of Ms. Christ follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Byrne. Thank you, Ms. Christ. Ms. Frey?

 TESTIMONY OF CRYSTAL FREY, VICE PRESIDENT OF HUMAN RESOURCES, 
CONTINENTAL REALTY CORPORATION, BALTIMORE, MARYLAND, ON BEHALF 
          OF THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT

    Ms. Frey. Good morning, Chairman Byrne, Ranking Member 
Takano, and members of the Committee. I am Crystal Frey, the 
vice president of human resources at Continental Realty 
Corporation, or CRC, located in Baltimore, Maryland.
    I appear before you today on behalf of the Society for 
Human Resource Management, or SHRM, of which I've been a member 
for 21 years.
    I appreciate the opportunity to provide input into H.R. 
1180, the Working Families Flexibility Act, a bill to allow 
private sector employers the opportunity to provide paid leave 
for overtime hours worked.
    Mr. Chairman, as you know, comp time has been an option for 
nonexempt employees in the public sector for more than three 
decades, so the concept of giving employees the choice to 
select paid time off for overtime hours worked is nothing new.
    The FLSA was enacted in the 1930s, and it reflects the 
realities of the industrial workplace, not the workplace of the 
twenty-first century. It's time to amend this outdated statute 
to extend the benefit to the private sector.
    The increased diversity and complexity of the twenty-first 
century is driving the need for more workplace flexibility, 
including paid leave and flexible work options.
    Fifty-six percent of parents struggle to balance work and 
family responsibilities, 50 percent of fathers say they spend 
too little time with their children, and 40 percent of mothers 
say they always feel rushed. Because employees are juggling 
more responsibilities between work and home, public policy 
should encourage or allow employers to offer voluntary 
workplace flexibility options that would help employees meet 
their work/life obligations.
    That's why I'm pleased to join SHRM in supporting H.R. 
1180. This bill would amend the FLSA to permit the private 
sector to offer employees the voluntary choice of taking 
overtime and cash payments, as they do today, or in the form of 
paid time off from work. Paid time off would accrue at a rate 
of 1.5 hours for each hour of overtime worked, allowing 
employees to accrue up to 160 hours of comp time per year.
    An employer, however, could choose to cash out the comp 
time after 80 hours after providing the employee with 30 days' 
written notice, and all comp time would have to cash out at 
year end.
    The bill also includes several important employee 
protections. In the ever-changing real estate industry, 
offering workplace flexibility is key to recruiting and 
retaining top talent. This is especially true in my company, 
which competes for talent in the Washington, D.C., metro area, 
where many Federal workers can use comp time.
    CRC is committed to the success of our employees at work 
and at home, which is why we have a retention rate of over 80 
percent and our average tenure is seven years' employment. CRC 
has received numerous awards, which speaks to our culture, but, 
more importantly, they demonstrate our commitment to our 
employees.
    CRC is invested in its workforce and is always looking for 
additional opportunities to provide employees with flexibility. 
Many CRC employees have inquired about comp time, and I can 
tell you it's incredibly difficult to explain to employees why 
they can't choose for themselves whether to take overtime pay 
or paid time off for hours worked over 40 in a week.
    Many CRC employees would benefit from having the option of 
comp time, particularly those who work at our commercial 
properties. Often these employees work overtime to respond to 
situations created by inclement weather or maintenance related 
issues. The ability to bank paid time off would give these 
employees a sense of reassurance knowing they could take time 
off when they need it most and receive pay.
    Mr. Chairman, all the workplace flexibility practices 
outlined in my written statement are voluntary. We don't have 
to offer these benefits, but we do, because they work well for 
our employees, and help us attract and retain the best people.
    The choice of offering comp time arrangements to employees 
would provide us with another workplace flexibility tool to 
support our employees and their diverse needs.
    That's why H.R. 1180's voluntary approach to comp time for 
employers and employees is so important. If enacted, this bill 
would give employers the option of offering a comp time program 
and employees the choice of whether to participate in a comp 
time arrangement.
    SHRM strongly supports comp time as outlined in H.R. 1180 
because it meets our core workplace flexibility principles, for 
flexibility to be effective, it must work for the employers and 
the employees. While advancing this bill is a step in the right 
direction, SHRM also welcomes a broader conversation on 
additional ways that public policy can facilitate greater 
voluntary adoption of workplace flexibility programs.
    Thank you so much for your time, and I look forward to your 
questions.
    [The statement of Ms. Frey follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Byrne. Thank you, Ms. Frey. Ms. Shabo?

   TESTIMONY OF VICTORIA S. SHABO, VICE PRESIDENT, NATIONAL 
        PARTNERSHIP FOR WOMEN & FAMILIES, WASHINGTON, DC

    Ms. Shabo. Good morning, Mr. Chairman and Ranking Member. 
I'm Vicki Shabo, vice president at the National Partnership for 
Women & Families, which is a nonprofit, nonpartisan advocacy 
organization here in Washington, D.C.
    For more than 45 years, we have fought for every major 
Federal policy advance that has helped women and families. It's 
been said here many times, most of us hold jobs, both women and 
men, in order to support ourselves and our families.
    Most of us also provide care to loved ones. Seventy percent 
of children live in households where all parents work. Tens of 
millions of people provide unpaid care to older adults in their 
families each year and hold paying jobs at the same time.
    In short, work/family challenges connect us all, but 
workplace policies too often fall short by failing to provide 
fair wages, predictable schedules, and paid time to recover 
from illness and care for our loved ones.
    The employees at Ms. Christ's company and Ms. Frey's are 
quite lucky compared to millions of workers across the country 
who don't have even these benefits that you all provide, and 
I'm so grateful that you do.
    Even SHRM's own research released earlier last month shows 
that practices are not getting better for most workers in this 
country. America's working people haven't reaped the benefits 
of a growing economy. Over the past four decades, workforce 
productivity has increased by more than 70 percent, while 
hourly compensation has increased by just about 11 percent.
    This has meant more stress and less opportunity for workers 
across the country, in rural areas and small towns and in big 
cities alike, and it's meant less predictability, less 
security, and less independence for those families now and in 
the future.
    This isn't the America that your constituents or any of us 
deserve. There's no question that lawmakers must update our 
workplace policies to meet the needs of 21st century families, 
but H.R. 1180 would be a giant step in the wrong direction. 
Instead of investing in and empowering people with higher 
wages, this so-called ``flexibility bill'' offers forced 
choices and false promises. Instead of building on the success 
of State and local policies and leading private sector 
practices, it gives workers a pay cut without the guarantee of 
time off when they need it most.
    It sets up a false dichotomy between time and money, when 
people urgently need both. The FLSA allows both, and research 
shows that employers benefit from both.
    Let me briefly outline five key problems. First, 1180 
purports to require an agreement by an employee to accept comp 
time, but the employees I reference in my opening statement--
Suzanna, who is a clerical worker with three children and an 
elderly mother and an unpredictable schedule; Janice, a nurse, 
who has seen the value of her wages decline dramatically; and 
Allyson, who says that overtime pay means the difference 
between meatloaf for supper instead of rice and beans--these 
women could easily feel obligated to agree to comp time, even 
though money would be more valuable, because for them, they 
would fear that refusing comp time, even if it's supposed to be 
voluntary, could mean fewer hours, subpar shifts, and the loss 
of being offered overtime opportunities in the future. It would 
also mean for them greater scheduling instability, higher child 
care expenses, and lower wages in the short term.
    Second, this bill should be called the ``Employer 
Flexibility Act,'' because it makes it cheaper, again, in the 
short term, for employers to provide comp time than to pay 
overtime wages. They'll have every reason to hire fewer people, 
relying on them to work more hours, which means more time away 
from their families, with the promise of future comp time. And 
as you well know, you can't pay the rent or buy groceries with 
comp time.
    Third, it would provide an interest-free loan to employers 
by permitting them to defer payment for as long as 13 months.
    Fourth, it would give employers, not employees, the 
flexibility to decide when and even if comp time can be used or 
offered, and then to decide whether to cash it out, tossing 
employees well-constructed plans to use their accrued comp 
time.
    Finally and fifth, it offers no remedy to workers when 
employers deny a request to use comp time, except to ask that 
the time be cashed out. And even then, the employer need not 
provide those valuable wages for another 30 days.
    Experiences with comp time in the public sector illustrate 
these challenges all too clearly. There is a lot of case law on 
this. And let's not pretend that benevolence motivated that 
public sector use of comp time. It was a cost savings measure.
    We urge you to reject 1180. At a time when the Nation 
urgently needs workplaces that are more fair and family 
friendly, this bill is an empty promise, a cruel hoax, that 
would take the country in the wrong direction. Instead, working 
families need a suite of policies, and let me tell you about a 
few.
    First, the Healthy Families Act, which makes paid sick days 
available to millions of workers and builds on laws in 7 States 
and 32 localities. The FAMILY Act, which would create a 
national paid family and medical leave fund modeled on 
successful, responsible, and self-sustaining programs in 
California, Rhode Island, New Jersey, and soon New York and 
D.C.
    Expanded access to the FMLA, a gradual increase in the 
minimum wage to $15, and the elimination of the tipped minimum 
wage, the Paycheck Fairness Act to help close the gender-based 
wage gap, which by the way, in one year could pay for an entire 
course of community college for a woman or her child. The 
Schedules That Work Act, to encourage fairer and more 
predictable schedules.
    The Nation needs these advances. America's people across 
regional and political views support these advances, and 
businesses do, too, even smaller businesses. There's data on 
this.
    So, thank you for the opportunity to testify here today. I 
apologize for going over my time, but look forward to answering 
your questions.
    [The statement of Ms. Shabo follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Byrne. Thank you, Ms. Shabo. Mr. Court?

TESTIMONY OF LEONARD COURT, DIRECTOR, CROWE & DUNLEVY, OKLAHOMA 
   CITY, OKLAHOMA, ON BEHALF OF THE U.S. CHAMBER OF COMMERCE

    Mr. Court. Thank you, Mr. Chairman. I'm honored to appear 
before the Committee on behalf of the U.S. Chamber of Commerce 
to discuss H.R. 1180, the Working Families Flexibility Act of 
2017.
    As you know, the U.S. Chamber is the world's largest 
business federation. My firm, Crowe & Dunlevy, in Oklahoma 
City, is a long-time member of the Chamber, and I chair the 
Chamber's Wage, Hour, and Leave Subcommittee.
    I want to talk to you today about the act because it 
presents options for the employees. The bill would harmonize 
for private sector employees the same benefits that have been 
available for public sector employees, including some of your 
own staffs, since 1985.
    The bill has been carefully drafted to ensure that 
employees are given the choice of whether to participate in the 
program, how long they want to participate in the program, when 
they seek the option to cash out in the program, and to give 
them protections against the kind of hypothetical force or 
coercion that has been discussed earlier today.
    Prior witnesses from SHRM have talked to you about the 
benefits of the Act, and of course, this is not the first time 
this Act has been discussed before the Committee or this 
concept, so I want to talk to you about some of the arguments 
that are being advanced against the act.
    My paper has a more extensive discussion of these, so I 
want to limit my remarks to three or four specific points.
    First, opponents of the bill try to claim that it will 
undermine the protection for low-wage workers because employers 
will coerce employees into taking comp time, and we've already 
heard comments to that effect this morning.
    Let's be clear, the decision to participate in the program 
and the decision of whether or not to take this comp time is a 
voluntary decision based upon the employee's choice.
    In Section (e)(4) of the bill, there is protection that 
prohibits an employer from intimidating, threatening, or 
coercing an employee in terms of whether they participate in 
this program, and when they decide to voluntarily take its 
benefits.
    Second, a variation of that is that the bill will weaken 
protections for Americans by reducing the cost of overtime. 
Now, this argument in many respects assumes that this is not 
paid leave. In fact, not only will you have to pay as an 
employer the same costs that you would if you had paid the 
overtime during the pay period, which you could very well be 
paying more because the Act requires that when the overtime is 
cashed in, it is cashed in at the higher hourly rate.
    So, taking the hypothetical that was given earlier, if I 
get comp time in January at $7.25, but I get a pay raise in 
July to $9, my comp time, if I cash it out after that point in 
time or at the end of the year is going to be paid at the $9 
rate, not the $7.25. So, in fact, it could cost employers more, 
not less, under this program.
    Third, upon its claim that too much control is given to the 
employer in this regard, I think that ignores the clear wording 
of the bill.
    The use of comp time, the ability to cash it in, is 
dependent upon only two things. One, that the employee give 
reasonable notice to the employer, and two, that comp time 
that's going to be taken will not unduly disrupt the business 
operation.
    Now, this is not a hypothetical standard. We have this 
standard already for public employees. We have 20 years of case 
law showing that this standard is a difficult standard for the 
employer to prove in court and to beat.
    Fourth, there's the unfounded argument that the employer 
could refuse to hire individuals if they will not agree to comp 
time. The provisions of the bill simply do not allow that. They 
have the same protection as covers Federal employees in the use 
of flex time, and, in fact, to even be eligible, you must have 
worked 1,000 hours for that employer within the previous 12 
months.
    Last and certainly not least, opponents of the bill say 
that employers may force employees to cash out comp time 
against their will. The protections of the bill clearly do not 
allow that. The employer can require an individual to cash out 
only comp time over 80 hours, which is a better protection than 
is given to those in the public sector, and the employee, on 
the other hand, can request to cash out comp time only within a 
30-day notice.
    So, let me, if I quickly can, apply these rules to the 
hypothetical that's been given. A company has 200,000 covered 
employees who are opting into the program. That would seem to 
indicate they want to be in that program because it is their 
choice, not the employer's.
    Over the course of the year, not one of them chooses to 
take the cash instead of the comp time. Again, that would seem 
to indicate that they want the benefit that has been given. 
Last and certainly not least, it can, as I indicated to you, 
increase the cost to the employer because several of those 
200,000 employees would probably have been given pay raises 
during the course of that year.
    It is time to bring the private sector on a footing that is 
equal to the public sector, to harmonize the benefits. 
Therefore, on behalf of the U.S. Chamber and employers 
everywhere, we urge you to pass this bill. Thank you.
    [The statement of Mr. Court follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Byrne. Thank you, Mr. Court. Now, we get to the 
part of the hearing where we get to ask questions. I will call 
on myself for the first questions.
    Ms. Christ, you mentioned your experience working for the 
State of Alabama, where a comp time policy was in place. You 
also know that many of your employees work closely with police 
officers who are able to choose comp time instead of overtime 
pay.
    As an HR professional with a nonprofit community mental 
health center, do you believe your employees would benefit from 
the option of choosing comp time in the same way State and 
local government employees have benefited from the comp time 
option?
    Ms. Christ. Mr. Chairman, 100 percent, yes. I did work at 
the Department of Industrial Relations and, also, we do work 
closely with the Huntsville Police Department.
    The way we operate, 24 hours a day, 365 days a year, we do 
have opportunities or situations where crises occur, and our 
employees are there to do the job to help our community, so 
thereby, being able to choose an option to take time off later, 
if they happened to have had overtime that week, would benefit 
them, but they would have that choice.
    I believe that's why I'm a proponent, because I know our 
employees would like that choice.
    Chairman Byrne. Thank you. Mr. Court, under the bill, an 
employer would only be permitted to deny an employee's request 
to use accrued comp time if it would ``unduly disrupt'' the 
business operations. There are some who have suggested this 
would allow employers total control over scheduling when comp 
time can be taken. Could you elaborate on whether or not that 
is an accurate characterization of the bill's language?
    Mr. Court. Mr. Chairman, I believe that would be a very 
inaccurate characterization. We have over 20 years of legal 
precedent under cases in the public sector which use exactly 
that same standard. The burden of proof is on the employer. The 
courts have consistently held that financial cost alone is not 
enough to beat that standard.
    For instance, if I want to refuse your ability to take comp 
time because it's going to cost me more to bring in another 
person and pay them overtime, the courts have consistently held 
that does not meet the standard.
    So, there is a clear protection there for employees. It's a 
standard that's used and has been used for 20 years in the 
public sector. I have every reason to believe it can work in 
the private sector also.
    Chairman Byrne. Thank you. Ms. Frey, your written testimony 
discusses the role public policy can play in advancing the 
adoption of workplace flexibility. The bill we are discussing 
today is certainly one of those options, and I thank you for 
conveying SHRM's strong support for H.R. 1180.
    What other policies could, as you note in your written 
testimony, accommodate the increased diversity and complexity 
within the American workforce?
    Ms. Frey. Thank you, Chairman. Certainly, comp time would 
be a step in the right direction, but we believe that policies 
that would broaden the capability of employers to expand and 
encourage them to expand paid leave options, as well as 
workplace flexibility, would be something that we would want to 
dialogue on, and certainly something we would want to work with 
this subcommittee on. Thank you.
    Chairman Byrne. Ms. Shabo, I was listening to your 
testimony, and you alluded to the fact that the sort of 
benefits that are provided by Ms. Christ's company and Ms. 
Frey's company are not necessarily available to everybody, so 
you may have employees in different situations.
    Does this bill not provide the sort of flexibility that 
would allow them to do what they want to do, at the same time, 
not coercing others to do it if they do not want to do it?
    Ms. Shabo. Well, I think the FLSA currently provides this 
flexibility, if you want to call it that, which is that they 
are currently obligated to provide their employees with 
overtime pay for overtime hours worked. Those employees can 
save that money. They can invest it on their own. They can earn 
interest. Ms. Christ's son can put that money in the bank and 
start to watch returns on his money as well.
    Chairman Byrne. But they cannot get comp time.
    Ms. Shabo. There is nothing preventing these employers from 
saying you worked 20 extra hours last week, why don't you take 
20 hours this week or take 10 hours? Take the time you need 
this week to deal with your family situation, we're not going 
to penalize you for not showing up for work tomorrow. There's 
nothing that prevents that.
    Chairman Byrne. Let me ask Mr. Court to respond to that.
    Mr. Court. I think the example that's being used is one 
that is allowed only in the same pay period, so if I work the 
extra 20 hours a week in the first week of April, and my 
granddaughter, who happens to be a pretty good tennis player, 
has a tournament at the end of April, I'm not going to get that 
20 hours a week off at the end of April.
    So, the flexibility that's talked about under the current 
FLSA is very limited to two week periods of time. The 
flexibility under this bill is much different and much more 
beneficial.
    Chairman Byrne. Thank you. Mr. Takano?
    Mr. Takano. Thank you, Mr. Chairman. Ms. Shabo, do you care 
to respond to that, what he just said?
    Ms. Shabo. Yeah, I mean, there is nothing that would 
prevent the employee from going to their employer in that 
situation and saying, hey, my daughter has a tennis tournament 
at the end of April, you know, thank you for offering me this 
time off next week, but actually, would you mind if I just 
waited until the end of the month and took the time then? An 
employer that wants to make their employees happy, wants to 
make sure their employees' morale is good, will say yes.
    Mr. Takano. Thank you. Because of the overtime salary 
threshold where workers are automatically eligible for overtime 
pay has not been updated in a very, very long time, today, it 
is possible for employers to demand very long hours for many of 
their employees, without paying them a cent for hours worked 
beyond 40 hours a week.
    H.R. 1180 gives employers yet another tool to deny workers 
overtime pay, at the very moment their overtime rights ought to 
be strengthened.
    Ms. Shabo, would you tell this Committee about the extent 
to which the number of employees covered by overtime rules has 
fallen since the 1970s as a result of the failure to update the 
threshold?
    Ms. Shabo. Yes, absolutely. I think you're talking about 
the salary rule for overtime.
    Mr. Takano. Yes.
    Ms. Shabo. So, back in the 1970s, 1975, about 60 percent of 
the workforce that were covered under the salary threshold for 
being able to earn overtime pay. We're down to 8 percent. 
Unfortunately, the rule that would have increased the salary 
threshold to $47,000 is held up in court, but that is something 
that we very much want to see increased.
    It would cover the new rule, if the Obama administration 
rule were put into effect, it would cover around 12.5 million 
more workers, more of half of whom are women, many of whom are 
parents.
    Mr. Takano. In 1979, nearly 12 million salaried workers had 
overtime protections, but today, with a 50 percent larger 
workforce, only 3.5 million salaried workers are automatically 
protected. That is a real decline. That is just stunning to 
learn that.
    I have a report here from the Economic Policy Institute 
that highlights the false choice between flexibility and 
overtime. I ask unanimous consent to enter it into the record.
    Chairman Byrne. Without objection.
    Mr. Takano. Ms. Shabo, by making overtime cheaper, wouldn't 
H.R. 1180 incentivize employers to assign mandatory overtime 
rather than letting employees go home to their families?
    Ms. Shabo. I'm afraid that it would. I mean, say you have 
six employees that are all cashiers, some of them choose to 
accept comp time, some of them want their overtime pay because 
they need to pay bills.
    The implicit incentive for that employer is to award the 
overtime hours to the workers that are planning to use comp 
time, which means they're getting more labor from those folks. 
It also means less hours for those other workers who very much 
are relying on their overtime pay to make ends meet.
    Mr. Takano. For people with family commitments, being 
forced to stay late at work can mean children do not get picked 
up from a child care center or met at the bus stop. Would you 
tell us about the extent to which workers are already being 
forced to work mandatory overtime and its impact on their 
lives?
    Ms. Shabo. Yes. So, there's some really great research 
based on national survey data that anybody can get access to, 
that asks about required overtime. More than a quarter of 
workers that are forced to work overtime now or asked to work 
overtime are being forced to work overtime by their employers.
    That's a lot of people who don't have any say over their 
schedules, who aren't able to meet those obligations, and in an 
economy that is still needing to produce more jobs and better 
quality jobs, the incentive to offer overtime and to take 
overtime is pretty great for folks.
    The other thing, just to link to your prior question, 
there's also research showing that folks that are just above 
that $23,000 salary threshold are more likely to be asked to 
work overtime. They are also less likely to have control over 
starting and working hours or other sort of pieces of 
flexibility that allows them to make their lives work and to 
have control.
    Mr. Takano. So, is this legislation likely to make this 
problem worse?
    Ms. Shabo. Yes, I absolutely believe that for many, many, 
many workers, the Working Families Flexibility Act would make 
lives worse. It would give them less control, less wages, and a 
lot more uncertainty.
    Mr. Takano. So, really, what we are talking about here is 
less choices for workers and more leverage for the employers, 
more convenience for the employers. As I said in my opening 
statement, I do not believe there is anything that is 
convenient or as fungible as cash. We are taking that 
fungibility, that convenience, away from employees.
    So, thank you for your testimony. I appreciate it. I yield 
back.
    Chairman Byrne. The chair now calls on the distinguished 
Ranking Member of the Committee, the gentleman from Virginia, 
Mr. Scott.
    Mr. Scott. Thank you, Mr. Chairman. Mr. Chairman, this bill 
really purports to provide flexibility for workers, but in 
reality, the only real flexibility is for employers. It 
provides employers with flexibility to avoid paying time-and-a-
half overtime that the Fair Labor Standards Act requires. By 
making overtime hours cheaper, H.R. 1180 would create a 
perverse incentive for employers to encourage their employees 
to work excessive hours.
    Let me ask Ms. Shabo a couple of questions. Is there any 
prohibition against an employer choosing employees for overtime 
that would accept comp time rather than overtime?
    Ms. Shabo. No, sir.
    Mr. Scott. You had talked about kind of the real choice, 
and if you do not change the law, there is nothing in present 
law to prevent someone from working overtime, getting paid 
time-and-a-half, and then subsequently just taking those hours 
off with an agreement with the employer.
    How would that work, and is that different from present 
law?
    Ms. Shabo. Well, under current law, an employee could work 
overtime, say there is a factory that needs to meet a demand, 
they're a subcontractor, and they need to meet a demand. I know 
in Alabama, there are a lot of car manufacturers that have car 
suppliers, and they have their employees working 12-hour shifts 
for seven days to meet demand.
    Those employees would be paid for their time, and if the 
employer wants to make sure their employees are having the time 
they need with their families, there's nothing preventing them 
in current law from giving those employees time off, whether 
that's paid or unpaid time off. There's nothing that prevents 
them under current law from allowing their employees to shift 
their start or end times or to work a split shift, or to work 
four 10-hour days instead of eight 5-hour days. Nothing at all. 
The current law already provides that flexibility.
    Mr. Scott. If they took time off, say they worked four 
hours, got time-and-a-half, got six hours, then a few weeks 
later, took six hours off, they would lose pay for those six 
hours, and essentially, they would be right back where the bill 
would put you.
    Ms. Shabo. Right.
    Mr. Scott. That would be really a choice of the employee, 
not of the employer. Is that right?
    Ms. Shabo. Yes.
    Mr. Scott. A suggestion was made that when the employee 
selects the time for the comp time, and it is unreasonably 
delayed, that all they have to do is file a lawsuit. Can you 
say a word about how practical that is as a remedy?
    Ms. Shabo. Sure. We already know a couple of things. One, 
filing litigation is a pretty onerous task, particularly for a 
worker who doesn't have a lot of leverage in their workplace, 
who doesn't have any protections against being fired other than 
antiretaliation language that exists in current law. Pursuing a 
lawsuit for something like this is very difficult.
    We already know there are vast Wage and Hour Division 
violations, wage and hour law violations. DOL is pursuing 
those. I'm very worried that under the President's budget, DOL 
is seeing a 21 percent decrease in their budget if the 
President's budget is approved. There are no administrative 
remedies in this bill.
    There are very few worker protections, and I worry in that 
situation that you've just described that workers will really 
be left on their own without much power and without the ability 
to recover the wages that they are owed.
    Mr. Scott. After an employer says no, the attorney fees for 
the lawsuit would probably exceed whatever you would get. Is 
that right?
    Ms. Shabo. Yes, I would imagine so. A good illustration of 
this is say that a woman works several extra hours, earns 
overtime pay, and she has banked it as comp time under this 
proposal. Her mother then needs surgery, and she asks her 
employer to use her banked comp time so that she can be there 
with her mother at surgery.
    Now, the case law from the public sector would say in some 
cases you don't actually get to take your time on the day you 
want it if it will disrupt the employer's operations. The 
employer just needs to give you that time within a reasonable 
period.
    So, say you want your day on Tuesday, so you can be with 
your mother, but your employer says Tuesday is really not a 
good day, we have a big demand, and I'm not going to be able to 
fill that. Why don't you take Thursday instead? That leaves the 
person both with the inability to be there with her mother, but 
also without the ability to get those wages to pay a caregiver 
to be there with her mother at that time.
    In that case, she has really nothing of value at the moment 
that she needs it, whereas, something like the Healthy Families 
Act would provide an earned paid sick day at that same time.
    Mr. Scott. Thank you. Mr. Chairman, I ask unanimous consent 
that a letter from AFSCME be entered into the record in 
opposition to the bill.
    Chairman Byrne. Without objection, so ordered.
    The chair now recognizes the distinguished Chairwoman of 
the full Committee, the gentlewoman from North Carolina, Dr. 
Foxx.
    Mrs. Foxx. Thank you very much, Mr. Chairman. Ms. Frey, 
Continental Realty Corporation seems to be doing all the right 
things when it comes to implementing workplace flexibility 
practices, contrary to what some of my Democrat colleagues 
claim by and large. I think most employers do the right thing 
by employees.
    You were pretty clear about the need for policies to 
encourage or allow employers to offer voluntary options, and 
that includes having a voluntary approach to comp time. Can you 
elaborate on why it is so important for policymakers to avoid 
crafting one-size-fits-all requirements for employers with 
respect to flexible work options?
    Ms. Frey. Thank you. Yes, ma'am. So, with the one-size-
fits-all mandate, unfortunately, all employers and all 
workplaces are not the same. I can draw from my own experience 
as to competition for top talent, especially here in the metro 
D.C. area, and really having the flexibility to be able to 
maintain, retain, and keep our top talent is extremely 
important to us.
    It's far less disruptive to provide something like that 
rather than to lose some of the people that we consider high 
performers, that we need to keep and retain and develop. Thank 
you.
    Mrs. Foxx. Thank you. Ms. Christ, you described several 
flexible arrangements for workers at WellStone. How would 
offering the comp time option enhance your ability to provide 
employees the personalized work options many of them are 
seeking, and would comp time fit well with the other flexible 
work arrangements you offer?
    Ms. Christ. Thank you very much. Yes, having comp time 
would actually be another asset for our employees. We do 
compressed work weeks. We have flexible schedules, but also in 
our group homes, our employees can work with other employees to 
swap shifts.
    That still doesn't take into effect if they want leave 
three months from now to take a family vacation, although we do 
provide generous leave policies, if they don't have enough 
leave to cover it, they're going to be on leave without pay. 
We're going to allow them to be off, but if they chose to save 
their comp time or their overtime and just convert it to comp 
time, that would be their choice.
    So, I think that's why I advocate for our employees because 
although we do offer generous leave and flexible schedules, 
this is just another addendum or another option for them.
    Mrs. Foxx. By the way, I want to thank all of you for being 
here today. Mr. Court, I think the arguments you have made for 
this legislation are excellent. Do you know any reason why 
private sector workers should not have the same opportunities 
and choices in workplaces afforded to public sector workers?
    Mr. Court. I do not.
    Mrs. Foxx. Thank you. Mr. Chairman, I would just make one 
quick comment. I do not understand why it is better for people 
who work in the public sector to have this option and other 
people not to have it. We often get accused of the laws not 
applying to us that apply to everybody else.
    I think it is time that we outlined the benefits that 
public service employees get that the private sector is not 
allowed to have. I just do not think most of the public 
understands this, as Ms. Christ outlined in her comments. She 
has to explain to the employees there that public sector people 
can get this, but private sector people cannot because of 
Federal legislation.
    It just does not make any sense. Thank you, Mr. Chairman. I 
yield back.
    Chairman Byrne. Thank you, Dr. Foxx. The chair now 
recognizes the gentleman from New Jersey, Mr. Norcross.
    Mr. Norcross. Thank you, Chairman, appreciate it. To our 
distinguished Chairwoman, I believe most employers try to do 
what is right. I do not think there is any real distinction on 
that, but obviously, there are employers that do not.
    What we are trying to look at here is a win for both 
employers and employees. A happy employee makes for a better 
workplace, generally more profitable and more productive.
    So, following that, when I first started my career, I was a 
single dad. In this case of comp time, if I worked the first 
eight to 10 weeks in the year an extra five or 10 hours a day, 
that is great, I would build up this comp time if I wanted 
that. The difference is if I wanted it in my paycheck, I would 
not have any choice in that under this bill that we are looking 
at today.
    Correct, Ms. Christ? You would not have the choice whether 
you want comp time or overtime, correct? The employee.
    Ms. Christ. With H.R. 1180, if you went into a written 
agreement with your employer saying I would prefer the comp 
time instead of overtime, you would have that choice.
    Mr. Norcross. No, let me be very specific here. The 
employee does not have that choice unless they sign off on it. 
You, as the employer, could make that employee take comp time 
versus overtime, correct?
    Ms. Christ. We would make them take the overtime? If that 
employee did not choose comp time, if we offered it--
    Mr. Norcross. That is what you do. Under the law, if this 
bill were to pass, you would have the ability to impose comp 
time, correct?
    Ms. Christ. No.
    Mr. Norcross. That is not correct?
    Ms. Christ. That is not correct, sir.
    Mr. Norcross. Okay, then maybe I got some different 
information.
    Ms. Shabo. I am happy to jump in. The plain language of the 
statute, of the bill, says there has to be a written agreement 
between an employer and an employee for the employee to accept 
and for the employer to provide comp time in lieu of overtime 
pay.
    I don't know what job you had at the time, perhaps you had 
leverage, perhaps you were a unique employee and your employer 
wanted to make you happy, and they would give you whichever of 
those two you wanted.
    I think the concern is that where there are hourly workers, 
where there are workers who are really for all purposes 
interchangeable in terms of their ability to do the job, the 
preference that an employer would have, whether knowingly or 
implicitly, would be to give the employees who would bank comp 
time the overtime hours rather than giving the overtime pay in 
the current period to the employees that wanted the overtime 
pay.
    Mr. Norcross. So, compare what we are talking about today 
to the existing law for public employees, and give me some of 
the differences.
    Ms. Shabo. The public employees--in 1985, the Supreme Court 
ruled in the Garcia case that the Fair Labor Standards Act 
applied to public employees, and States and localities were 
employers for the purposes of the Fair Labor Standards Act. 
That was counter to a lot of the ways that public employers had 
been operating, and they had been providing comp time already.
    They were very, very worried. The National Association of 
Counties and the League of Cities were really worried that this 
was going to create very tight budgets, especially as their 
emergency workers were working overtime hours.
    So, Congress and President Reagan crafted an exception for 
public employees, so they would be able to receive comp time in 
lieu of overtime pay, which had been the practice up to that 
point.
    But there are very real differences between public 
employers and private employers. There's a profit motive in the 
private sector that doesn't exist in the public sector. There 
are often due process protections for public sector employees, 
whether outright or through collective bargaining agreements. 
There is less likelihood, not so much anymore, but less 
likelihood that employers will go bankrupt or go out of 
business leaving their employees holding the bag for unpaid 
comp time, which can influence their ability to receive 
unemployment insurance.
    There are a lot of differences that make these two 
situations quite in opposite to each other.
    Mr. Norcross. Under this provision, you would not have to 
pay, if they chose to not take the comp time but take the 
overtime, you would not have to pay that until the following 
year, is that correct? By the end of January the following 
year?
    Ms. Shabo. It would depend on if the employee wanted to use 
their comp time and the employer agreed they could use their 
comp time, they would receive the comp time and it would be 
paid when they used the comp time.
    For employees that has banked their comp time, the bill 
would allow the employer to hold on to the value of that banked 
comp time until January 31 of the next year.
    Mr. Norcross. So, that income would be deferred to the next 
year, is that correct?
    Ms. Shabo. It would be an interest-free loan to employers 
until the next year.
    Mr. Norcross. It would be on next year's income, not on the 
year they earned it?
    Ms. Shabo. Correct.
    Mr. Norcross. So, they get to defer that. Thank you. I 
yield back my time.
    Chairman Byrne. Thank you. The chair now recognizes the 
distinguished Mr. Ferguson from Georgia. Mr. Ferguson is one of 
our new members. We welcome you and recognize you for 
questions.
    Mr. Ferguson. Thank you, Mr. Byrne, and thanks to each of 
you for taking time to be here. It is interesting to listen to 
the banter back and forth. There seems to be many times an 
assumption that employers are the bad guys and they are going 
to purposely try to box their employees out or do harm to their 
employees.
    One of the things I would like, Ms. Christ and Ms. Frey, if 
you would speak to, as a small business owner myself, I tried 
to provide as many flexible options as I could to my employees. 
It is something that they wanted.
    We are entering a period of economic growth right now. We 
are going to have a real challenge with skilled employees and 
recruiting those skilled employees. Tell us how this would help 
you in recruitment of employees in the 21st century economy, 
and how your employees would want this as an option.
    Ms. Christ. We have workers that deal with mental illness, 
of course, 24/7, strong behaviors, and they're highly trained. 
We train them, but we want to keep them. So, in order to keep 
them, to reduce turnover, we have to be flexible and offer 
creative solutions to them in order to help that work/life 
balance.
    So, being a nonprofit, our pay scales aren't high, but our 
benefits and flexibility to promote our workforce culture of 
caring is foremost, so this bill would definitely help in our 
cause for recruitment and retention.
    Ms. Frey. Thank you for asking that question. I think it's 
an excellent question. My organization's interest in something 
like this would be to provide flexibility. We're already 
providing a number of paid leave benefits, but the truth of the 
matter is that employees ask for this flexibility.
    I can share any number of stories about employees who come 
to us either wanting a transitional schedule after returning 
from maternity leave or wanting a compressed schedule, or 
wanting an adjusted schedule so they can return to school. We 
really try to balance the employer's needs and the employee 
needs, and work on effective solutions together. I find that 
when we come together and provide those creative solutions 
together, we have a very committed workforce, we have great 
morale, and these individuals turn out being very high 
performers.
    So, I can give you any number of instances where we've made 
accommodations like that, and that person has turned around, 
and in my opinion, really awarded us tenfold by just being such 
a great employee and a motivated employee.
    Mr. Ferguson. I agree with both of you that if you can 
create flexibility in the workplace and give your employees 
options, they are going to be much more productive, much more 
loyal.
    One of the things I took great pride in as an employer was 
having the environment where the average tenure of an employee 
with me was well over 10 years. That is something that is 
important, and over and over again, what we found is many times 
employees wanted time away from the office to take care of 
their personal needs, their family, whatever it may have been, 
and we found that we were more productive because employees 
knew they had the flexibility to take the time when they needed 
it.
    So, I think most really good businesses really kind of view 
employees as their greatest asset, and we have to be innovative 
in this Nation, in this 21st century economy.
    I think we have to stay away from the view that business is 
there to punish or to hurt employees. We want our employees 
happy. We want them productive. It is one of the greatest 
things we can do as employers is to make sure that we have a 
healthy, happy, functioning workforce that operates at a high 
level.
    So, Mr. Chairman, I yield back. Thank you.
    Chairman Byrne. Thank you, Mr. Ferguson. The chair now 
recognizes the gentlewoman from New Hampshire, Ms. Shea-Porter.
    Ms. Shea-Porter. Thank you, and thank you all for being 
here. It is a very interesting discussion for me because I was 
raised by parents who each had small businesses. I was an 
essential part of their labor force, and protected, as the 
family. We grew things together. So, I do understand what it is 
like when somebody does not show up, the stresses and strains 
on small businesses.
    However, I also worked in a number of jobs that were not 
glamorous when I was going through school, including factories 
and restaurants, and as a chambermaid. And yeah I was exploited 
there. I had some great employers and I had some that were just 
awful and I felt like there were no protections.
    I think what we are talking about is a country that has 
mixed businesses and attitudes towards the employer and 
attitudes toward the employees. I believe our goal here is to 
try to protect everybody here.
    I just have a couple of yes or no questions that I would 
like answered by each one of you, please, and just yes or no. 
Employees cannot count on using time when they actually need 
it, so employees cannot necessarily save up for, say, a birth 
or a surgery. Yes?
    Ms. Christ. No, ma'am.
    Ms. Shea-Porter. You believe under this bill they can count 
on using that time, guaranteed the time they need, the date 
they need?
    Ms. Christ. Yes, ma'am. For my organization--
    Ms. Shea-Porter. No, I am talking about under this bill.
    Ms. Christ. In this bill, yes, ma'am, unless it unduly 
disrupts business operations.
    Ms. Shea-Porter. See, that is an important part, because 
babies always disrupt. They arrive at a certain time. So, I 
just wanted to get that from you, each one of you, please.
    Ms. Frey. I would agree, I believe employees can use the 
time when they need it.
    Ms. Shea-Porter. Okay. That is not how the bill is written.
    Ms. Shabo. No, they can't use the time when they need it as 
an absolute guarantee under this bill.
    Ms. Shea-Porter. Right. Mr. Court?
    Mr. Court. Yes, they can, subject to the unduly restrictive 
test.
    Ms. Shea-Porter. It is that ``subject'' part that is really 
always difficult, is it not? What happens is, I know from the 
small businesses, there is never a good time for anybody not to 
show up. I get that. The reality is they cannot be certain they 
are going to get it.
    Second question. An employer can cash out. So, if the 
employee was saving it for a birth or a vacation or school 
break or whatever, they could lose it, right? Because the 
employer can decide after 80 hours to say, I am not going to do 
the comp time.
    Ms. Christ. Yes, with notice to the employee.
    Ms. Shea-Porter. The point is if I am saving for say a 
birth, then the notice is not going to change my circumstances. 
Yes? No?
    Ms. Frey. Yes, with notice, we would receive the 
compensation at time-and-a-half.
    Ms. Shea-Porter. Okay. Again, I am saving for the birth of 
a baby, and the employer can come to me and say, sorry, you are 
not going to get paid because it is not good for the business 
at this time. It may be legitimate in terms of the business 
schedule, but I am just talking about there are no ironclad 
guarantees. Ms. Shabo?
    Ms. Shabo. There are no guarantees.
    Ms. Shea-Porter. Mr. Court?
    Mr. Court. The employer can cash out in excess of 80 hours, 
you would still have the 80 hours' comp time pay.
    Ms. Shea-Porter. My understanding is they can cash out, an 
employer can then say, I have decided not to do the comp time. 
I have checked this, but Ms. Shabo, is that your understanding 
as well?
    Ms. Shabo. That's my understanding.
    Ms. Shea-Porter. That is mine. I have checked it. So, how 
about a compromise? If they held the money, if the company held 
the money for 80 hours, say, and then decided to cash out, 
right, for the employee, because that could extend over many 
months, then would anybody be willing to pay interest on the 
money they held that belonged to the employee, if the employer 
was the one who changed the deal?
    If the employer says after 80 hours, I am not going to give 
you comp time, I have decided I would rather cash out, do you 
think it would be fair to pay the employee interest for the 
money that they held during that time? It is holding hours.
    Ms. Frey. I think that is something that I would need to 
study in more detail.
    Ms. Shea-Porter. We want to be fair here. The other
    part is could we say to a company that you have to 
guarantee at least 75 percent of the request you honor in terms 
of the scheduling. In other words, they cannot have a 100 
percent record of saying, no, that is inconvenient, and we 
could just maybe set a time that the company has to honor 75 
percent of the request, understanding that 25 percent, you have 
to be flexible for a business, just so we know they are 
adhering to the spirit of the rule, as well as the actual rule.
    Would that go well with everybody here?
    Chairman Byrne. Mr. Court, do you have an answer? If you 
could give it very quickly because we are getting out of time 
here.
    Mr. Court. I'm not in favor of a hard percentage limit. I 
think the unduly burdensome test and the 20 years of history 
that we have in the public sector says that works well enough 
right now.
    Ms. Shea-Porter. You would be okay if they did set a test 
to make sure that companies were adhering most of the time to 
the requests for comp time?
    Chairman Byrne. The gentlewoman's time has expired. I am 
going to allow the witness to answer very quickly.
    Ms. Shea-Porter. Thank you.
    Mr. Court. No, that's not what I meant to imply. I think 
the current test in the bill is good enough.
    Ms. Shea-Porter. All right. Thank you. I yield back.
    Chairman Byrne. The gentlewoman's time has expired. The 
gentlewoman from New York, Ms. Stefanik, is recognized.
    Ms. Stefanik. Thank you, Mr. Chairman. Ms. Christ, I 
noticed in your testimony that a majority of WellStone's 
employees are women and many are younger workers. Based on your 
experience with that workforce, how important are flexible work 
arrangements to employees, and do younger workers have 
different priorities than older workers?
    Ms. Christ. Thank you for your question. Our workforce with 
women as the majority, it's very essential that they have time 
off, especially because many of our employees are single 
parents. So, they take care of not only maybe their own 
children, but also their other family members, maybe parents, 
elderly parents, or extended family. So, it would be important.
    Our younger workers, they have many times different needs, 
but one of the things I've noticed with our workers, they like 
the flexibility. They want it in their hands. They don't want 
to be in a box and contained to an 8:00 to 5:00. So, it's nice 
to be flexible and give them the choice.
    Ms. Stefanik. Thank you. I think it is important to note 
that with technology and iPhones, we are in a 21st century 
workforce. You talked about the demographics at WellStone. I 
think that is representative of much of the change in 
demographics, there are 14 million single parents in the 
workplace, and 85 percent of workers value workplace 
flexibility when considering a new job.
    This is a good thing, providing more balance and 
flexibility, so thank you for your answers, and I would like to 
yield the balance of my time to the chairman.
    Chairman Byrne. Thank you, Ms. Stefanik. Mr. Court, let me 
ask you a follow-up question. What is the remedy that an 
employee has against an employer if he or she is not 
compensated for accrued comp time, and is that different from 
the remedy which he or she would have when an employee has a 
claim for unpaid wages?
    Mr. Court. Mr. Chairman, it is the same remedy under the 
Fair Labor Standards Act. You not only get the value of what 
you have lost, but twice that much, liquidated damages, if it 
is considered to be willful.
    To address Representative Scott's concern concerning 
attorney fees eating up that award, if the company loses, they 
pay the attorney fees for the employee under the Fair Labor 
Standards Act. In addition, since this is a bill that falls 
under the jurisdiction of the Department of Labor, you may not 
have to bring a lawsuit. You may be able to file a charge with 
the Department of Labor, who can investigate as they do other 
wage and hour claims, and that doesn't cost you a dime.
    Chairman Byrne. Back to you, Mr. Court. The opponents of 
this bill suggested, in previous debates at least, that the 
bill would encourage employers to demand excessive hours by 
making overtime less expensive, thus undermining the 40-hour 
work week protections against excessive hours.
    Will this bill reduce overtime costs for employers? In 
other words, does comp time allow an employer to avoid paying 
overtime premiums?
    Mr. Court. The comp time certainly does not allow the 
employer to avoid paying the overtime premiums, as I said in 
response to an earlier question. It, in fact, could increase 
the cost if the individual receives a pay raise over the course 
of the year after they have already banked the comp time.
    Chairman Byrne. One of the things that I am hearing is 
there is some incentive in this bill for employers to 
essentially game the system and take advantage of employees, to 
rob them of either their pay or their accrued comp time.
    Is that possible under the bill, that an employer could do 
that, and would there not be some remedy by the employee 
against that?
    Mr. Court. No, Mr. Chairman, it is not. The bill very 
specifically has remedies, has prohibitions against coercion, 
threatening employees, so the employee is going to get the 
benefit of the paycheck if they want it because they're not 
forced to enter the program, or if they want to bank the comp 
time, then they have the guarantee of the ability to use it, 
unlike the example that Ms. Shabo was giving, where you are 
depending upon the employer to agree to let you have time off. 
This is a right you would have under the statute.
    Chairman Byrne. As one lawyer to another, I have not had to 
defend these before, but if you get one of these things either 
from an employee or Department of Labor, it is no fun. There is 
every incentive in the world to avoid having anything close to 
this. Would you agree with that?
    Mr. Court. Absolutely.
    Chairman Byrne. Thank you. The chair now recognizes the 
gentleman from California, Mr. DeSaulnier.
    Mr. DeSaulnier. Thank you, Mr. Chairman. I do want to 
follow up with a couple of comments. Having spent 35 years as 
an owner and manager of restaurants, that most employers want 
to do the right thing, but the framework for doing the right 
thing is part of what we are talking about here.
    It sounds as if from all of the employer representative 
witnesses that this is a zero-sum game from your viewpoint for 
the employees. Is that the way you look at it? If they take the 
comp time, it is a zero-sum game for them?
    Ms. Christ. If they choose the comp time, they're still 
going to get that time-and-a-half, which is really paid leave 
or paid time off, the same as if they chose to get the 
overtime, sir.
    Mr. DeSaulnier. Okay. Is that the way you view it, Ms. 
Frey?
    Ms. Frey. I would agree with Ms. Christ. I think it's a 
choice on the part of the employee, and it's a choice they can 
make and they can elect by agreement, and they can also opt out 
of the agreement at any time.
    Mr. DeSaulnier. Mr. Court?
    Mr. Court. Yes, I would agree with the two previous 
witnesses' answers, plus I think our experience in the public 
sector where we have had this for a long time would tend to 
indicate that.
    Mr. DeSaulnier. Ms. Shabo, I want to go to you, because 
some of the confusion that I am still trying to figure out with 
your response and Ms. Christ's response is that they take the 
comp time, but they do not get paid for some indeterminate 
period of time.
    In California, you are required or it used to be, you had 
five working days to pay your employees, including their time-
and-a-half. So, if my employees decided to do comp time, when 
do they get compensated for that time-and-a-half? Is it five 
days after the work period, in their paycheck, or is it a year 
from then?
    Ms. Shabo. So, they would take the comp time when their 
employer allows them, when they request it and their employer 
allows them to take it. If they want to cash out for the value 
of their comp time, it would be within 30 days of their 
request, or if they don't make a request, and it is still on 
the employer's books, the 31st of January of the next year.
    Mr. DeSaulnier. So, it is not a zero-sum game to the 
employee?
    Ms. Shabo. No, the value of the employee's wages is sitting 
with the employer for some period of time until they take the 
time. I think the other thing that's missing in this 
conversation, if I could just interject, is we're talking about 
a very small segment of the workforce that is actually working 
more than 40 hours a week to be able to even get the value of 
this time.
    Often, we are looking at people who have too few hours, and 
also don't have any paid leave, so I don't think it's 
reasonable to think about these two proposals, the Working 
Families Flexibility Act or something like the Healthy Families 
Act, which provides paid sick days, which you have in 
California and in Oregon, or paid family leave, which you have 
in California and in several other States.
    Those are things that are guaranteed for people who need 
the time no matter how many hours they're working or who they 
are working for. Whereas, this bill really only applies to a 
narrow slice of folks, and only to those employees lucky enough 
to work for fair employers, like it sounds like you all are, 
who will administer this new comp time benefit fairly.
    Mr. DeSaulnier. So, in California, we have those benefits, 
as you say, provided by law, but we also protect the eight hour 
workday in addition to the 40-hour work week. We had many 
hearings when I was in the legislature about changing the 
flexible work permits.
    Employers can easily do that by a majority vote of their 
employees. I think the threshold is like five employees, so it 
captures most of the workforce. We want that in California 
because of the social model, the pressures on families, long 
commutes, but we want to make sure the base level is paid, and 
it is a zero-sum game.
    So, I think when we talk about innovation, we have to sort 
of look at it both ways. I always struggle with this, and the 
Chairman has heard me before, coming from a high cost of doing 
business area, as a business person, you want to lift all 
boats.
    So, while I agree we should have flexibility, it sometimes 
drove me crazy as a restaurant owner in California that I had 
to pay time-and-a-half for split shifts, which required my 
employees sometimes to drive a long time back and forth, but it 
was fine with me as long as all my competitors had to do the 
same thing.
    So, I struggle with the hollowing out of the American 
middle class, not to blame this law for that, but as a 
potential contributor to that, that if it is going to be 
innovative, and it is zero-sum. It really is zero-sum.
    The last point, the enforcement mechanism. I am one who 
believes that a private right of action is not the most 
effective. As the Chairman said, nobody likes a visit from 
regulators. However, it can be much more efficient.
    Ms. Shabo, can you talk about that a little bit, both from 
the employer and employee standpoint, about the mechanism to 
enforce this small percentage of people who actually would 
choose this?
    Ms. Shabo. Sure. I mean, the law provides private right of 
action, as you said. I don't read it as providing a 
particularly good administrative remedy for folks here, if any 
administrative remedy at all.
    You know, I think it's important to look at wage-and-hour 
violations, which have increased to the tune of millions of 
dollars, including in the districts of folks who are sitting 
here today.
    I don't think we want to increase litigation here, but what 
we are potentially setting up through this so-called ``Working 
Families Flexibility Act'' is actually increasing uncertainty 
about what employees must have, what employers must do, and the 
real potential for a lot more disputes about what money is owed 
to whom and when.
    Mr. DeSaulnier. Thank you. Thank you, Mr. Chairman.
    Chairman Byrne. Thank you. The chair now recognizes the 
gentlewoman from Oregon, Ms. Bonamici.
    Ms. Bonamici. Thank you very much, Mr. Chairman. I thank 
you for allowing me to join your subcommittee. I really 
appreciate the conversation.
    Ms. Shabo, there has been a suggestion that this bill, H.R. 
1180, is needed so employers can provide flexibility, but is 
there anything in the Fair Labor Standards Act right now that 
prevents employers from providing flexibility now to, for 
example, paid or unpaid leave, or flexible predicable 
schedules, without giving up their right to overtime pay?
    Ms. Shabo. No, there's not.
    Ms. Bonamici. Thank you. I agree with my colleague from 
California, there are a lot of people now who are facing a 
great deal of economic insecurity and anxiety. There are people 
who are worried about whether they can pay their rent or find 
housing, healthcare costs, balancing family responsibilities, 
saving for retirement, saving for kids to go to college, the 
whole long list.
    People are concerned that maybe their kids will not have 
the opportunities they had, and we are seeing that across the 
country, people working longer hours, sometimes more than one 
job. Our workforce also looks drastically different than it 
did, say, 50 years ago.
    The Democrats have put forth a working families agenda: 
several pieces of legislation that would keep workers in the 
workforce, provide scheduling flexibility, which there is a lot 
of technology that helps with that, as we know, to allow 
workers to care for themselves and their families, and raise 
stagnant wages.
    As you mentioned, the Oregon legislature recently not only 
passed paid sick day policy, but also increased the minimum 
wage. We have a tiered system, it depends on urban areas, rural 
areas. They are currently also debating legislation to create 
paid family leave, like the rest of the world provides.
    Can you talk about how these types of workplace policies 
affect workforce participation and our country's economic 
prosperity, and how would this bill, H.R. 1180, affect our sort 
of larger goal of preparing the workforce to meet the 21st 
century economy?
    I do want to mention, because Ms. Shea-Porter mentioned and 
others have mentioned, small businesses. I met with many small 
businesses in Oregon who are providing these policies, and they 
are finding that not only do they have a happier, healthier 
workforce, they also have less challenge with recruitment and 
great retention, because they found that if they provide these 
policies to their workforce, they stay, they are happier, and 
these are small businesses. People are concerned that this does 
not work with small businesses, but we have many examples to 
show that it does.
    Ms. Shabo. That's right, and thank you for your question. 
Actually, one of the arguments that's often used is some of 
what's come up here, which is that it should be up to employers 
to decide what they want to do because it makes for better 
recruitment and retention, and it gives them a leg up.
    What we actually find when we look at the data is small 
businesses--a study commissioned by Small Business Majority 
that was released just last week shows that 70 percent of 
businesses nationwide, which is based on a scientific sample of 
small businesses, support the Family Act, which would create a 
national paid family and medical leave standard.
    Seventy percent, and most of that sample was not Democrats, 
it was Republicans and Independents. Across the board with the 
public, close to 80 percent of people support a national paid 
family and medical leave insurance program similar to what 
exists in California, New Jersey, Rhode Island, maybe soon in 
Oregon, certainly soon in New York, and here in D.C.
    Ms. Bonamici. Basically any industrialized country.
    Ms. Shabo. Yes. We have an opportunity here in the U.S. to 
leapfrog in some way some of those other countries by creating 
a leave that is of reasonable length, that has adequate wage 
replacement, that applies equally to women and men, and for all 
purposes, not just parental leave, but also to address the 
explosion in aging of the population and elder care.
    We know when workers have paid family leave, women in 
particular, they are more likely to return to work within a 
year of giving birth. They are likely to earn higher wages. 
They are less likely to rely on programs like public assistance 
and food stamps; same with new dads. Women and men are both 
more likely to have hundreds of thousands of dollars of 
additional income and retirement savings when they are--
    Ms. Bonamici. I do not mean to interrupt, but I also want 
to ask, yesterday was Equal Pay Day. I want to ask about that, 
too. A day when women's wages finally catch up with what men 
made last year. The Paycheck Fairness Act would put some teeth 
into that and strengthen that. What would this bill, H.R. 1180, 
do for women and equal pay?
    Ms. Shabo. At best, nothing. At worse, it would create a 
pay cut, and we know that two-thirds of minimum wage workers 
are women, the vast majority of tipped workers are women, and 
this does nothing to raise wages for folks. In fact, it takes 
money out of workers' pockets at the time when they need it 
most.
    Ms. Bonamici. When we look at the challenges facing workers 
right now, this is the wrong direction. I just wanted to also 
mention when we were talking about family leave, about 25 
percent of women go back to work within two weeks of having a 
child in this country. For those of us who have had children, 
we know how challenging that must be.
    Thank you. I yield back the balance of my time.
    Chairman Byrne. Thank you, Ms. Bonamici. The chair now 
recognizes the gentleman from Wisconsin, Mr. Grothman.
    Mr. Grothman. A couple of questions here. I will start out 
with Ms. Frey. There is an article in the National Review, and 
I do not know if it has been referred to yet, kind of talking 
about the difference of who is on the side of the worker, who 
is not here.
    The National Review's assessment is the Republicans are in 
favor of giving workers an option of doing whatever they want 
with their overtime pay, and the Democrats oppose it. Do you 
agree with that assessment, that the Republicans are kind of 
more in favor of freedom and allowing people to do what they 
want as opposed to the Democrats are saying you have to use 
your overtime this way?
    Ms. Frey. Honestly, sir, I couldn't answer that. I could 
only answer what our organization would be in favor of, which 
would be certainly giving employees the option to make those 
choices, whether to receive that compensation as overtime pay 
at the time or to use comp time.
    Mr. Grothman. Okay. I will ask Ms. Shabo a question, kind 
of along the same lines. I recently ran into an employer who at 
his surprise--he was a minimum wage employer, but he was trying 
to find a way to incentivize his employees to be more 
productive in a factory.
    To his surprise, his employees preferred getting another 3 
or 4 hours off rather than a cash bonus. This is something that 
was a surprise to him because he felt clearly he would have 
taken the cash if he was in their position.
    It does show particularly that many young people today 
would rather have Friday off or Friday afternoon off or 
something like that.
    Now, in the mix, we put a situation where some women do not 
consider money as important, and would rather have the time off 
to spend with their children or family.
    Do you not feel it is a little bit philosophically wrong, 
following up on your last answer here, to tell that woman or 
man that you do not have a choice in the matter? If you 
accumulate overtime, you have to use it, you have to take the 
money, the money should be the most important thing for you. 
And if you would rather have another, whatever, 120 hours a 
week or 120 hours a year, whatever, off to spend with your 
children, that is against the law.
    Do you not feel it is wrong for you to put yourself in the 
position of the employee and tell them they have to value money 
more?
    Ms. Shabo. But in your hypothetical, there's nothing that 
is stopping that worker from going to her employer and saying, 
I'd really like to take a month off, and, you know, I've earned 
the overtime pay, I'm putting it in the bank, I have money 
saved up to go take my vacation. May I please have some extra 
time off? If that employer values the employee and wants the 
employee to be happy, they will say yes. If they want to, they 
will say yes. An employee can use their bargaining power if 
they have it to be able to ask for that time off.
    You know, I don't think all employers are bad at all. I 
just moderated a really excellent roundtable of employers last 
week out in California, who all had different practices and all 
had similar philosophies about doing the right thing for their 
employees.
    But what we're talking about here is putting employees in a 
situation where maybe they don't have the ability to leverage 
that time off later, they need the value of their wages, and 
what we're doing here is providing an out for employers who 
don't want to take the high road to pay their employees the 
money that they are owed at the time they are owed it.
    Mr. Grothman. Well, what we are doing here is creating 
flexibility. I think the whole purpose of the Fair Labor 
Standards Act--it was put together by people who do not 
necessarily trust employers to do the best thing for their 
employees. Otherwise, we would not have the law in the first 
place.
    I think what it does is it forces employers to give 
employees an option. And I think a lot of employees, if my 
experience in talking to employers is any indication, value 
that time off. They value that family time.
    You are creating a situation here in which, in some cases, 
the employees who bank that money are forbidden from using that 
time with their family and have to take the cash, which you 
kind of implied in your response with the congresswoman before. 
And there are some women who are going to say, I do not mind if 
I do not make any money, I would rather take the time off.
    Now, at the end of the year when the professors do the 
study and they show women are not making as much money at that 
company because they have opted to take time off, but is it up 
to us to weigh in and say, you cannot value your family more 
than additional cash?
    Ms. Shabo. But in that case, that woman would already have 
worked extra hours away from her family to be able to even have 
the option of having comp time or overtime. So, I guess I'm not 
sure I'm following the hypothetical.
    Mr. Grothman. There may be times where you want more family 
time than other times. Maybe that person--could be a man, too--
depending on when his spouse works, he would rather or she 
would rather spend time with their children than have an 
outside caregiver, that sort of thing.
    Ms. Shabo. Sure.
    Mr. Grothman. Maybe they have another child, a younger 
child, and they want to spend time with the younger child. It 
seems to me that rather than having us people in Washington 
tell them what is best for them, would it not be better to 
allow the employee to determine what is in their best interest 
and best interest of their family?
    It is true that some people, if they do not have this 
option, are just going to keep working and earn more money. For 
people who think the be all and end all in life is how much 
money you make, and we have to worship those statistics saying 
you have a more satisfactory life when you are making more 
money, I can see why to oppose this bill.
    For those of us who do not think the most important thing 
in life is how much money you are making, why do you not allow 
them that option if the employer will not?
    Chairman Byrne. Ms. Shabo, his time has expired, but let me 
give you a chance to very quickly respond to that.
    Ms. Shabo. Sure. I think my basic answer is if an employee 
is in a position where they want that time, there's nothing 
that is preventing them from asking their employer to give them 
that time now.
    In terms of people building up as much money, I think about 
the 30 million women who are heads of household and live in 
poverty right now who need those wages.
    Chairman Byrne. Thank you. The gentleman's time has 
expired. I would like to thank our witnesses for taking the 
time to testify before the subcommittee today. I am going to 
turn now to Mr. Takano and ask if he has any closing remarks.
    Mr. Takano. Thank you, Mr. Chairman. Let me just say in 
response, I still say there is nothing as convenient or as 
fungible as cash. That leverage really should be left to the 
employee, as far as cash or time.
    I want to thank all of our witnesses for their testimony 
today. It is clear from this hearing that what I would like to 
call the ``Betrayal of Working Families Act,'' provides 
employers with flexibility to deny workers their overtime pay, 
while giving employees nothing in return really.
    We heard that employers can unilaterally decide that they 
do not want to allow employees to take comp time they have 
earned and cash them out instead, cancelling the doctor's 
appointment, recovering from surgery, or elder care that the 
employee might have planned.
    We heard that the Betrayal of Working Families Act would 
make it more likely that employers would force employees to 
work longer hours and deprive them of time-and-a-half pay for 
doing so. Workers desperately need more time with their 
families and more money.
    Today, most low-wage workers do not have access to a single 
paid sick day, and far too many workers earn poverty level 
wages since Congress has not raised the minimum wage in nearly 
a decade.
    This legislation plays a cruel trick on cash-strapped and 
time-strapped workers by forcing them to give up time with 
their families and pay in exchange for the hope that they might 
eventually be able to take a day off, if it is convenient to 
their employer. This is really about more leverage for the 
employer, not convenience for the employee.
    H.R. 1180 is entirely consistent with congressional 
Republicans' agenda to rig the rules of our economy in favor of 
special interests and against everyday Americans.
    In the first two months of the 115th Congress, House 
Republicans filed 40 Congressional Review Act Joint Resolutions 
to roll back rules designed to make Americans safe on the job, 
prevent discrimination, ensure educational equity, and clean 
air and clean water. The President has already signed many of 
these into law.
    This betrayal of working families has got to stop. 
Congressional Republicans should not be trying to hoodwink 
working families into handing over their overtime pay. The 
American people deserve real solutions they can count on. They 
need paid sick days and family leave, and strengthened rights 
to overtime pay.
    The pretty packaging of this legislation as so-called 
``flexibility'' for working families should fool no one. This 
is just another attempt to take money out of workers' 
paychecks. We should reject this once and for all.
    I yield back, Mr. Chairman.
    Chairman Byrne. Thank you, Mr. Takano. This law, the Fair 
Labor Standards Act, was passed in the 1930s. Let us remember 
what the workplace of the 1930s looked like. First of all, the 
vast majority of mothers with children under 18 were not in the 
workplace. Today, it is almost 71 percent.
    One of those women in the workplace in the 1930s was my 
grandmother, because my grandfather had been killed and she had 
to work. She had the typical job at the time, an 8:00 to 5:00 
job, so she was not there in the afternoons when my mother or 
my uncles had things at school. My Uncle Bill had a severe 
disease that affected his legs, eventually crippled him. There 
were times where she would have to take off work. It was tough 
on her to be able to be there for his treatments.
    Now, we have nearly three-quarters of our mothers in the 
workplace, and for them, money is not a good substitute for 
being there with the kids, rather it is a school play, an 
athletic event, a school trip, or whether they have somebody 
sick or who has a serious injury or illness, like my Uncle 
Bill.
    So, the whole idea is we are going to try to get Federal 
law in sync with what is really happening in the real lives of 
American workers. Ms. Christ and Ms. Frey told us what the real 
lives of American workers are like. A lot of them want that 
freedom to be able to trade out and get that comp time, so they 
can go on that field trip 2 months down the road, or they know 
they have a cancer treatment with an elderly parent that is 
coming up and they need to be able to bank that time to be with 
them, or do a myriad of other things that are impinging upon 
their lives.
    So, all this is trying to do is give them that flexibility, 
give them that option, which is just in keeping with what the 
new workplace looks like.
    I was sitting here watching Ms. Stefanik. She pulled out 
her cell phone. There is more computing power in that cell 
phone than there was in this whole building worth of computers 
when I was coming through college 40 years ago.
    We can do so much more from our homes and other places and 
be able to make work. Now, I know there are some concerns that 
there are some bad actors out there in the private sector that 
are going to take this law and do bad things to people.
    Well, first of all, I think that is an absolutely 
inaccurate presumption. Most employers are just exactly like 
Ms. Christ and Ms. Frey here, they are looking for ways to give 
their employees a better workplace.
    If there are bad actors out here, here is what the bill 
says under remedies. It says, ``An employer that violates 
Section 7(a)(4) shall be liable to the employee, affecting the 
amount of the rate of compensation for each hour of 
compensatory time accrued by the employee and any additional 
equal amount as liquidated damages,'' so it is twice, and 
attorney fees.
    Now, if you are an employer and you have any sense about 
you, that is not a very good economic decision, and you cannot 
just sit there, they are not going to want to bring this 
action. I think anybody with any common sense in business is 
going to presume that is going to happen, and they are not 
going to make that economic decision.
    That is why it is put in here it is twice the amount of pay 
plus attorney fees. By the way, and I do not mean this in any 
way derogatory to you, Mr. Court, or to me when I was a labor 
attorney, those attorney fees can be substantial. They are 
almost as big a reason not to do it as anything else here.
    So, the remedies provided in here are pretty good, they are 
pretty effective in telling an employer do not violate the 
protections in this law to keep employees from being taken 
advantage of here.
    So, I really appreciate the testimony we have had today. It 
has flushed a lot of good issues. There was good back and 
forth. I think we know what some points and counterpoints are 
that will inform other members of this committee when this bill 
comes up for markup in the full committee, and inform the 
entire House when it comes before the House.
    I do think there is one thing we can all agree upon. We 
should be doing everything we can to help those working 
mothers, those working dads, and other people, to have the sort 
of flexibility that we can provide them in the workplace of the 
21st century. Maybe it is time to get away from a 1930s law to 
do that.
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    Thank you very much. This hearing is adjourned.
    
    [Whereupon, at 11:43 a.m., the subcommittee was adjourned.]

                                 [all]