[Congressional Record Volume 142, Number 35 (Thursday, March 14, 1996)]
[Extensions of Remarks]
[Page E368]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




           LEGISLATION AMENDING THE FAIR LABOR STANDARDS ACT

                                 ______


                         HON. LINDSEY O. GRAHAM

                           of south carolina

                    in the house of representatives

                        Thursday, March 14, 1996

  Mr. GRAHAM. Mr. Speaker, today I am introducing legislation to allow 
professional services firms which contract with the Federal Government 
to pay their professional employees on an hourly basis or a salary 
basis, without defeating their exemption from overtime under the Fair 
Labor Standards Act.
  The FLSA exempts from overtime requirements professional employees 
who meet a duties test laid out by the Department of Labor's 
regulations under the act. Professional employees must also be paid on 
a salary basis, meaning that they must be paid on a salary or fee basis 
but not on the basis of number of hours worked. If the employee does 
not meet the duties test for a professional or the salary basis test, 
the Department of Labor and the courts have held that the employee is 
not exempt from overtime and therefore must be paid time-and-a-half for 
all hours worked over 40 within a 7-day period.
  When the Federal Government contracts with private firms for 
professional services, most requests for proposals for such contracts 
require that the contractor submit bids as to the fee for the 
professional services that are based on hourly rates. However, because 
the contractor must bid the contracts on an hourly basis and, as a 
practical matter, calculate the pay of the professional employees 
working on the contract on an hourly basis, these employees may not 
meet the requirements for the overtime exemption under the act.
  In addition to adversely affecting contractors, the salary basis 
requirement under the regulations can have the effect of requiring 
overtime pay for well-compensated, highly skilled employees, many of 
whom are lawyers, certified public accountants and financial analysts--
simply because the employer compensates the employee on an hourly 
basis, as opposed to a salary basis.
  This legislation will enable those firms contracting with the Federal 
Government to pay their employees in the manner which meets the 
requirements of the contract without running afoul of the FLSA.

                          ____________________