[Congressional Record Volume 143, Number 60 (Friday, May 9, 1997)]
[Senate]
[Pages S4257-S4259]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   THE FAMILY FRIENDLY WORKPLACE ACT

  Mr. JEFFORDS. Mr. President, the legislation that we are discussing 
today, S. 4, the Family Friendly Workplace Act, is timely, commonsense 
legislation designed to give working families a much-needed option in 
balancing their busy work and family schedules. I am extremely pleased 
that the leadership has made passage of this bill a high priority.
  The Family Friendly Workplace Act is intended to provide private-
sector employers and employees with the same optional workplace 
flexibility benefits that public-sector employees have enjoyed since 
1978. S. 4 provides three alternative work schedule options: One, 
compensatory time off in lieu of monetary overtime pay; two, biweekly 
work schedules; and three, flexible credit hours. I will explain each 
of these in more detail in a minute. In addition to the workplace 
scheduling option, S. 4 offers much-needed salary basis reform, and 
this is a very important problem that we now have as a result of recent 
court decisions.
  Mr. President, there seem to be many misconceptions about what this 
legislation does and what it doesn't do. I appear today to clear that 
up.
  I wanted to go over, first, the four components of S. 4. I believe 
this will give some of my colleagues a better understanding of this 
bill.
  The first component of S. 4 is the compensatory time provision. S. 4 
would amend the Fair Labor Standards Act's overtime provisions to allow 
employers to offer their employees the option of compensatory time off 
instead of traditional overtime pay.
  In other words, you can trade the time and a half pay for 
compensatory time off. This provision will allow hourly employees the 
ability to take time off as a result of having worked overtime. Like 
State and local government employees, private sector employees would 
accrue comptime at the same rate as an employer's normal rate of 
overtime pay, that is 1\1/2\ hours of compensatory time off for every 
hour of overtime worked.
  This legislation is not mandatory. It does not require employers to 
offer compensatory time off. If employers decide to offer the comptime 
option to their employees, it is up to the employees to decide whether 
or not to accept it. Employees who are members of unions will choose 
compensatory time through the collective bargaining process. Nonunion 
employees, on the other hand, must ``knowingly and voluntarily'' enter 
into an agreement with their employer for comptime before they perform 
any overtime work. Again, I want to stress that this provision is 
purely voluntary.
  Mr. President, this legislation goes to great lengths to protect 
employees. If a nonunion employee does not like the comptime program, 
he or she may withdraw at any time by providing his or her employer 
with written notice. The withdrawal of employees who are members of 
unions will be controlled by the collective bargaining agreement.
  I see no reason why unions should be in opposition to this bill.
  If an employer finds that its comptime program is not working out, it 
can cancel its compensatory time off policy by providing the employees 
who have elected to earn comptime with 30 days with written notice. 
Again, there is nothing compulsory about this law at all.
  Employees are also permitted to cash out--receive the case equivalent 
of their accrued comptime--at any time.
  Let me repeat that. Employees are permitted to cash out--receive the 
pay equivalent of their accrued comptime--at any time. So even if an 
employee selects the comptime option, if that employee decides at a 
later date that he or she needs the overtime pay instead of time off, 
the employee has the ability to cash out, to get cash for their 
overtime work.
  An employee will also receive the cash equivalent of any unused 
compensatory hours whenever an employer discontinues its compensatory 
time policy or in situations where an employee withdraws, resigns or is 
terminated.
  The employer must cash out the employee's compensatory time at either 
the employee's overtime rate or the

[[Page S4258]]

employee's final rate of pay, depending on which is greater.
  The legislation allows an employee to accrue up to 240 hours of 
compensatory time during a 12-month period. If, after the 12-month 
period, an employee has not used his accrued time, the employer has 31 
days to remit the cash equivalent of those hours. If an employee has 
accrued over 80 hours at any time, an employer may remit the cash 
equivalent of those excess hours, in lieu of the employee taking time 
off.
  While opponents of the legislation fear that employers will control 
when an employee will be able to use accrued compensatory time off, 
their concern is unfounded. The bill clearly states that an employee 
must be allowed to use his or her accrued compensatory time off within 
a reasonable period of time provided that the time off will not unduly 
disrupt the workplace. This portion of the bill mirrors what is already 
firmly established, strongly recognized, and upheld in the FLSA and the 
regulations applying to the public sector.
  Under a compensatory time off program, an employee enjoys the 
preexisting protections of the Fair Labor Standards Act, including 
prohibitions against violations of section 7 and FLSA's discrimination 
provision, as well as S. 4's anticoercion provision, which will be an 
additional provision of FLSA. No employee may be coerced, intimidated 
or threatened to accept any of the bill's flexible workplace options. 
Violation of any of these provisions submits an employer to additional 
liability including liquidated damages and any other viable remedy at 
law or equity.


                        Biweekly Work Schedules

  The second alternative is a work scheduling option called biweekly 
work schedules. Biweekly schedules give employees the option of 
scheduling 80 hours at any time within a 2 week period rather than 
confining employees to scheduling 40 hours in 1 week. This greater 
flexibility gives employees the ability to create schedules that 
coordinate their work responsibilities with their personal obligations.
  That is an important thing to know. This gives the employees the 
flexibility to try to manage their hours within the 2-week period to 
take care of their own personal problems, whether it is with schools, 
day care, or whatever else it is--to make everything a little bit more 
flexible, a little bit more friendly to the family.
  Just as the election of compensatory time is voluntary, so too, is 
the election of biweekly work schedules. Employers do not have to offer 
biweekly schedules and any employee who is not interested in a biweekly 
schedule and may keep a traditional work schedule.
  Again, I want to emphasize that the biweekly schedule is completely 
voluntary. Employees who are satisfied with the existing 40 hour work 
week are under no obligation to enter into a biweekly schedule 
arrangement with their employer.
  An employee who wants to work under a biweekly schedule must meet 
with his or her employer prior to each 2-week work period and 
prearrange a schedule for that period. Regardless of how the hours are 
divided, the employee will not be required to work past 80 hours during 
the 2-week period. An employer will have to pay overtime for any 
deviations from the schedule. Any hours that an employer requests the 
employee to work beyond the predetermined 80 scheduled hours are 
considered overtime.
  So overtime provisions are maintained. Again, it is totally 
voluntary. So the employees have flexibility and have an understanding 
of what happens if the employer asks them to deviate from that 
schedule.
  Once the biweekly period begins, an employer cannot alter an 
employee's scheduled hours to meet the employer's overtime needs. Even 
if the employee has worked less than 40 hours during the week, if an 
employer asks the employee to work hours in addition to the preset 
schedule, the additional time is considered overtime.
  Under S. 4's biweekly work schedule provisions, employees enjoy the 
preexisting safeguards of the FLSA. Employees will also benefit from S. 
4's provisions prohibiting an employer from directly or indirectly 
intimidating, threatening, or coercing an employee to participate in a 
biweekly schedule program.
  Again, there is very strong protection for the employee to be 
protected against any abuse by the employer.
  For union employees, the particulars of a biweekly work schedule, 
such as hours to be worked and methods of withdrawal, will be set forth 
in a collective bargaining agreement.
  There is no reason why any union should disagree with this. If unions 
do not care for the biweekly scheduling option, they do not have to 
select it.
  In the nonunion setting, an employee would enter into an agreement 
with his or her employer. Again, it is totally at the option of the 
employer and the employee.
  Because biweekly work schedule programs are voluntary, nonunion 
employees may withdraw their agreement to participate by providing 
written notice to the employer. Similarly, an employer may discontinue 
a biweekly work schedule program upon 30 days notice to all 
participating employees.
  The third provision may seem new to some of you but, again, we have 
taken this concept--that of flexible credit hours--from the public 
sector.


                         Flexible credit hours

  It is not uncommon for employees to need to take unpaid leave for 
common life events such as caring for a loved one, assisting an elderly 
parent or studying for an exam. Employees may wish to work additional 
hours, in excess of the traditional 40 hour week, in order to bank 
those additional hours for future use.
  Under the FLSA, however, an hourly employee is not permitted to carry 
over additional hours for use in a future work week. Instead, the 
employer would have to pay overtime for the additional hours worked by 
that employee. Employers who have no need for their employees to work 
extra hours are unlikely to be willing to pay employees an overtime 
premium. As a result, there is really a disincentive under the FLSA for 
employers to provide employees with the flexibility that they demand.
  To assist employees who would like to accrue hours for future use, 
the third provision in this legislation is the flexible credit hour 
program. The flexible credit hour program would allow an employee to 
request to work up to 50 hours over his or her regularly scheduled 
hours.
  Flexible credit hours are awarded on a one-to-one ratio: 1 credit 
hour for one hour over an employee's regular schedule. Each hour is a 
flexible credit hour which is then banked for future use. When 
employees use their flexible credit hours they are compensated for 
their time off at their regular rate of pay.
  Therefore, employees wishing to take an additional week of vacation 
would have the ability to work 2 extra hours a week for 20 weeks and 
then use the 40 flexible credit hours that they have banked so that 
they collect a regular paycheck on their extra week off.
  It is very, very important for workers that are trying to plan their 
time off and who are trying to coincide with school vacations, or other 
family events that will require them to be away from work.
  Allowing employees to bank hours would also provide the millions of 
Americans who do not work overtime hours with more flexibility because 
it would give them the ability to work additional hours so that they 
could use the paid time off when necessary.
  As with compensatory time and biweekly programs, an employer has the 
initial decision of whether to offer the flexible credit hour program. 
However, once an employer offers the program, whether an employee 
participates is 100 percent voluntary. If an employee elects to 
participate, the employer and the employee jointly designate hours for 
the employee to work that are in excess of the basic work requirement 
of the employee so that the employee can accrue flexible credit hours.
  The anticoercion, remedy, and sanction provisions applicable to 
compensatory time-off options and biweekly work schedule programs apply 
to the flexible credit programs as well.
  Compensation for unused accrued credit hours is handled in much the 
same way that compensation for unused compensatory time is handled. If 
an employee has not used all his or her credit hours within a 1-year 
period, the employer is required to cash out the employee's remaining 
credit hours at the employee's normal rate of pay. An employee must be 
allowed to use accrued credit hours within a reasonable period of time 
following the request so

[[Page S4259]]

long as doing so will not unduly disrupt the workplace. This program's 
particulars also track those of both the compensatory time off option 
and the biweekly work schedule program. Employees remain entitled to 
the same protections and remedies, agreement, accrual, withdrawal, and 
notice requirements.
  These are all just merely required because the FLSA and the 40-hour 
work week are so rigid that it is very difficult for employees and 
employers to arrange things such that they can help employees to better 
manage the obligations of work and family.
  The final provision of S. 4, the salary basis fix, may seem a bit 
arcane, but it is a very serious problem.
  The fourth provision impacts the treatment of salaried employees 
rather than hourly wage employees.
  The final portion of this legislation helps clarify a problem that 
has arisen under the ``salary basis'' test. In recent decisions, courts 
have clouded the salary basis test and caused unnecessary litigation 
and windfall awards for highly paid employees. This portion of the 
legislation simply clarifies who is and who is not an exempt employee 
to prevent additional unfair payments of overtime back pay to salaried 
employees.
  Under the salary basis test, an employee is considered to be paid on 
a salary basis, and thus exempt from FLSA, if that employee regularly 
receives a straight salary. The FSLA provides that an exempt employee's 
salary cannot be--subject to reduction for absences of less than a day. 
A number of court cases, however, have interpreted this language to 
mean that the theoretical possibility of a salary being docked--that 
is, decreased--for an absence of less than a day is enough to destroy 
the employee's exemption even if that employee has never experienced an 
actual deduction.
  It is one of those things where the Court has found something they 
believe to be an accurate interpretation of the law. When in fact it is 
not Congress' intent for the law to work this way. The impact that it 
has can be incredibly destructive.
  For more than 5 decades the ``subject to'' language generated little 
or no controversy. In recent years, however, courts began to interpret 
the salary-basis standard, seizing upon the ``subject to'' language, 
large groups of employees, many of them who are highly compensated, 
have won multimillion-dollar judgments. These awards have been granted 
in spite of the fact that many of the plaintiff employees have never 
actually experienced a pay deduction of any kind and have never 
expected to receive overtime pay in addition to their ``executive 
administrative or professional'' salaries. This problem has been 
particularly onerous in the public sector.
  I want to be clear that the bill is intended to clarify that an 
employee would not lose his or her exempt status just because his or 
her employer has a policy on the books that provides for a reduction in 
pay for absences of less than a full day or less than a full week. 
Those employees should remain exempt and this bill would ensure that 
happens. However, if an employee's salary was actually docked, the 
legislation would not affect the outcome as to that employee.
  Again, I want to emphasize that if an employer docks the pay of a 
salaried employee, that employee could still lose his or her exempt 
status, but only if it has been docked.
  The legislation also clarifies that employers may give bonuses and 
overtime payments to salaried employees without destroying their 
exemption from the FLSA. That is the opposite side of the equation.
  Finally, Mr. President, while the FLSA was enacted to protect 
workers, many of today's work force view certain of the FLSA provisions 
as harmful rather than helpful. Given the overwhelming success of 
public sector programs which S. 4 is modelled after here, I believe it 
is important that Congress now extend the same freedom and flexibility 
to private workers.
  Again, I emphasize this is voluntary for both parties. The flexible 
work schedules would give employees more control over their lives by 
giving them a better tool to balance their family and work obligations. 
Employers and hourly employees must be given the ability to reach 
agreement on flexible schedules beyond the standard of the inflexible 
40-hour workweek and to bank compensatory time in lieu of cash overtime 
where such an agreement is mutually beneficial, and voluntarily entered 
into. Salary-basis reform for nonexempt employees would also increase 
flexibility options.
  The FLSA should be amended to assist workers in balancing the needs 
of an evolving work environment and quality family time.
  I thank most of all Senator Ashcroft, who has been the leader in this 
fight and who has done an outstanding job of bringing the attention to 
this legislation, not only to the Members, but nationwide. I look 
forward to working with him and Senator DeWine on this bill. Mr. 
President, as I discuss the wonderful provisions in this legislation I 
can't help but wonder why anybody could oppose it, but I expect that 
some of my colleagues will express a differing view.
  Mr. President, I yield the floor.
  Mr. DeWINE addressed the Chair.
  The PRESIDING OFFICER (Ms. Collins). The Senator from Ohio is 
recognized.
  Mr. DeWINE. Madam President and colleagues, let me first congratulate 
Senator Jeffords for bringing this bill to the floor and for a very 
eloquent statement about the merits of this bill. I see Senator 
Ashcroft, who is the author of the bill, in the Chamber. I know he 
wishes to speak about the bill, as I do. I also see Senator Kennedy, 
who wishes to speak as well. Before I begin to talk about this bill, I 
would like to talk about two other items.

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