[Congressional Record Volume 145, Number 50 (Tuesday, April 13, 1999)]
[Extensions of Remarks]
[Page E613]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page E613]]



   INTRODUCTION OF LEGISLATION TO REFORM THE FAIR LABOR STANDARDS ACT

                                 ______
                                 

                          HON. CASS BALLENGER

                           of north carolina

                    in the house of representatives

                        Tuesday, April 13, 1999

  Mr. BALLENGER. Mr. Speaker, today I am introducing two bills which 
reflect our continued efforts to make the Fair Labor Standards Act 
(FLSA) applicable to today's workforce. The FLSA is one of the most 
outdated workplace regulatory schemes faced by businesses and 
employees. As the primary statute governing the payment of wages and 
hours of work, the FLSA has changed little since it was enacted in 
1938.
  In today's business environment, employers and employees must find 
ways to compete and meet the challenges of an increasingly competitive 
and global economy. Government should be user-friendly, less 
confrontational, and less costly. The regulatory scheme must be 
designed to be flexible to accommodate different situations and future 
challenges. The demographics of the workforce and the characteristics 
of jobs have changed dramatically over the past 60 years. But, the FLSA 
has not kept pace with these changes and it now stands out as being 
rigid and inflexible for today's work styles and work arrangements.
  The two bills that I am introducing today will update areas of the 
FLSA which regulate scheduling and compensation. Currently, the FLSA 
does not allow private sector employers to give their employees the 
choice of compensatory time off in lieu of overtime wages. The first 
bill, ``The Working Families Flexibility Act of 1999,'' would give 
private sector employers and employees an option which Federal, State, 
and local governments have had for many years--the choice of ``comp 
time'' in lieu of overtime pay. The legislation is identical to that 
which the House passed during the 105th Congress.
  The Working Families Flexibility Act answers the call of many workers 
for increased flexibility and choices in the workplace. Many employees 
are finding it increasingly difficult to find enough time for important 
family obligations or outside interests, which makes receiving comp 
time instead of cash overtime an attractive option.
  Many employers who want to be family-friendly find that flexible 
scheduling can be extremely difficult for employees who are paid by the 
hour and covered by the overtime provisions in the FLSA. Suppose an 
employee has a terminally ill parent who lives several states away. 
Days off with pay can become precious for that employee when a 2-day 
weekend does not provide enough time to travel and spend time with that 
parent. When that employee works a few hours of overtime each week, he 
or she may prefer to be paid with time off rather than with cash wages. 
If the individual is employed in the public sector, then he or she 
would have the choice of receiving paid time off in lieu of cash wages 
for overtime hours worked. However, under current Federal law, if the 
individual is employed in the private sector then he or she cannot 
choose paid time off, even if that form of compensation is preferred.
  The Working Families Flexibility Act would allow employers to make 
comp time available as an option for employees. Employees would have 
the choice, through an agreement with the employer, to take overtime 
pay in the form of paid time off. As with overtime pay, comp time hours 
would accrue at a rate of one and one-half hours of comp time for each 
hour of overtime worked. In response to concerns about employees being 
coerced by employers into choosing comp time over cash wages, the 
legislation includes numerous protections to ensure that employees 
cannot be pressured into one choice or the other.
  Employees could accrue up to 160 hours of comp time within a 12-month 
period. The legislation would require the employer to annually cash-out 
any unused comp time accrued by the employee. Employees may withdraw 
from a comp time agreement at any time and request a cash-out of any or 
all accrued, unused comp time. The employer would have 30 days in which 
to comply with the request. The legislation would also require an 
employer to provide the employee with at least 30 days notice prior to 
cashing out any accrued time in excess of 80 hours or prior to 
discontinuing a policy of offering comp time.
  Employees would be able to use their accrued comp time at anytime, so 
long as its use did not unduly disrupt the operations of the business 
(the same standard used in the public sector and under the Family and 
Medical Leave Act.) Employers would be prohibited from requiring 
employees to take accrued time solely at the convenience of the 
employer.

  I want to emphasize that this legislation does not eliminate or 
change the traditional 40-hour workweek. It simply provides employees 
with another option in the workplace--time off instead of overtime pay. 
This concept may be revolutionary to some, but to America's workers, 
who are increasingly frustrated about coping with the demands of work 
and family responsibilities, it is a long overdue change.
  The second bill, ``The Rewarding Performance in Compensation Act,'' 
would help workers to share, financially, when their efforts help 
produce gains for their company in productivity, sales, fewer injuries, 
or other important aspects of performance.
  The pressures of worldwide competition and rapid technological change 
have forced most employees to seek continuous improvement in 
productivity, quality, and other aspects of company performance. 
Employers often seek to encourage and reward employee efforts to 
improve productivity, quality, etc. through what are called 
``gainsharing'' plans--linking additional compensation to measurable 
improvements in company, team, or individual performance. Employees are 
assigned individual or group productivity goals and the savings 
achieved from improved productivity, or the gains, are then shared 
between the company and the employees. The payouts are based directly 
on factors under an employee's control, such as productivity or costs, 
rather than on the company's profits. Thus, employees directly benefit 
from improvements that they help to produce by increasing their overall 
compensation.
  Unfortunately, employers who choose to implement such programs can be 
burdened with unpredictable and complex requirements by the Fair Labor 
Standards Act, which clearly did not envision these types of ``pay 
based upon performance'' plans.
  For example, if a bonus is based on production, performance or other 
factors, the payment must then be divided by the number of hours worked 
by the employee during the time period that the bonus is meant to 
cover, and added to the employee's regular hourly pay rate. This 
adjusted hourly rate must then be used to calculate the employee's 
overtime rate of pay. For other types of employees, such as executive, 
administrative, or professional employees who are exempt from minimum 
wage and overtime, an employer can easily give financial rewards 
without having to recalculate rates of pay.
  The Rewarding Performance in Compensation Act would amend the FLSA to 
specify that an employee's regular rate of pay for the purposes of 
calculating overtime would not be affected by additional payments that 
reward or provide incentives for employees who meet productivity, 
quality, efficiency or sales goals. By eliminating disincentives in 
current law, this legislation will encourage employers to reward their 
employees and make it easier for employers to ``share the wealth'' with 
their employees.
  I would urge my colleagues to support these two common sense reforms 
that will help to bring the FLSA, passed in 1938, a little closer to 
the needs of employees that the law is meant to benefit, as we enter 
the 21st century.

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