[House Report 104-219]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-219
_______________________________________________________________________
COURT REPORTER FAIR LABOR AMENDMENTS OF 1995
_______________________________________________________________________
August 1, 1995.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Goodling, from the Committee on Economic and Educational
Opportunities, submitted the following
R E P O R T
[To accompany H.R. 1225]
[Including cost estimate of the Congressional Budget Office]
The Committee on Economic and Educational Opportunities, to
whom was referred the bill (H.R. 1225) to amend the Fair Labor
Standards Act of 1938 to exempt employees who perform certain
court reporting duties from the compensatory time requirements
applicable to certain public agencies, and for other purposes,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Court Reporter Fair Labor Amendments
of 1995''.
SEC. 2. LIMITATION ON OVERTIME COMPENSATION FOR COURT REPORTERS.
Section 7(o) of the Fair Labor Standards Act of 1938 (29 U.S.C.
207(o)) is amended--
(1) by redesignating paragraph (6) as paragraph (7); and
(2) by inserting after paragraph (5) the following new
paragraph:
``(6) The hours an employee of a public agency performs court
reporting transcript preparation duties shall not be considered as
hours worked for the purposes of subsection (a) if--
``(A) such employee is paid at a per-page rate which is not
less than--
``(i) the maximum rate established by State law or
local ordinance for the jurisdiction of such public
agency,
``(ii) the maximum rate otherwise established by a
judicial or administrative officer and in effect on
July 1, 1995, or
``(iii) the rate freely negotiated between the
employee and the party requesting the transcript, other
than the judge who presided over the proceedings being
transcribed, and
``(B) the hours spent performing such duties are outside of
the hours such employee performs other work (including hours
for which the agency requires the employee's attendance)
pursuant to the employment relationship with such public
agency.
For purposes of this section, the amount paid such employee in
accordance with subparagraph (A) for the performance of court reporting
transcript preparation duties, shall not be considered in the
calculation of the regular rate at which such employee is employed.''.
SEC. 3. EFFECTIVE DATE.
The amendments made by section 2 shall apply after the date of the
enactment of this Act and with respect to actions brought in a court
after the date of the enactment of this Act.
Explanation of Amendments
The provisions of the substitute are explained in this
report.
Purpose
The purpose of H.R. 1225, the Court Reporter Fair Labor
Amendments of 1995, is to limit the overtime compensation for
official court reporters when being paid at a per-page rate
outside of the hours such employee performs other work pursuant
to the employment relationship with the court.
Committee Action
H.R. 1225 was introduced by Representative Harris Fawell on
March 14, 1995. There were 4 original cosponsors. The
Subcommittee on Workforce Protections held a hearing on H.R.
1225 on July 11, 1995. At that hearing, testimony was received
from Ms. Paula Laws, President-elect, National Court Reporters
Association.
On July 20, 1995, the Committee on Economic and Educational
Opportunities approved H.R. 1225, as amended, on a voice vote,
and, by a voice vote, ordered the bill favorably reported.
Committee Statement and Views
Background
State and local official court reporters are typically
employed by the court at an annual salary, which is set by the
court and/or the State or local government. The reporter's
primary duties while working for the court are to record and
read back court proceedings. While working in this capacity,
the court reporter is clearly an employee of the court and is
entitled to overtime compensation for work in excess of forty
hours in a given work week.
In addition to their in-court duties, court reporters are
usually required, often by law, to prepare and certify
transcripts of their records for attorneys, litigants, and
others. Typically, the court reporter bills the entity for whom
the transcript is prepared directly and collects a per page fee
set by law or court rule for such work.
The current payment system for official court reporters has
been in place in most State and local courts since long before
the Fair Labor Standards Act (FLSA) was extended to cover
public employees. The ramifications of the extension of the
overtime requirements of the FLSA to the relatively unique
compensation system under which most court reporters operate
were not considered by the Congress when it extended the Act to
public employees. Indeed, until 1993, the obligations imposed
by the FLSA with regard to court reporters while engaged in
preparing transcripts of court proceedings were not generally
understood.
On March 18, 1993, and August 26, 1994, the Department of
Labor expressed its view to State court administrators in
Indiana and Oregon that the time court reporters spent
preparing transcripts generally must be counted in calculating
the employer's overtime obligation to the reporter. Since that
time, both employers and associations representing court
reporters have expressed the view that where reporters perform
transcription preparation duties on their own time, and are
compensated on a per-page basis for that work, that time should
not be counted for purposes of determining the employer's
overtime obligation to the reporter.
The interest of employers in exempting certain
transcription preparation duties from overtime calculations is
self evident. That the ostensible beneficiaries of the policy,
the court reporters, should also seek to exempt certain duties
from the overtime calculation is more interesting. Though the
amount of income an official reporter derives from per-page
compensation for transcription services varies from
jurisdiction to jurisdiction and from reporter to reporter, it
can be substantial and is generally in excess of what the
reporter would otherwise receive if compensated solely on a
time-and-a-half basis. If the courts are required to include
all time spent by a reporter in preparing transcripts for
purposes of calculating overtime, notwithstanding the fact that
the reporter is otherwise being compensated by the party for
whom the transcript is prepared on a per-page basis, and must
compensate the reporter accordingly, the courts have a powerful
incentive to alter the traditional means by which reporters are
compensated for transcription preparation duties.
On May 22, 1995, the Department of Labor further elaborated
its view in a letter from Maria Echaveste, Administrator of the
Wage and Hour Division, to Mike Ochs, Manager of State
Relations of the National Court Reporters Association.
In our review, we considered it significant that
often the responsibility of the court reporter to
perform transcription services for third parties is
imposed by statute or ordinance, rather than the court
system. We believe a distinction should be drawn
between situations imposed by statute or ordinance and
situations where additionally the court exercises a
supervisory role. Even with such a distinction there
exist a number of different scenarios in which court
reporters could still be considered to be employees of
the court or judge when preparing transcripts for
outside or indigent parties.
In summary, we conclude that transcription
preparation for outside private parties, not connected
with the state or local government that employs the
court reporter, may be considered ``independent
contractor'' work so long as the work is totally
divorced from the employment relationship. Thus none of
the private work may be performed during working hours.
The fact that the reporter is required by statute or
ordinance to perform the work would not by itself
render the court the employer. The court may continue
to perform the ministerial role of prescribing format
and certifying the accuracy of the completed
transcript, by may not be involved in setting fees,
approving the hiring of assistants, or disciplining the
reporter through the employment relationship if the
work is not properly or timely performed. (Emphasis in
the original, footnotes omitted.)
Though in part acceding to the desire of reporters and
their employers that time spent preparing transcripts not be
included in the overtime calculation, a substantial amount of
transcription preparation duties would remain subject to the
requirements of FLSA. For example, where a public defender and
the court reporter are employed by the same county government,
transcription preparation duties performed on behalf and at the
request of the public defender are performed at the request of
the employer and, therefore, are part of the employment
relationship. Further, distinguishing between transcription
preparation duties that may be part of the employment
relationship, and therefore subject to the overtime
requirements of the FLSA, and those that are not may not be
easy. The point at which the court's fulfillment of its
ministerial function, for example, transgresses into something
less than a total divorce from the employment relationship may
not be readily recognizable.
For the aforesaid reasons, both court reporters and their
public employers have continued to seek legislation to clarify
the applicability of the Fair Labor Standards Act to
circumstances in which a court reporter performs transcription
preparation duties on his or her own time and is compensated
for such duties on a per-page basis. The Committee concurs
that, given the historical methods of compensating reporters
for such work and within the parameters established by ``The
Court Reporter Fair Labor Amendments of 1995'' as reported, the
protection afforded employees by Section 7(a) of the Fair Labor
Standards Act (29 U.S.C. Section 207(a)) is, in this instance,
unnecessary.
Legislative Remedy
H.R. 1225, The Court Reporter Fair Labor Amendments of
1995, introduced by Representative Harris Fawell, as amended,
seeks to clarify that time spent by official court reporters
preparing transcripts for a per-page fee during ``off hours''
shall not be considered ``hours worked'' for purposes of
Section 7(a) of the Fair Labor Standards Act (FLSA). In
particular, the legislation provides that where court reporters
are being compensated on a per-page basis for transcription
work performed on the court reporter's own time, the time spent
on that work need not be counted as hours worked for purposes
of determining the employer's overtime obligation to that
reporter.
The transcription preparation duties will not be considered
``hours worked'' as long as the official court reporter is
being paid a per-page rate which is either the maximum rate
established by law in the jurisdiction, the maximum rate in
effect July 1, 1995 if the rate is administratively established
by judicial or administrative officer, or a rate freely
negotiated between the court reporter and the party requesting
the transcript.
The per-page rates charged by official court reporters are
generally set by law or regulation in each jurisdiction.
Sometimes the rate is fixed, but many jurisdictions prescribe a
maximum rate, allowing the court reporter and the party
requesting the transcript to negotiate a lower amount. The bill
enables the parties to do this as long as the court reporter is
not constrained by the court or any other party in his or her
ability to negotiate a rate that is acceptable to the official
court reporter.
Where the transcription is being prepared for the judge who
presided over the proceedings being transcribed, the maximum
per page rate must be paid for the bill's provisions to apply.
If a rate lower than the maximum or no per page rate is being
paid for a transcript prepared for the presiding judge, the
time spent by the official court reporter preparing the
transcript will continue to be considered hours worked for
purposes of Section 7(a) of the Fair Labor Standards Act.
To be clear, the legislation has no effect in situations
where an official court reporter is not paid on a per-page
basis for transcription preparation duties. The legislation
only applies in cases where a per-page rate has been
established by state law or local ordinance, or otherwise
established by a judicial or administrative officer and in
effect on July 1, 1995. Though court reporters may freely
negotiate to be compensated for transcription preparation
duties below the maximum rate otherwise permitted, where a
jurisdiction acts administratively, and not by law or
ordinance, to reduce rates below those in effect on July 1,
1995, all transcription preparation duties must be counted for
purposes of calculating overtime. In cases where there is no
per-page rate in effect on July 1, 1995, and the court desires
to establish one, the legislation provides that the per-page
rate must be established by state law or local ordinance for
the jurisdiction of such public agency in order for the
provisions of this legislation to be applicable.
Under Section 7(o)(6)(B) of the FLSA as amended by the
bill, the exemption from ``hours worked'' only applies to
situations where the official court reporter is preparing
transcripts on his or her own time. If the work is being
performed while the official court reporter's attendance at the
courthouse or some other location is required as part of the
employment relationship, the time spent preparing the
transcript in that location will continue to be considered
``hours worked'' for purposes of the Fair Labor Standards Act.
In paying official court reporters the overtime premium of
one-and-one-half times the court reporter's ``regular rate'' as
required under Section 7 of the Fair Labor Standards Act, the
public agency is not required to include within the ``regular
rate'' any of the per-page fees described in Section 7(o)(6)(A)
of the Act as amended by the bill. This exclusion applies
regardless of whether the court reporter is performing the work
during the hours described in Section 7(o)(6)(B) of the Act as
amended by the bill.
Conclusion
This legislation is necessary to head off large and costly
disruptions in the state and local court systems. In
particular, the legislation will preempt dramatic changes in
the way official court reporters are paid and how they perform
transcription work.
Summary
H.R. 1225, as amended, would amend the Fair Labor Standards
Act (FLSA) to clarify that time spent by official court
reporters preparing transcripts for a per-page fee during ``off
hours'' shall not be considered ``hours worked'' for the public
agency at which such employee is employed. The bill is limited
in its application to employees of a public agency who perform
court reporting transcription duties.
Section-by-Section Analysis
Section 1
Provides that the short title of the bill is ``The Court
Reporter Fair Labor Amendments of 1995.''
Section 2
Clarifies that the hours a court reporter spends performing
transcript preparation duties for a per-page rate shall not be
considered as hours worked for the public agency at which such
employee is employed. The per-page rate cannot be less than
either (1) the maximum rate established by State law or local
ordinance; (2) the maximum rate otherwise established by
judicial or administrative officer and in effect on July 1,
1995; or (3) the rate freely negotiated and agreed to between
the court reporter and the party requesting the transcript,
other than the judge who presided over the proceedings. In
addition, the transcription preparation work must be performed
at a time when the employee is not required to be present
pursuant to the employment relationship with the court.
Section 3
Specifies that the provisions of the bill shall take effect
on the date of enactment.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 2(l)(3)(A) of rule XI of the
Rules of the House of Representatives and clause 2(b)(1) of
rule X of the Rules of the House of Representatives, the
Committee's oversight findings and recommendations are
reflected in the body of this report.
Inflationary Impact Statement
In compliance with clause 2(l)(4) of rule XI of the Rules
of the House of Representatives, the Committee estimates that
the enactment into law of H.R. 1225 will have no significant
inflationary impact on prices and costs in the operation of the
national economy.
Government Reform and Oversight
With respect to the requirement of clause 2(l)(3)(D) of
rule XI of the Rules of the House of Representatives, the
Committee has received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 1225.
Committee Estimate
Clause 7 of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison by the
Committee of the costs which would be incurred in carrying out
H.R. 1225. However, clause 7(d) of that rule provides that this
requirement does not apply when the Committee has included in
its report a timely submitted cost estimate of the bill
prepared by the Director of the Congressional Budget Office
under section 403 of the Congressional Budget Act of 1974.
Application of Law to Legislative Branch
Section 102(b)(3) of Public Law 104-1 requires a
description of the application of this bill to the legislative
branch. This bill changes the Department of Labor
interpretations of laws applying to State and local court
reporters. The Department's interpretation and this bill do not
affect legislative branch employees.
Unfunded Mandate Statement
Section 423 of the Congressional Budget and Impoundment
Control Act requires a statement of whether the provisions of
the reported bill include unfunded mandates. The bill does not
contain any unfunded mandates.
Budget Authority and Congressional Budget Office Cost Estimate
With respect to the requirement of clause 2(l)(3)(B) of
rule XI of the House of Representatives and section 308(a) of
the Congressional Budget Act of 1974 and with respect to
requirements of clause 2(l)(3)(C) of rule XI of the House of
Representatives and section 403 of the Congressional Budget Act
of 1974, the Committee has received the following cost estimate
for H.R. 1225 from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 27, 1995.
Hon. William F. Goodling,
Chairman, Committee on Economic and Educational Opportunities, U.S.
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 1225, the Court Reporter Fair Labor Amendments of
1995, as ordered reported by the Committee on Economic and
Educational Opportunities on July 20, 1995. CBO estimates that
enactment of H.R. 1225 would have no effect on the federal
budget. Enactment of the bill could affect the budgets of state
and local governments by limiting the instances in which they
must provide compensation to court reporters for overtime work.
Because enactment of H.R. 1225 would not affect direct spending
or receipts of the federal government, pay-as-you-go procedures
would not apply.
H.R. 1225 would amend the Fair Labor Standards Act to
limit, under certain conditions, the overtime compensation that
courts must pay to court reporters. Specifically, the bill
would allow that if a court reporter is paid at a per-page rate
for preparing transcripts for parties other than the courts
(such as litigants or lawyers), the hours spent preparing these
transcripts would not be considered as hours spent working for
the courts. Under current law, state and local courts are
required to pay court reporters one-and-one half times their
regular rate of pay for all hours worked overtime, even if that
time is spent working for other parties. Federal courts are not
covered by this provision.
Most state and local courts currently are not incurring
overtime costs in these situations because the Department of
Labor is not enforcing the overtime provisions. These courts
could be liable for such overtime costs, however, if a suit
were brought against them. Some courts are paying the overtime
compensation, but are limiting costs by restricting the court
reporters' abilities to sell their transcripts at per-page
rates. If courts are allowed to reduce the number of overtime
hours they are required to pay, the bill could prevent the
courts from being held liable for overtime pay in the future.
CBO has no basis for judging the extent to which future suits
on this issue would be forthcoming, and therefore we cannot
estimate the extent to which state and local funds that would
have been spent on overtime compensation would be saved as a
result of this bill.
Because federal courts are not covered by the provision
that this legislation seeks to change, enactment of this bill
would not affect federal spending.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Christina
Hawley.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3 of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
SECTION 7 OF THE FAIR LABOR STANDARDS ACT OF 1938
maximum hours
Sec. 7. (a) * * *
* * * * * * *
(o)(1) * * *
* * * * * * *
(6) The hours an employee of a public agency performs court
reporting transcript preparation duties shall not be considered
as hours worked for the purposes of subsection (a) if--
(A) such employee is paid at a per-page rate which is
not less than--
(i) the maximum rate established by State law
or local ordinance for the jurisdiction of such
public agency,
(ii) the maximum rate otherwise established
by a judicial or administrative officer and in
effect on July 1, 1995, or
(iii) the rate freely negotiated between the
employee and the party requesting the
transcript, other than the judge who presided
over the proceedings being transcribed, and
(B) the hours spent performing such duties are
outside of the hours such employee performs other work
(including hours for which the agency requires the
employee's attendance) pursuant to the employment
relationship with such public agency.
For purposes of this section, the amount paid such employee
in accordance with subparagraph (A) for the performance of
court reporting transcript preparation duties, shall not be
considered in the calculation of the regular rate at which such
employee is employed.
[(6)] (7) For purposes of this subsection--
(A) the term ``overtime compensation'' means the
compensation required by subsection (a), and
(B) the terms ``compensatory time'' and
``compensatory time off'' mean hours during which an
employee is not working, which are not counted as hours
worked during the applicable workweek or other work
period for purposes of overtime compensation, and for
which the employee is compensated at the employee's
regular rate.
* * * * * * *