[House Report 104-592]
[From the U.S. Government Publishing Office]
104th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 104-592
_______________________________________________________________________
HOUSEPARENTS
_______
May 23, 1996.--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
together with
MINORITY VIEWS
[To accompany H.R. 2531]
[Including cost estimate of the Congressional Budget Office]
The Committee on Economic and Educational Opportunities, to
whom was referred the bill (H.R. 2531) to amend the Fair Labor
Standards Act of 1938 to clarify the exemption for houseparents
from the minimum wage and maximum hours requirements of that
Act, 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. REFERENCE.
Whenever in this Act an amendment is expressed in terms of an
amendment to a section or other provision, the reference shall be
considered made to a section or other provision of the Fair Labor
Standards Act of 1938 (29 U.S.C. 201 et seq.).
SEC. 2. DEFINITION OF HOUSEPARENT.
Section 3 (29 U.S.C. 203) is amended by adding at the end thereof
the following:
``(y) `Houseparent' means any person employed by a private
nonprofit institution as a child-care worker, either as a member of a
married couple or as a single person (1) to serve as a substitute
parent for children who do not live with their own families, and (2) to
reside in a family like setting with such children.''.
SEC. 3. MINIMUM WAGE AND MAXIMUM HOURS EXEMPTION FOR HOUSEPARENTS.
Section 13(a) (29 U.S.C. 213(a)) is amended by striking the period
at the end of paragraph (16) and inserting ``; or'' and by adding at
the end thereof the following:
``(17) any employee employed by a private nonprofit
institution to serve as a houseparent for abused, neglected,
delinquent, orphaned, homeless, or emotionally impaired
children, when--
``(A) such children's primary residence is in the
residential facilities of such institution,
``(B) such houseparent resides with such children in
the residential facilities of such institution for at
least 72 hours a week, and
``(C) such houseparent receives, without cost, board
and lodging from such institution and is compensated,
on a cash basis, at an annual rate of not less than
$8,000.''.
SEC. 4. CONFORMING AMENDMENT.
Subsection (b) of section 13 (29 U.S.C. 213) is amended by striking
out paragraph (24).
Purpose
The purpose of H.R. 2531 is to exempt qualifying
houseparents from the minimum wage and maximum hours
requirements of the Fair Labor Standards Act of 1938.
Committee Action
H.R. 2531 was introduced by Representative Tim Hutchinson
on October 25, 1995, with 27 original cosponsors. The
Subcommittee on Workforce Protections held a hearing on H.R.
2531 on November 1, 1995. Witnesses testified about the need
for legislative changes to the Fair Labor Standards Act to
exempt certain qualified houseparents from the minimum wage and
overtime protections of the Act. Father Val Peter, the
Executive Director of Father Flanagan's Boys' Home, and Mr. W.
Thomas Siler, Jr., Attorney at Law, Pelps Dunbar, Jackson,
Mississippi, testified in favor of changes to the Fair Labor
Standards Act. There were no witnesses testifying in opposition
to such a change.
On December 13, 1995, the Subcommittee on Workforce
Protections approved H.R. 2531, as amended, by voice vote and,
ordered the bill favorably reported to the Full Committee. On
March 21, 1996, the Committee on Economic and Educational
Opportunities ordered the bill favorably reported with an
Amendment in the Nature of a Substitute by a vote of 21 to 15.
Explanation of Amendments
The Amendment in the Nature of a Substitute adopted in
Committee is explained in this report.
Committee Statement and Views
background
Many private, nonprofit, charitable institutions which
serve neglected or abused children employ individuals as
houseparents or substitute parents, on a twenty-four hour
basis. The institutions maintain a family-based environment by
providing continuous, consistent care to children from homes
broken by divorce, desertion, death, and separation. Staff who
function as houseparents live, eat, sleep and enjoy recreation
in the home with the children under their care. However, as a
result of the application of the Fair Labor Standards Act
(FLSA) to houseparents, a number of these institutions have
been forced to change the method in which they provide care to
children who reside in the homes.
The FLSA is the primary federal statute regulating the
wages and hours of work. (29 U.S.C. Sec. 201-209). The Act
covers employees who are (1) engaged in interstate commerce, or
(2) engaged in the production of goods for travel of interstate
commerce, or (3) employed in an enterprise engaged in commerce
or the production of goods for commerce. For covered or non-
exempt employees, the FLSA sets a minimum wage of $4.25 per
hour and a 40-hour per week overtime standard. The overtime
requirement stipulates the payment of time-and-one-half wages
for all hours worked in excess of 40 within a seven day period.
In addition, the FLSA requires employers to maintain records
reflecting employees' hours of work and wages received.
The 1966 amendments to section 3(r) and 3(s) of the FLSA
brought residential institutions which have on-site educational
facilities under the minimum wage and overtime requirements.
These provisions covered enterprises:
* * * engaged in the operation of a hospital, an
institution primarily engaged in the care of the sick,
the aged, the mentally ill or defective who reside on
the premises of such institution, a school for mentally
or physically handicapped or gifted children, a
preschool; elementary or secondary school, or an
institution of higher education (regardless of whether
or not such hospital, institution, or school is public
or private or operated for profit or not for profit) *
* * (29 U.S.C. Sec. 213(24)(A) and (B)).
The FLSA Amendments of 1974 excluded from overtime certain
employees of institutions which operate residential schools
serving children and youth. Section 13(b)(24) exempts:
any employee who is employed with his spouse by a
nonprofit educational institution to serve as the
parents of children--
(A) who are orphans or one of whose natural parents
is deceased, or (B) who are enrolled in such
institution and reside in residential facilities of the
institution, while such children are in residence at
such institution, if such employee and his spouse
reside in such facilities, receive, without cost, board
and lodging from such institution, and are together
compensated, on a cash basis, at an annual rate of not
less than $10,000; (29 U.S.C. Sec. 213(13)(b)(24)).
In reality, there are likely to be few individuals, if any,
who are able to qualify for this exemption. The language fails
to recognize the types of individuals who are employed today as
houseparents. There are many single individuals, as well as
married couples, who ably serve as houseparents. An individual
who serves as the substitute parent of children who are from
broken homes where both parents are living, but no longer
together, would not qualify for the exemption because only
orphans or children with at least one parent deceased will meet
the current law requirement. Furthermore, many houseparents do
not qualify for the exemption because they are employed by
institutions which only provide residential care, not
educational programs, for abused or neglected children.
Private, charitable, nonprofits providing residential care
without educational programs for abused or neglected children
may not be covered by the FLSA, provided that the institution
is not operated in conjunction with a hospital, covered
institution or school within the meaning of sections 3(r) and
3(s) of the Act. However, the Department of Labor has
interpreted the FLSA as covering some employees on an
``individual'' basis, for example, employees who handle goods
or materials which have been moved in commerce or produced for
commerce (U.S. Department of Labor, Wage and Hour Division,
Field Operations Handbook, 12g18, Institutions for neglected
and dependent children).
The Committee strongly believes that the success of these
programs for abused or neglected children directly depends upon
the institution's ability to provide a family-based home
environment with continuous, consistent care by substitute
parents. The Committee is aware that many of these institutions
face tremendous uncertainty as to whether or not staff
functioning as houseparents are covered by the FLSA.
Furthermore, the Committee notes that the absence of clearly-
defined guidelines from the Department of Labor concerning the
treatment of houseparents under the FLSA has resulted in
confusion and costly litigation for some private, nonprofit
institutions providing care for children.
As Father Val Peter testified before the Subcommittee on
Workforce Protections:
* * * the interpretation of the law through regulation
and the Department of Labor (DOL) is confusing.
Programs that were thought to be in compliance with the
law have been found in violation and required to pay
large sums in back pay--sometimes to pay people while
they were asleep or taking children on a fully paid
vacation.
Additionally, Mr. Siler testified before the Subcommittee
on Workforce Protections that he had been involved in
situations:
* * * where the Department of Labor looked at such
matters as whether houseparents answered long distance
telephone calls, opened mail or took children on trips
that crossed state lines, to determine whether the
houseparents were entitled to minimum wage or overtime
pay. As a result of this type of investigation, even
small children's homes which are not operated in
conjunction with a hospital, school or other covered
institution will be required to meet minimum wage and
overtime requirements for houseparents.
The Committee notes that a family-based environment is a
mission which has been mandated by federal law. Public Law 96-
272, the Adoption Assistance and Child Welfare Act of 1980,
stipulates that children in such homes should be served in a
setting which is most closely identified with a family setting.
Yet, children's homes attempting to provide a family-based
setting using the houseparent model are then vulnerable to
potentially enormous financial liability in defending
themselves against employee lawsuits and Department of Labor
actions. The present treatment of houseparents under the FLSA
is an impediment to charitable, nonprofit organizations which
attempt to provide necessary services in the proper environment
for children who are greatly in need of this type of care.
In order to comply with the FLSA, employers must maintain
adequate records of employees, hours worked, and the wages
received. The Committee recognizes the paperwork burdens,
particularly on the smaller children's homes, which are
inherently associated with keeping track of the hours worked by
houseparents. Furthermore, the Committee acknowledges the
difficulty that such institutions may have in determining the
hours which a houseparent is considered to be working and thus
eligible for compensation. Parenting involves such things as
sitting with a sick child during the night or responding to a
child who has had a nightmare. If each hour must be accounted
for, it would be nearly impossible to delineate in statute or
regulation all of the activities and circumstances which would
be considered compensable work time.
The Committee supports providing a specific exemption for
qualifying houseparents from the minimum wage and overtime
requirements of the FLSA. Without this exemption, many of these
homes may be forced to abandon the use of the houseparent model
in attempting to create a stable, family-based environment for
the children of the home. In its place, the homes may be forced
to, and some already do, implement a shift model system where
individuals work eight-hour shifts, essentially supervising the
children. As Father Val Peter testified:
If the court rules in favor of the houseparents, Boys
Town would be forced to stop using the family-based
model and depending upon the damages in this case and
in subsequent cases that would probably ensue, we might
have to close our doors.
By continuously rotating the staff who supervise the
children, it is impossible to fulfill the mission of these
homes; that is, to create a family-based environment for the
children. In effect, the children could have a different set of
substitute parents every eight hours. The Committee believes
that a shift work system would be detrimental to the
effectiveness of such programs.
legislation
H.R. 2531 exempts from the FLSA's minimum wage and overtime
requirements those individuals employed as houseparents who
meet specific requirements. The bill adds a definition of a
houseparent to section 3 (Definitions) of the FLSA. A
``houseparent'' is defined as any person employed by a private,
nonprofit institution as a child care worker, either as a
member of a married couple or as a single person to serve as a
substitute parent for children who do not live with their own
families, and to reside in a family-based setting with the
children.
H.R. 2531 amends section 13(a) of the FLSA to exempt any
employee employed by a private, nonprofit institution to serve
as a houseparent for abused, neglected, delinquent, orphaned,
homeless, or emotionally impaired children, when: (1) the
children's primary residence is in the residential facilities
of the institution; (2) the houseparent resides with the
children at the home for a minimum of 72 hours a week; and (3)
the houseparent receives, without cost, board and lodging and
cash wages at an annual basis of not less than $8,000. H.R.
2531 deletes the exemption for houseparents in current law
under section 13(b)(24).
The Committee recognizes that one of the most troubling
issues for private, nonprofit homes under the FLSA today is the
tremendous uncertainty in determining the coverage of
houseparents under the Act. H.R. 2531 would clarify the FLSA's
treatment of houseparents who are employed at private,
nonprofit institutions providing care for abused and neglected
children. The legislation would enable children's homes to
continue providing a family-based environment using the
houseparent model. This will foster a stable, home-like
atmosphere and encourage the kinds of personal relationships
which are so vital to a child's development. The Committee
believes that H.R. 2531 will enable those homes which use the
houseparent model to set up pay systems which meet the
requirements of the FLSA. The Committee does not believe that
such homes should have to spend precious time and limited
resources defending themselves in investigations of this
nature.
summary
H.R. 2531, as amended, would exempt individuals employed by
private, nonprofit institutions as houseparents from the
minimum wage and overtime provisions of the Fair Labor
Standards Act provided that the individual (1) receives room
and board, without cost, (2) is compensated on an annual basis
of not less than $8,000 and (3) resides in the home with the
children for a minimum of 72 hours per week.
Section-by-Section Analysis
Section 1
Specifies that whenever an amendment is expressed in terms
of an amendment to a section or other provision, the reference
shall be considered to be made to a section or other provision
of the Fair Labor Standards Act.
Section 2
A ``houseparent'' is defined as any person employed by a
private, nonprofit institution as a child care worker, either
as a member of a married couple or as a single person (1) to
serve as a substitute parent for children who do not live with
their own families, and (2) to reside in a family like setting
with the children.
Section 3
This section would exempt from the minimum wage and maximum
hours requirements of the Fair Labor Standards Act any employee
employed by a private, nonprofit institution to serve as a
houseparent for abused, neglected, delinquent, orphaned,
homeless, or emotionally impaired children, when (1) the
children's primary residence is in the residential facilities
of the private, nonprofit institution; (2) the houseparent
resides with the children in the residential facilities of the
institution for a minimum of 72 hours per week; and (3) the
houseparent receives, without cost, board and lodging from the
institution and is compensated, on a cash basis, at an annual
rate of not less than $8,000.
Section 4
This section would delete section 13(b)(24) of the Fair
Labor Standards Act which provides an exemption from the
minimum wage requirements for any employee who is employed with
his spouse by a nonprofit educational institution to serve as
the parents of children who are (1) orphans or one of whose
natural parents is deceased, or (2) who are enrolled in the
institution and reside in the residential facilities of the
institution, if the employee and his spouse reside in the
facilities, receive without cost, board and lodging from the
institution, and are together compensated at a minimum annual
rate of $10,000.
Oversight Findings 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. 2531 will have no significant
inflationary impact on prices and costs in the operation of the
national economy. It is the judgment of the Committee that the
inflationary impact of this legislation as a component of the
federal budget is negligible.
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. 2531.
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. 2531. 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 would exempt qualifying houseparents from the
minimum wage and maximum hours requirements of the Fair Labor
Standards Act of 1938. The bill does not prohibit legislative
branch employees from otherwise being effected by these
amendments.
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. The Committee also received a
letter regarding unfunded mandates from the Director of the
Congressional Budget Office. See infra.
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. 2531 from the Director of the Congressional Budget
Office:
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 1, 1996.
Hon. William F. Goodling,
Chairman, Committee on Economic and Educational Opportunities, House of
Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 2531, as ordered reported by the Committee on
Economic and Educational Opportunities on March 21, 1996, and
has determined that the bill would have no direct effect on the
federal budget. The bill would amend the Fair Labor Standards
Act by exempting houseparents from the minimum wage and maximum
hours requirements of the act.
A houseparent is defined by the bill as any person employed
by a private, nonprofit institution as a child-care worker to
serve as a substitute parent in a family-like setting with
abused, neglected, delinquent, orphaned, homeless, or
emotionally impaired children. In order to be exempt from the
minimum wage and maximum hour requirements of the Fair Labor
Standards Act, the houseparent must reside in the institution
for at least 72 hours per week, receive free board and lodging,
and be compensated at least $8000 on an annual basis.
H.R. 2531 would affect only private nonprofit employers.
The bill contains no intergovernmental or private sector
mandates as defined in Public Law 104-4, and would impose no
direct costs on state, local, or tribal governments.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Christi
Hawley.
Sincerely,
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 italic, existing law in which no change is
proposed is shown in roman):
FAIR LABOR STANDARDS ACT OF 1938
* * * * * * *
definitions
Sec. 3. As used in this Act--
(a) ``Person'' means an individual, partnership,
association, corporation, business trust, legal representative,
or any organized group of persons.
* * * * * * *
(y) ``Houseparent'' means any person employed by a private
nonprofit institution as a child-care worker, either as a
member of a married couple or as a single person (1) to serve
as a substitute parent for children who do not live with their
own families, and (2) to reside in a family like setting with
such children.
* * * * * * *
exemptions
Sec. 13. (a) The provisions of sections 6 (except section
6(d) in the case of paragraph (1) of this subsection) and 7
shall not apply with respect to--
(1) * * *
* * * * * * *
(16) a criminal investigator who is paid availability
pay under section 5545a of title 5, United States
Code[.]; or
(17) any employee employed by a private nonprofit
institution to serve as a houseparent for abused,
neglected, delinquent, orphaned, homeless, or
emotionally impaired children, when--
(A) such children's primary residence is in
the residential facilities of such institution,
(B) such houseparent resides with such
children in the residential facilities of such
institution for at least 72 hours a week, and
(C) such houseparent receives, without cost,
board and lodging from such institution and is
compensated, on a cash basis, at an annual rate
of not less than $8,000.
(b) The provisions of section 7 shall not apply with
respect to--
(1) * * *
* * * * * * *
[(24) any employee who is employed with his spouse by
a nonprofit educational institution to serve as the
parents of children--
[(A) who are orphans or one of whose natural
parents is deceased, or
[(B) who are enrolled in such institution and
reside in residential facilities of the
institution.
while such children are in residence at such
institution, if such employee an his spouse reside in
such facilities, receive, without cost, board and
lodging from such institution, and are together
compensated, on a cash basis, at an annual rate of not
less than $10,000; or]
* * * * * * *
MINORITY VIEWS
H.R. 2531 amends the Fair Labor Standards Act of 1938
(FLSA) for the purpose of exempting a class of employees,
houseparents, from both the minimum wage and the maximum hours
requirements of that Act. This legislation legalizes the
exploitation of workers who are changed with one of the most
vital duties an individual can undertake, that of raising
children. By the terms of the legislation, those employed by
nonprofit child care institutions to act as surrogate parents
for the children who reside in such institutions may be
required to work an unlimited number of hours, for an unlimited
number of days, for no more compensation than $8,000 a year,
plus room and board.
The proponents of this legislation claim that it is
intended to protect the children for whom houseparents care. If
our concern is truly for the children, we should be seeking to
ensure that those who care for those children are adequately
and fairly compensated. This legislation does the exact
opposite. Under it, as long as houseparents employed by
nonprofit child care institutions are provided room and board,
are on the premises of the institution for 72 hours, and are
paid $8,000 a year, those employees are entitled to neither
minimum wages nor overtime.
Testimony supporting this legislation described its intent
as follows:
What I want to make clear is that we are not trying
to shirk our responsibilities to our employees in terms
of a fair compensation package for their efforts.
Instead, we are trying to clarify an already existing
provision to exempt houseparents from the FLSA overtime
provision and remove them from minimum wage and maximum
hours requirements so that overtime provisions cannot
apply.\1\
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\1\ Prepared Statement of Father Val Peter, JCD, STD, Executive
Director, Father Flanagan's Boys' Home, on behalf of the National
Association of Homes and Services for Children. Oversight hearing on
the Fair Labor Standards Act, H.R. 2391, H.R. 1227 and H.R. 2531;
Subcommittee on Workplace Protections, November 1, 1995; transcript at
pages 5-6.
Were that, in fact, the sole effect of this legislation,
many of us could support it. Regrettably, it is not.
As part of the 1974 amendments to the FLSA, section 13(b)
of the law was amended ``to provide an overtime exemption for
(married) couples who serve as houseparents of children who was
institutionalized in a nonprofit education institution by
reason of being orphaned or having one deceased parent. To be
covered by the overtime exemption, such couples must receive
cash wages of not less than $10,000 annually, and reside on the
premises of that institution and receive their board and
lodging without cost.'' \2\
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\2\ Report No. 93-913, Fair Labor Standards Amendments of 1974 [to
accompany H.R. 12435], House of Representatives, 93d Congress, 2d
Session, March 15, 1974, at page 48.
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The current law exemption is limited to overtime, and
houseparents are protected by the minimum wage requirements of
the FLSA. Contrary to the witness' statement, it is not
necessary to exempt houseparents from the minimum wage
provisions ``so that overtime provisions cannot apply.''
The current exemption from overtime was deemed to be
necessary to facilitate the creation of a family-like
atmosphere in child care institutions. Houseparents are to
serve as surrogate parents for the children in their charge. As
such, houseparents serve as the primary caregiver for those
children and are expected to bond with them. It was anticipated
that houseparents would be on call and may often by employed
for more than 40 hours a week. Since it may otherwise to
cheaper to hire another employee than to pay overtime to a
houseparent, and since doing so would disrupt the bonding
process, houseparents were exempted from the overtime
requirements of the FLSA to ensure that the law did not serve
to discourage the operators of child care institutions from
employing couples to act as surrogate parents.
We do not object to clarifying and even broadening the
existing overtime exemption. There are aspects of the 1974
amendment that, in restrospect, merit reconsideration. First,
because the 1974 amendment failed to index the minimum annual
cash earnings houseparents must receive to be exempt from
overtime, the protections afforded workers by the amendment
have been seriously eroded.\3\ Second, the 1974 amendment is
limited in its application only to those who care for children
``who are institutionalized * * * by reason of being orphaned
or having one deceased parent.'' Arguably, if an exemption from
overtime for those who care for orphans is merited, such an
exemption is also merited for those who care for children who
have been abandoned by parents who are still living.
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\3\ This shortcoming is discussed in more detail below.
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In fact, we Democrats unanimously supported an amendment
offered by Representative Andrews (D-NJ), which proposed to
expand the exemption in a reasonable fashion, while retaining
essential minimum wage protections and providing other
provisions to help ensure that houseparents are fairly
compensated for their work. Unfortunately, as is so often the
case in our Committee this Congress, our Republican allies on
the Committee uniformly opposed our compromise.
H.R. 2531 provides a blanket exemption from overtime and
from the minimum wage for ``houseparents'' who care for any
``abused, neglected, delinquent, orphaned, homeless, or
emotionally impaired child,'' \4\ regardless of how physically
or emotionally impaired that child may be. In this regard, we
are concerned that the legislation is too broadly drafted. We
can agree as a general matter that institutions should seek to
provide a family-like atmosphere for children. We also agree
that it is generally desirable for one or two employees to
assume primary care-giving responsibilities for individual or
small groups of children. We further agree that an exemption
from the overtime provisions of the FLSA may be merited in such
instances.
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\4\ H.R. 2531, Sec. 3. Minimum Wage and Maximum Hours Exemption for
Houseparents.
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Elimination of the overtime and minimum wage requirements,
however, provides an unquestionable economic incentive for an
institution to hire fewer employees and to work them for longer
hours. In circumstances where a child is severely emotionally
or physically impaired, the burdens inherent in caring for such
a child are such that, for the child's sake as well as the
employee's, an employee's duties should not extend beyond eight
hours a day. Even if one's sole concern is for the welfare of
children and one is wholly indifferent to the rights and
welfare of workers, eliminating the overtime requirement for
workers who care for severely impaired children is bad policy.
Regrettably, there is no evidence to date to indicate whether
the sponsor or the proponents of H.R. 2531 intend the
legislation to apply in such circumstances; nor does the
definition of ``houseparent'' provided in the legislation
indicate clearly whether this legislation is intended to apply
to those who care for severely impaired children.\5\
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\5\ H.R. 2531 defines ``houseparent'' to mean ``any person employed
by a private nonprofit institution as a child-care worker * * * (1) to
serve as a substitute parent for children who do not live with their
families.'' Therefore, in our view, children who are so severely
mentally or physically impaired that their parents cannot physically
care for them and must therefore be institutionalized, but whose
parents do not otherwise surrender or abdicate their parental
responsibilities, do not fall within purview of the legislation because
it was not the intent of the parents to transfer parental
responsibilities to the institution. However, the language of H.R. 2531
is so imprecise as to invite litigation on this issue.
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Another provision of the 1974 amendment that may merit
reconsideration is the limitation of the overtime exemption to
married couples. The justification for the exemption from
overtime is that children's homes should strive to provide a
family-like atmosphere for the children residing there.
Encouraging institutions to hire married couples as
houseparents, by limiting the application of the overtime
exemption for houseparents only to married couples, clearly
promotes the creation of a family-like atmosphere. No testimony
was offered in the single hearing on this bill to justify
eliminating the requirement that the exemption extend only to
married couples. Indeed, testimony on H.R. 2531 spoke of a
``specially trained married couple who have Tina and six other
girls live with them in their Boys Town home.'' \6\ Apparently,
however, the sponsor of this legislation has concluded that the
presence of a married couple is not essential to the creation
of a family like atmosphere.
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\6\ Prepared statement of Father Val Peter, at page 9.
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We hope that operators of children's homes would continue
to seek to hire married couples as surrogate parents. However,
in making their employment decisions, operators should
ultimately be guided by the determination of who they believe
will be able to provide the best care for the children. By
limiting the overtime exemption to married couples, current law
provides an economic incentive for operators to make employment
decisions not on the basis of who will provide the best care,
but on the basis of who is exempt from overtime. The fact of
marriage, as important as it is, is not an absolute guarantee
that a couple is necessarily best qualified to provide care for
children. While it is, at best, extremely discomforting to
eliminate the marriage requirement in the absence of any
evidence in the record that the requirement is an unreasonable
burden, there is at least a theoretical basis for reconsidering
the provision.
Current law exempts houseparents from the maximum hours
requirements of FLSA on the condition that the houseparents
reside in facilities in which the children reside. Considering
that the justification for exempting houseparents from overtime
is to facilitate the creation of a family-like atmosphere, such
a requirement is both practical and reasonable. H.R. 2531
requires houseparents ``to reside in a family like setting with
such children,'' \7\ but strangely goes on to specify that the
houseparent need only reside ``in the residential facilities of
such institution for at least 72 hours a week.'' \8\
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\7\ H.R. 2531, Sec. 2. Definition of Houseparent.
\8\ H.R. 2531, Sec. 3. Minimum Wage and Maximum Hours Exemption for
Houseparents.
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If the intent of this legislation to promote the creation
of a family-like atmosphere, why does the legislation require
the houseparent to be in residence for only 72 hours? H.R. 2531
does not require that a houseparent be ``on duty'' for 72 hours
a week or even that a houseparent be ``on call'' for 72 hours a
week. The requirement is only that the houseparent be living on
the grounds for 72 hours a week, regardless of how little time
is spent with a child during that period. Seventy-two hours is
only three days. Even assuming that a parent spends eight hours
a day, seven days a week outside the home, that parent still
spends more than 110 hours a week in residence with his or her
children. Most parents spend considerably more time than that.
The purpose of the 72-hour requirement would appear to be
to expand the existing exemption and apply it to workers who do
not act as surrogate parents, but rather serve as relief
workers for those who truly provide primary care for the
children. Are we really trying to encourage a family-like
atmosphere when the exempted employee is permitted to spend
more time away from children than with them? Or are we simply
trying to give employers a break at the expense of their
workers?
Under section 3 of H.R. 2531, a houseparent must receive
board and lodging from the institution (without cost) and must
be compensated on a cash basis at an annual rate of not less
than $8,000 a year, per individual, in order to be exempt for
the minimum wage and overtime provisions of the FLSA. In 1974,
the Congress required that, to be exempt from overtime,
houseparents must receive board and lodging (without cost) and
must be compensated in cash at an annual rate of not less than
$10,000 a year, per couple. Proponents of H.R. 2531 have been
quick to point out that the legislation raises the pay of
houseparents by $3,000 per individual. However, $10,000 in 1974
was equivalent to $31,400 today. In effect, H.R. 2531 proposes
a 50-percent reduction in the compensation of houseparents as
compared to what the Congress deemed appropriate in 1974. This
kind of disparity is driving increasing numbers of Americans
out of the middle class. Further, by failing to index the
minimum annual earnings of houseparents, this legislation
invites even further erosion in their living standards.
More importantly, unlike current law, H.R. 2531 seeks to
exempt houseparents from the minimum wage provisions of the
FLSA as well as its maximum hours provisions. For $8,000 a year
and room and board, the houseparent can be required to work as
many hours in the day, as many days in the week, and as many
weeks in a year as it is humanly possible. An employee who was
scheduled to have the weekend off can be required to take
children on an outing that weekend for no additional
compensation, whatsoever. Even though the burdens on the
employee in terms of caring for the welfare of the children may
be increased, and even though the employee is required to give
up his or her own time, under H.R. 2531 the employee is not
entitled to any additional compensation. No matter how many
hours or days the employee is required to work, the employer is
not required to pay a houseparent a penny more than $8,000
dollars a year (plus room and board).
It is ironic to us, in terms of dollars and cents, just how
little value the Republican Majority places on ``parenting.''
At a time when the minimum wage is approaching its lowest value
in 40 years, a full time minimum wage earner would still earn
about $1,000 more in a year than a houseparent. The effect of
this legislation is to enact a law that requires the employer
to pay higher wages to all other workers (e.g., groundskeepers,
custodial workers, and housekeepers) than to the houseparent
who is principally charged with the welfare of the children of
the institution. The paucity of the houseparent's compensation
demonstrates low regard for those entrusted with the care of
children.
Finally, we are quite disappointed that the Republican
Majority deliberately considers a bill that removes the
protection of the minimum wage for an entire category of
workers--in this case houseparents--while steadfastly refusing
even to schedule a hearing on increasing the minimum wage for
millions of hardworking Americans.
In an effort to address that glaring distortion, our
Ranking Member, Representative Clay (D-MO), offered an
amendment to stay the applicability of the bill's houseparents
exemption until such time as the minimum wage for all workers
exceeds $5.14 an hour. By denying houseparents the minimum wage
protections of the FLSA, the Republicans will leave them only
the salary protections afforded by the market. It is unfair to
expand exceptions to minimum wage protections--exceptions that
will further lower wages for whole classes of workers--while,
ignoring the eroding value of today's minimum wage.
William L. Clay.
Dale E. Kildee.
Donald M. Payne.
George Miller.
Gene Green.
Robert C. Scott.
Tim Roemer.
Patsy T. Mink.
Chaka Fattah.
Robert E. Andrews.
Eliot L. Engel.
Tom Sawyer.
Xavier Becerra.
Lynn Woolsey.
Jack Reed.
Major R. Owens.
Pat Williams.
Carlos Romero-Barcelo.