Minimum Wage, Overtime Laws Due For Reform: Republicans
In a Congressional hearing Thursday, Republican lawmakers indicated a willingness to reform the Fair Labor Standards Act (FLSA), the bedrock Depression-era statute that established a minimum wage and time-and-a-half overtime for American workers.
Although he proffered no prescription for reform, Rep. Tim Walberg (R-Mich.), who chairs the House education and workforce committee, called the hearing to explore whether the fair labor law is "meeting the needs of the 21st century." Invited to testify by the Republican majority were two business executives and a lawyer who said the statute has become too onerous for contemporary employers, leading to an explosion of costly lawsuits brought by workers.
"The law was a significant expansion of the government’s authority when it was created in the midst of the Great Depression," Walberg said. "Good intentions can often lead to unintended consequences. It is hard to imagine a law intended for the workforce known to Henry Ford can serve the needs of a workplace shaped by the innovations of Bill Gates."
At issue is who's exempt and who's non-exempt from the fair labor law. Non-exempt employees are protected by its provisions, which guarantee at least the federal minimum wage and time-and-a-half for any hours worked in excess of 40. Exempt employees, most of whom are salaried and tend to work in white-collar capacities, are not protected by the law and can be asked to work overtime without compensation.
Non-exempt employees who feel they've been cheated out of pay can sue their employers. Companies large and small -- from Wal-Mart to small family restaurants -- often wind up in court, usually settling the minimum wage and overtime claims for a few hundred or a few thousand dollars. But Republican witnesses pointed to large-scale, million-dollar settlements as an indication that lawyers and workers are taking undue advantage of the law.
J. Randall McDonald, a senior vice president at IBM, said the statute needs updating, suggesting that some workers who are currently covered by the law shouldn’t be. "How do you define some of the work now being done that the law didn’t anticipate?" he asked. "Our ability to use technology has dramatically changed the workplace."
Aaron Albright, a spokesman for Democratic committee members, said Republicans are essentially trying to "roll back" the statute so that fewer workers can receive overtime pay.
"What's the purpose for the tinkering? It's basically to reclassify workers so that they're not eligible for overtime or minimum wage," Albright told HuffPost. "The proposition is workers are making too much money, and that's probably a surprise to workers who haven’t seen a raise in quite a while. This is about large corporations increasing their bottom lines."
In a telling exchange at the hearing, Rep. Dennis Kucinich (D-Ohio) asked each of the witnesses the same question: Should the federal minimum wage of $7.25 be raised, lowered, or kept the same?
"I don't understand the nature of the question," McDonald responded. The two other Republican witnesses also dodged the question.
Only Judy Conti, the federal advocacy director for the National Employment Law Project, gave Kucinich a firm answer, saying the minimum wage is due for a raise.
"I want to thank our witnesses for being here," Kucinich said to those sitting alongside Conti. "Your presence here proves what's wrong" with this country.
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First Posted: 07/14/11 01:53 PM ET Updated: 09/13/11 06:12 AM ET