HR Leadership Column Overdue Vote on Flexibility

The Working Families Flexibility Act of 2013 passed the House of Representatives recently and now heads to the Senate. While its implementation wouldn't be without challenges, the bill has merit because it gives private-sector employers the long-overdue chance to provide workers with more flexible options.

Monday, May 13, 2013
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Many years ago, I was working quietly in my office at the Department of Labor when people started rushing into my office.

I was the deputy undersecretary of labor for employment standards at the time, and one of the agencies that reported to me was the wage and hour division. There was big news: The U.S. Supreme Court had issued a decision that dealt with the Fair Labor Standards Act -- the federal law governing minimum wage and overtime.

The decision was in a case called Garcia v. San Antonio Metropolitan Transit Authority. The big news:  The Supreme Court had reversed itself -- something that rarely happens -- and ruled that Congress had the power to apply the FLSA to employees of state and local governments under the Commerce Clause of the Constitution.   

This was a reversal of its decision nine years earlier in the National League of Cities v. Usery case, which held that Congress didn't have the power to apply the FLSA to employees of state and local government.

So what did this mean? 

With the stroke of a pen, the U.S. Supreme Court had ruled that states and local governments that thought they weren't covered by the FLSA -- and therefore didn't comply with the FLSA's overtime requirements -- were covered, and subject to the same overtime requirements that applied to the private sector. Public employers who were regularly paying hourly employees with compensatory time off -- comp time -- instead of cash were violating the law.

The kicker? There was no delay in the effective date of the court's decision.

State and local governments were frantic. While most had their own state or local-wage payment laws, most didn't have the same overtime requirements. Organized labor was also left in a difficult position -- many unions had negotiated contracts that allowed for a choice of paid overtime or time off - and these were negotiated because their members wanted flexibility.

While the phones started ringing at the White House and Department of Labor, they were ringing even more furiously on Capitol Hill, and very soon Congress enacted a "fix" to the Supreme Court's decision. (You see, there was a time when people compromised in Washington and actually enacted legislation.)

Working with Congress, the FLSA was amended to allow law-enforcement, fire-protection and emergency-response personnel to accrue up to 480 hours of comp time in lieu of overtime pay. All other state and local-government employees were allowed to accrue up to 240 hours. Employers were required to permit employees to use comp time on the date requested, unless doing so would "unduly disrupt" the operations of the agency.

Armed with this flexibility, state and local governments adjusted their practices and have been governed by the federal law for almost three decades. Simply stated, amending the FLSA and giving the public sector more flexibility made sense for both public employers and public employees, and it has worked effectively ever since.

Now, decades later, Congress may finally take action to extend similar flexibility to the private sector.  

It's long overdue.  

H.R. 1406, the Working Families Flexibility Act of 2013, was passed by the House of Representatives on May 8 and now heads to the Senate. The bill would permit private-sector employers to provide comp time to employees in lieu of overtime pay, at a rate of 1 1/2 hours off for every hour of overtime. If unionized, the employer would have to provide for this in the collective-bargaining agreement. If non-union, the employer would have to have an agreement with the employee. Employees could accrue up to 160 hours of comp time (significantly less than provided for in the public sector), and the employer would be required to pay employees at the end of the year for any unused comp time. Employees could always change their mind, and ask to be paid in cash for overtime.

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Critics of the bill argue that this is just another way for employers to abuse hourly workers; if employers support it, the bill must be bad.

Supporters point out that the bill would allow employers to give employees greater flexibility in managing their work life and family life, making it possible for employers to let employees be paid with time off in lieu of cash for the overtime they work.   

I'm sure that, if enacted, some employers will abuse the law -- there are always employers that play fast and loose with the law. They're the ones who are probably already violating their overtime obligations.

I also know that this law would place significant administrative burdens on employers who decide to offer the comp-time option to employees. It won't be without challenges, although I'm sure payroll-system providers will rise to the challenge and build tools to reduce the burden.

But I also know that the vast majority of employers are law-abiding organizations that value the contributions made by the people who work for them. Many would welcome the opportunity to offer employees greater flexibility, even if it means more administrative burden. These employers should be allowed to try.

Employees have been asking for more flexibility for years. Hopefully, Congress will help them out.  

Susan R. Meisinger, former president and CEO of the Society for Human Resource Management, is an author, speaker and consultant on human resource management. She is on the board of directors of the National Academy of Human Resources.

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