Wage-and-hour lawsuits have become a very real headache for employers of all sizes. Now a business group is asking the Department of Labor to retool the Fair Labor Standards Act to reflect today’s economic conditions.
The HR Policy Association (HRPA) recently sent a letter to Labor Secretary Hilda Solis, asking her to make some business-friendly changes to the 72-year-old law.
Some of the high points of the HRPA proposal:
- A provision assigning at least some legal responsibility to nonexempt employees to report their work time accurately. Today, employees sometimes claim months or years after-the-fact that their records reflect less time than they actually worked.
The absence of any FLSA “give” on this means that such claims are routinely credited by the courts and by Labor Department investigators, even in cases where an employer has in place a policy designed to produce accurate time records, and even when there is room to question whether an employee is being truthful.
Perhaps this could be addressed by, for example, creating a legal presumption that an employee’s time records are accurate, if (i) the employee records his or her own hours worked each workday and each workweek; (ii) the employee reviews those records each workweek and certifies that they are correct; and (iii) the employer maintains, enforces, and in practice actually observes a written policy both stating how hours worked are to be recorded and requiring that all hours worked be accurately and correctly recorded each workday and each workweek.
- An amendment stating that employees may be classified as exempt from the FLSA’s minimum-wage, overtime, and timekeeping requirements based upon the amount of their compensation alone. Even though the FLSA directs the DOL to establish the parameters for certain exemptions, historically the agency has taken the position that it is not authorized to adopt any exemption that is based solely upon an employee’s compensation level.
- A modification saying that many, most, or even all bonuses and incentive pay may be excluded from the “regular rate of pay” used to compute FLSA overtime compensation. At present, overtime must be calculated on most such payments, including even non-cash prizes or awards of various kinds. The added costs and complications this entails lead many employers to reduce the amounts they are prepared to offer or to forgo offering bonuses or incentives altogether.
- A section authorizing private-sector employers and employees to have an agreement or understanding permitting the use of compensatory time off in lieu of overtime pay. At the moment, this is not permitted under the FLSA for nonexempt employees in the private sector – most must receive overtime premium pay for all hours worked over 40 hours in a single workweek, even if they would rather have paid time off instead.
There have been some proposals in this area in recent years, but they have tended to be unduly complicated and/or too narrowly focused, and in some ways they threatened adverse consequences that outweighed the advantages. One possibility would be to appropriately modify the current version of the FLSA.