Legal

A Call for the DOL to Fix What is Wrong With Our Wage-and-Hour Laws

By Jon Hyman

Mar. 17, 2014

Last week, President Barack Obama called upon the Secretary of Labor to “modernize and streamline the existing overtime regulations.” According to the President, the “regulations regarding exemptions from the Act’s overtime requirement, particularly for executive, administrative, and professional employees (often referred to as ‘white collar’ exemptions) have not kept up with our modern economy. Because these regulations are outdated, millions of Americans lack the protections of overtime and even the right to the minimum wage.”

I could not agree more with the President that the Fair Labor Standards Act’s regulations are outdated. In fact, I’ve been calling for a streamlining of the FLSA for nearly three years:

Congress enacted the FLSA during the Great Depression to combat the sweatshops that had taken over our manufacturing sector. In the 70+ years that have passed, it has evolved, via a complex web of regulations and interpretations, into an anachronistic maze of rules that even the best-intentioned employer cannot hope to comply with. I would bet any employer in this country a free wage and hour audit that I can find an FLSA violation in your pay practices. A regulatory scheme that is impossible to meet does not make sense to keep alive. Instead, what employers and employees need is a more streamlined system to ensure that workers are paid a fair wage.

President Obama, Secretary of Labor Thomas Perez, and members of Congress, take this opportunity to do something historic and write wage-and-hour legislation and regulations that make sense for 2014. Don’t just increase the current salary level from the current $455 per week to qualify for the white-collar exemptions. That change will do nothing more than create new classes of non-exempt workers. Employers won’t start paying them overtime; instead they will figure out how to limit their hours worked to keep the wages the same.

Instead, use this Presidential call-to-action as an opportunity to examine the entire legislative and regulatory scheme that dictates how employees are paid in this country. You will not help guarantee workers a fair wage by putting a band-aid on a much bigger problem. The FLSA needs to be scrapped and rebuilt from scratch. Otherwise, you will leave in place in system that is confusing for employers to meet their compliance obligations, which, at the end of the day, is unfair for employers and employees.

Jon Hyman is a partner in the Employment & Labor practice at Wickens Herzer Panza. Contact Hyman at JHyman@Wickenslaw.com.

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