Modernization of Wage & Hour Laws

In order to promote employment growth and encourage flexible workplace policies, Congress and the administration should comprehensively reexamine the Fair Labor Standards Act, or FLSA, to bring it in line with 21st Century workplace realities.

The dual purpose of the FLSA is to provide a minimum wage and ensure that workers who are not otherwise exempt are paid time-and-a-half overtime for hours worked in excess of forty in a given workweek. Most employees who are exempt are "white collar" employees who must be paid a salary. Over time, however, these simple concepts have been translated into a series of vague and inconsistent rules and exceptions that are increasingly out of step with the modern workplace.

The FLSA was first written in 1938, and the regulations promulgated under it are outdated, pointing back to a mid-Twentieth Century industrial workplace, not today’s 21st Century Digital Age work environment. When the FLSA was first passed, Ford Motor Company’s production lines were busy churning out Model A’s with manual labor and relatively little automation. But with technology and robotics, today’s production workers use their minds and computers to an extent that was beyond the imagination of Depression era prognosticators. In fact, the entire concept of work is changing as the United States moves from a manufacturing to a service economy that is highly dependent on technology and increasingly mobile.

Because of its myriad anomalies, the FLSA impedes employers in achieving progress toward the kinds of flexible workplace policies that most everyone, including the Obama administration, is seeking to promote. These restrictions apply primarily to the 92.6 million wage and salary employees who are not exempt from the Act. Moreover, the enforcement trend being promoted by the Labor Department is bent on toughening rules that no longer fit today’s workplace rather than seeking to make them more relevant to contemporary needs.

That a 1938 wage and hour law no longer fits 21st century pay and scheduling practices should come as no surprise. The disconnect will continue to grow as more and more inflexibilities are imposed on employers and their employees and more precious public resources are wasted on enforcement efforts and adjudications where no abuses have occurred. While there may be disagreements over nuances, we believe it is possible for stakeholders to reach agreement on where that need lies, and the form protections must take in the modern workplace. It starts with a dialogue, which we are ready to commence with other stakeholders.