Earlier this month, the House of Representatives’ Sub-Committee on Workforce Protection convened a hearing entitled “The Fair Labor Standards Act: Is It Meeting the Needs of the Twenty-First Century Workplace?” A panel of speakers, representing Human Resources associations, management counsel and the employee advocacy group the National Employment Law Project, appeared before the Sub-Committee and responded to questions concerning, among other topics, the appropriateness of the current federal minimum wage of $7.25/hour, and whether the FLSA and its numerous arcane, difficult to understand provisions, create a barrier to compliance and economic growth. 

The three witnesses representing business interests all testified at length about the hardships associated with FLSA compliance, and the risks and costs of protracted and increasingly frequent litigation over FLSA issues. Judy Conti, a representative from the National Employment Law Project, an employee advocacy group, argued that absent the FLSA framework and private enforcement, employers would simply engage in a “race to the bottom” in an effort to further decrease labor costs. This viewpoint was also espoused by representative Dennis Kucinich (D-Ohio). Statements from Representative Kucinich during the hearing regarding the inappropriateness of curtailing the FLSA can be viewed here. 

While this Congressional investigation into the need for FLSA reform should be heartening to employers throughout the United States, the present landscape continues to pose baffling problems for employers in terms of compliance and litigation avoidance, to say nothing of state law obligations.  

Interestingly, certain contemplated USDOL Wage and Hour Division actions may further increase employer obligations under the FLSA and exposure to FLSA lawsuits. In its semi-annual regulatory agenda, the Division indicated that in the fall it will propose a rule addressing the applicability of the companionship minimum wage and overtime exemption to companionship services provided in a domestic setting. The Division also indicated that it is continuing to work on a disclosure rule that could require employers to expain to employees the basis for their exempt and/or contractor classification.