What Bills are Looming in Congress on the Wage and Hour Front?

Every year, bills are introduced in Congress to amend the FLSA.  Some bills, of course, have a better chance of passing, or even getting out of committee, than others.  Nonetheless, it’s interesting to see what kinds of issues surface on Capitol Hill since any one of these may get sufficient traction to become law someday.  Many of the proposals, if they become law, are much more significant than increasing the minimum wage.  As of September 30, 2009, the following FLSA-related bills are pending before the current congressional session:

1.         Compensatory Time

The Family Friendly Workplace Act (HR 933 by Rep. Cathy McMorris, R-Washington, with 17 co-sponsors) was introduced in February 2009 and would allow private sector employees to accrue up to 160 hours of compensatory time.  The bill was introduced last year as HR 6025, but never left committee.  Under the bill, unused accrued time would be cashed-out at the end of each calendar year.  The bill also would prohibit an employer from intimidating, threatening, or coercing an employee in order to: (A) interfere with the employee’s right to request or not to request compensatory time off in lieu of payment of monetary overtime compensation; or (B) require an employee to use such compensatory time.  Also under the bill liquidated damages would  be awarded in the event of a violation of these protections in the amount of the compensation rate for each hour of compensatory time accrued, plus an additional equal amount as liquidated damages, reduced for each hour of compensatory time used.  Hearings have not been scheduled.  Bills on this topic have been introduced in each session of Congress since at least the Clinton Administration, and it passed the House in 1977.

2.         Paid Vacation

The Paid Vacation Act of 2009 (HR 2564 by Rep. Alan Grayson, D-Florida, with 4 co-sponsors) was introduced in May 2009.  The bill seeks to amend the Fair Labor Standards Act to require employers of 100 or more employees to provide each employee with one week of paid vacation during each 12-month period.  Three years post-enactment,  this benefit would apply to employers of 50 or more employees, and employers with 100 or more employees would have to provide two weeks of paid vacation per year of employment. Employees will have to provide their employers with not less than 30 days’ prior notice of their intent to take paid vacation.

3.         Mininum Wage (tipped employees)

In May 2009, the Working for Adequate Gains for Employment in Services Act (or WAGES Act) (HR 2570 by Rep. Donna Edwards, D-Maryland, with 31 co-sponsors) was introduced.  The bill would amend the Fair Labor Standards Act by increasing the $2.13 base minimum wage for tipped employees as follows: (A) to at least $3.75 an hour beginning 90 days after the enactment of this Act; (B) to at least $5.00 an hour beginning July 1, 2011; and (C) beginning on July 1, 2012, and to be adjusted as necessary thereafter, to at least 70% of the miniumum wage in effect under the FLSA, but in no case less than $5.50 an hour.

4.         Minimum Wage

In June 2009, the Living American Wage (“LAW) Law of 2009 (HR 3041 by Rep. Al Green, D-Texas, with three co-sponsors) was introduced.  The bill would increase the federal minimum wage every four years, as determined by the Secretary of Labor, to be equal to “the minimum hourly wage sufficient for a person working for such wage 40 hours per week, 52 weeks per year, to earn an annual income in an amount that is 15 percent higher than the Federal poverty threshold for a family of 2, with one child under the age of 18, and living in the 48 contiguous States, as published for each such year by the Census Bureau.”  A similar bill was introduced during the two past congressional sessions, both of which never left committee.

5.         Statute of Limitations

In July 2009, the Wage Theft Protection Act (HR 3303 by Rep. George Miller, D-California, with two co-sponsors) was introduced.  The bill would amend the Portal-to-Portal Act to toll the statute of limitations while DOL investigations are pending.

6.         Time for Breastfeeding

The Breastfeeding Promotion Act of 2009 (S 1244 by Sen. Jeff Merkley, D-Oregon, with six cosponsors; and HR 2819 by Rep. Carolyn Maloney with 20 co-sponsors) was introduced in June 2009.  The bill would amend both Title VII of the Civil Rights Act of 1964 and the FLSA, as will as the Internal Revenue Code.  Title VII would be amended to include lactation (i.e., breastfeeding or the expressing of milk from the breast) as protected conduct.  Employers would also be allowed a business-related tax credit for 50% of their qualified breastfeeding promotion and support expenditures, up to $10,000 for any taxable year.  The FLSA would be amended to require employers with 50 or more employees to provide their breastfeeding employees with reasonable break time and private areas to express breast milk for their nursing children.

7.         Independent Contractors

The Taxpayer Responsibility, Accountability and Consistency Act of 2009 (HR 3408 by Rep. Jim McDermott, D-Washington, with14 co-sponsors) was introduced in July 2009.  The bill would amend the Internal Revenue Code to make it more difficult for employers to classify employees as independent contractors.  Under the bill, an employer could only classify a person as an independent contractor as if:  (A) the employer classified the worker as an independent contractor based on either written documentation that it received addressing the employee’s status; and (B) the employer or its predecessor has not treated any other individual holding a substantially similar position as an employee for employment tax purposes for any period beginning after December 31, 1977.  The determination as to whether an individual holds a position substantially similar to a position held by another individual would be made in accordance with the Fair Labor Standards Act.

Late last term, similar bills were introduced in the Senate (cosponsored by then Senator Obama and Senator Kennedy) and the House to heighten the scrutiny of individuals denied coverage under the FLSA and unemployment benefits by being misclassified as independent contractors.  (S 3648, HR 6111)  Those bills would have required employers to formally designate each individual’s status, to provide each individual notice of their status and to reflect their status in the employer’s formal records, and in those notices provide them with contact information to the government for further information regarding the rights of employees.  Non-employees would have to be told: “Your rights to wage, hour, and other labor protections depend upon your proper classification as an employee or non-employee.  If you have any questions or concerns about how you have been classified, contact the U.S. Department of Labor.”  Liquidated damages would be allowed for misclassified employees.    The bills did not leave their committees last year, but they are expected to be reintroduced during the current congressional session.

Robert A. Boonin, Butzel Long, PC – Ann Arbor, Michigan

boonin@butzel.com

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