Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) established the 40-hour workweek and requires employers to pay time-and-a-half premium pay for work performed in excess of 40 hours a week. It also provides for a federal minimum hourly wage, to assure that people who work at jobs are not forced to live in poverty. The FLSA is intended to set a national floor for wages and hours, above which states may provide additional protections or a higher minimum wage.

When the Republicans gained control of both Congress and the White House in 1995, on behalf of their corporate allies they launched a full-scale attack on the FLSA, which they characterized as outmoded and no longer necessary. In 2004 the Bush administration took away overtime protection from millions of workers through regulatory changes at the Department of Labor, and the Republican-led Congress refused to reverse them. Under Republican control, Congress failed to increase the minimum wage for a decade, and tried to erode overtime protection for a variety of classes of workers.

Minimum Wage Increase

When the Democrats gained control of Congress in January 2007, however, things began to change. Legislation to increase the minimum wage by $2.10 an hour was one of the first pieces of legislation to pass the Democratic-led House of Representatives in the “first 100 hours.” It took longer to get the minimum wage increase passed in the Senate, where 60 votes are needed to overcome a filibuster, because Republican senators demanded that it be coupled with huge corporate tax cuts.

The minimum wage increase finally was enacted and signed into law in May 2007 and the first of three increases went into effect in July 2007, when the federal minimum wage rose from $5.15 an hour to $5.85 an hour. By September 2009 the minimum wage will be $7.25. Although this is a significant increase that will benefit about 12 million workers, the minimum wage will need another boost in order to help lift low-wage workers out of poverty.

For this reason, the UAW and other unions are urging our allies in Congress to introduce a new minimum wage bill to go into effect after the third hike under the current law. This legislation should increase the wage floor to $9.50 in three increases over two years and should index the minimum wage to inflation so that it will increase automatically rather than requiring congressional action.

We can expect continued opposition from Republicans and their business allies, however, who in the recent past have countered proposals for a hike in the minimum wage with proposals to effectively eliminate the federal minimum wage by permitting states to opt out of future increases. The opt-out proposal would give states a veto over any future increases and would completely undermine the FLSA’s role as a national wage floor. Other Republican minimum wage counterproposals have included eliminating FLSA protection for large classes of workers and/or additional tax cuts for corporations or the very wealthy.

Contrary to misinformation spread by opponents of the minimum wage, adults make up the largest share of workers who would benefit from a minimum wage increase. Forty percent of minimum wage workers are the breadwinners in their families. Moreover, despite what many opponents of the minimum wage continue to claim, several studies on past federal and state minimum wage increases have concluded there is no evidence they cause job loss. In fact, in October 2006 more than 600 economists, including five Nobel Prize winners, signed on to a statement in support of increasing and indexing the minimum wage.

The UAW believes the federal minimum wage needs to be raised to the level Congress intended when the FLSA was enacted in 1938, one that will lift working families out of poverty. In addition, we support indexing the wage to inflation to eliminate the need for protracted legislative battles in the future. An increase in the minimum wage is both humane and good for the economy. It would help raise the standard of living of millions of working people. At the same time, it would provide the economy with a needed boost, by increasing the purchasing power of millions of American workers.

During the second session of the 110th Congress, the UAW and other unions will urge Congress to pass new legislation to increase and index the minimum wage. We will insist that Congress pass a clean minimum wage bill, without any extraneous proposals that would take away FLSA protections or provide additional tax cuts for corporations or for the wealthiest Americans.

Action

Eligibility for Overtime

When the Department of Labor issued new “white collar” employee regulations in 2004, it removed millions of workers from the wage and hour protections of the FLSA. One way this was accomplished was by setting the threshold for automatic overtime eligibility at an unrealistically low annual salary level, below $27,500. This means that most white-collar workers with a salary of $27,500 or more a year are subject to a series of regulatory “tests” to determine whether or not they are entitled to overtime pay.

The UAW believes that no worker whose annual salary is less than $45,000 should be denied overtime pay, regardless of his or her education, job title or duties. This is the threshold that would have been set under the pre-2004 overtime rules, adjusted for inflation. Accordingly, in the coming session of Congress, we will advocate for legislation to increase the eligibility threshold for the FLSA’s automatic overtime protection and to index it to keep pace with inflation.

Action

Comp Time

Since 1995, when Republicans gained control of both chambers of Congress, business groups and their Republican allies in Congress have been trying to enact comp time legislation, calling it “family-friendly” legislation. However, the truth is that comp time would erode the FLSA by allowing employers to substitute a promise of compensatory time off in the future for premium pay at the time an employee works more than 40 hours a week. Although there is much less risk from comp time legislation now that both the House and the Senate are in Democratic hands, it is a high priority of the business community and Republicans are expected to continue to push for this legislation. Thus, we must remain vigilant in our opposition to it.

Americans work more hours in a year than workers in all other developed countries. The UAW believes that federal policy should aim to decrease the number of hours employees are forced to work so that parents are better able to balance work and family obligations.

Comp time bills introduced in Congress over the last decade would allow employers to issue comp time credit to employees who work more than 40 hours in a week rather than paying them time-and-a-half overtime pay. Comp time “banks” could accumulate up to 160 hours – one month’s wages – before the employer would have to pay overtime premium pay.

Nothing in past comp time bills requires employers to actually give compensatory time to their workers. Employers are allowed to turn down employee requests to use their banked comp time if the time off would, in the judgment of the employer, interfere with the employer’s business operations. Moreover, employers are allowed to hold accrued comp time in the “bank” for up to 13 months. Thus, for many employers, comp time would result in a no-interest loan from the workers to the employer.

Contrary to what proponents of comp time claim, comp time would not be voluntary, for at least two reasons. First, most nonunionized workers are afraid to say no their employer’s requests because they are at-will employees and can be fired for almost any reason. Second, under the comp time legislation, employers are allowed to discriminate against workers who decline to take comp time by giving all the overtime to workers who “volunteer” for comp time and none to those who want time-and-a-half pay instead of comp time.

Comp time is really just a pay cut. Even if workers get to take their compensatory time off, they have less money at the end of the year. Comp time doesn’t pay the rent or the grocery bills. Rather, comp time makes it cheaper for employers to work employees overtime. Naturally, if it’s cheaper, employers will require more overtime. This will lead to more stress and less family time for workers. For these reasons, the UAW will continue to oppose attempts to amend the FLSA to allow comp time.

Action