In 1938, when the nation’s basic wage and hour law—the Fair Labor Standards Act (FLSA)—was enacted, the Depression-era workplace was characterized by:
- a fixed beginning and end to both the workday and the workweek in most American workplaces;
- with the exception of certain occupations (e.g., repairmen and truck drivers), the performance of the vast majority of work taking place in the workplace because of the lack of communications technology allowing the performance of jobs from remote locations;
- a far more stratified and predictable designation of occupations, as compared to today’s workplaces where there is a greater blurring of distinctions and a more rapid evolution of job descriptions; and
- a greater preponderance of manual labor because of the relative absence of technology and mechanization that transformed the way work is performed today.
Today, the statute’s framework is out of synch with the modern workplace and the needs of employees for greater flexibility. The dual purpose of the law is to provide a minimum wage (currently $7.25 per hour) and ensure that workers who are not otherwise exempt (i.e., “nonexempt”) are paid time-and-a-half overtime for hours worked in excess of forty in a given workweek. The most common exemption is for “white collar” employees who must be paid a salary. Unfortunately, these simple concepts have been translated into countless vague, inconsistent rules and exceptions that are increasingly out of step with the times. Employers regularly deal with the following kinds of situations forced by the statute’s inflexibilities:
- Work schedules are carefully designed to avoid overtime. Thus, even if employees would prefer to work eight days in a row, with six days off in a row, the employer cannot afford such a schedule because it would involve at least two full days of overtime.
- Because employers fear that FLSA violations will occur due to employees engaging in work that is not being tracked, they impose restrictions on the use of e-mail, Internet or social media outside of working hours. Thus, nonexempt employees are discouraged or prohibited from checking emails off-hours due to the risk of not reporting their time worked. In occupations such as off-site repair, where the use of Blackberries, iPhones or other personal digital assistants (PDAs) is essential, some employers require the employee to keep these at one of the employer’s locations after hours, picking it up and dropping it off there, regardless of the location of site visits.
- The law creates disincentives toward engaging nonexempt employees in trouble-shooting and decision making because of overtime issues. Thus, nonexempt employees may be routinely excluded from off-site meetings or trips that could be beneficial to both them and the company because of the administrative difficulty of determining what time is compensable and the actual cost, once determined. In team situations where nonexempt employees are actively involved in deciding how the work is to be performed, the employer often has to discourage them—to the point of imposing discipline—from engaging in “after hours” discussions with their co-workers or engaging in any other work, such as writing a proposal for addressing a particular problem. This caste system based on job classifications is increasingly out of sync with corporate cultures that depend on teamwork. Further, the inability to participate in off-hours or off-site events stunts the career growth of nonexempt employees who lose the benefit of these activities.
Employers are being pressed by policymakers to offer more flexible workplaces for their employees with new mandates being considered. Before imposing new regulations on America’s workplaces, policymakers should first consider the removal of barriers that exist under the FLSA. The disconnect between the FLSA and the modern workplace will continue to grow if the law is left unchanged. It will increase tensions among employers, employees, and regulators, with the only true beneficiary being the plaintiff’s bar. Congressional attempts at incremental reforms stalled in the 1990s, leaving a bitter taste in many policymakers’ mouths and making them reluctant to make another attempt. Yet the pressure will steadily increase, and it will become a problem that is increasingly more difficult to ignore. HR Policy would encourage a dialogue among all stakeholders to seek an alternative approach that provides the basic wage and hour protections for employees who need them, without inhibiting the growth of flexible workplaces.