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Challenges to the FLSA (1995)

The Fair Labor Standards Act (FLSA) provisions covering public employees are under attack. In recent months there have been several troubling developments:

  • The U.S. Department of Labor (DoL) made changes to FLSA regulations covering the public sector which adversely affect public employees.
  • Public employer representatives and officials formally declared that the Act should not apply to state and local governments.
  • Legislation to abolish the 40-hour workweek, applicable to both the public and private sectors, was introduced in Congress.

History of FLSA Coverage

The FLSA was enacted in 1938. It proclaimed Congress’s intent to ensure “the maintenance of the minimum standard of living necessary for health, efficiency and general well-being of workers...” The overtime provisions of the Act were conceived to prevent employers from requiring employees to work excessive hours and to stimulate job growth.

In 1966, Congress extended coverage to a limited number of public employees, mostly in schools and hospitals. In 1974, Congress expanded FLSA coverage to all state and local governments, thereby declaring that public employees should be entitled to the same standards of decency as other workers. Some public employers disagreed and went to court seeking to have FLSA coverage declared unconstitutional. The Supreme Court sided with the public employers in its June 1976 National League of Cities v. Usery decision. However, in 1985, this ruling was overturned. In its Garcia v. San Antonio Transit Authority decision, the Supreme Court finally guaranteed FLSA protections to all state and local government employees.

Distinctions Without a Difference

Some public employers are now arguing that because the Act was written for the private sector it should not be applied to the public sector, which is unique in character and circumstances. This argument has already been examined and rejected. When Congress extended FLSA coverage to public employees in 1974, it did not make any distinction between public and private sector workers. Furthermore, in Garcia, the Supreme Court rejected as “unsound in principle and unworkable in practice” efforts to distinguish between governmental and proprietary functions.

The amendments to the Act passed after the Garcia decision did result in some accommodations to specific employment conditions and issues in the public sector, such as compensatory time off and the definition of volunteers. These changes were enacted only following a joint recommendation to Congress by the affected parties. Furthermore, these provisions are no different than the myriad specific exceptions and exemptions strewn throughout the FLSA, such as allowing health care institutions to calculate overtime based on a 14-day work period rather than the standard seven-day workweek, and exempting employees working at certain amusement establishments.

Controversy Concerning the "White Collar" Exemptions

The reasons for the renewed attack on the FLSA are the executive, professional, and administrative exemptions included in the Act. Employers have the option of exempting such employees from the minimum wage and overtime provisions of the Act if certain tests, established by regulation, are met. They include the requirement that these employees meet specific “duties” tests that vary according to the exemption. In addition, exempt employees must be paid a salary, rather than an hourly wage. This means that workers are paid a predetermined amount of money that is not subject to reduction because of variations in the quality or quantity of work performed. During the past few years there have been several court decisions regarding various aspects of the salary basis requirement in both the public and private sectors that have created some confusion. Many of them have been in conflict.

The most notable of these court decisions is Abshire v. County of Kern. In 1990, the U.S. Ninth Circuit Court of Appeals ruled that the county could not exempt battalion chiefs from the overtime provisions of the FLSA. The county had a policy that if workers did not have accrued leave or compensatory time, their pay could be docked on an hourly basis for any time they were late or absent. The Court reasoned that because there was a possibility that battalion chiefs could have their pay reduced for absences of less than a day, the county had not met the requirement that exempt workers be paid on a salary basis.

Public employers, concerned that the impact of the Abshire decision would bankrupt state and local budgets, already stretched thin, argued that laws, regulations, and compensation systems in the public sector and issues of accountability, did not permit them to pay workers for time when they were not actually working. They recommended that the application of the FLSA to state and local governments be changed to reflect the distinctions between the two sectors.

Changes in Public Sector Regulations

In 1992, the regulations concerning the definition of executive, professional, and administrative employees were changed only for the public sector. Faced with pressure from public employer groups, and having made no attempt to talk with the affected public employee unions, the DoL revised its regulations to permit public employers to dock the pay of otherwise exempt workers for absences of less than a day. Employers in the private sector continue to lose the exemption if they make such deductions in the pay of their workers.

Public Employers Are Not Satisfied

These changes in the regulations did not appease those public employer representatives and officials clamoring for change. Other issues have been dredged up to support their contention that the FLSA should be modified. For instance, they are concerned about recent court cases that have held public employers liable for time spent by employees in such activities as walking to and from their work stations and caring for dogs used in their jobs. Proponents of change also object that certain bonuses must be included in calculating a worker’s regular rate of pay for the purpose of determining overtime compensation. Finally, they maintain that the rigidity of the 40-hour workweek discourages employers from offering employees flexible work schedules.

In response to these concerns, the DoL is studying their regulations. If problems are identified, they can be addressed through the regulatory process. As part of that process, public employer representatives and public employee unions can engage in joint problem-solving discussions similar to those undertaken when the Act was amended to cover public employees. For some public officials and public employer representatives, this approach is not enough.

At the recent annual meeting of the U.S. Conference of Mayors, a resolution was introduced requesting “Congress to restore the state and local exemptions from the provisions of the Fair Labor Standards Act, and provide protection from the retroactive liability of this unfunded mandate.” This resolution was ultimately referred to a task force for further study. Similarly, New York City Mayor Rudolph Giuliani, in testimony before the U.S. House of Representative’s Subcommittee on Workforce Protections, ended his remarks by stating that “lifting FLSA’s application to state and city employees will go a long way to liberating states and cities from federal intervention and the ongoing burdens of litigation.”

There is absolutely no justification for singling out government workers for exclusion from the minimum wage and overtime protections of the FLSA.

Discriminating against such public employees as secretaries, custodians, laborers, and nurses’ aides by excluding them from coverage, while their counterparts in the private sector continue to enjoy the Act’s protections, would be fundamentally unfair and without merit.

The Attack on the FLSA is Expanded

Legislation was recently introduced in Congress that would abolish mandatory overtime compensation at time and a half for employees working more than a 40-hour workweek, in both the public and private sectors. Under the legislation, which is proposed as a means to inject flexibility into the FLSA, workers could “volunteer” for a compressed work schedule. While the schedules are not defined, an employer could establish a compressed schedule for employees consisting of ten 16-hour workdays in a four-week period. Under such scheduling, overtime would not kick in until employees worked more than 160 hours in the four-week period. While the legislation includes an anti-coercion provision, in reality such protections are usually meaningless, particularly in non-union settings.

Fortunately, most AFSCME contracts contain overtime provisions that are significantly better than the protections required under the Act. However, if sections of the Act are weakened or, in the unlikely event public sector coverage is repealed, it might be difficult to protect overtime gains already achieved in agreements or to achieve improvements in agreements with provisions that more closely resemble the Act’s minimum standards.

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