Ambiguities in the Fair Labor Standards Act, the federal wage and hour law, and its implementing regulations, present employers with needless challenges in answering basic questions, such as who is an “employee,” what constitutes “work,” and who is exempt from overtime pay under the law, Jackson Lewis Shareholder Paul DeCamp told the Committee on Education and the Workforce’s Subcommittee on Workforce Protections of the U.S. House of Representatives.
DeCamp, who heads the firm’s Wage and Hour Practice, was one of four witnesses to offer testimony during the Subcommittee’s July 23rd hearing on “Improving the Federal Wage and Hour Regulatory Structure.” The hearing follows President Barack Obama’s direction to the Department of Labor to review and update the regulations on worker eligibility for overtime under the FLSA. DeCamp is a former head of the DOL’s Wage and Hour Division.
DeCamp told the Subcommittee that while the requirements of the FLSA seem straightforward (to pay workers at least $7.25 an hour, plus overtime pay for hours beyond 40 in a workweek, unless an exemption applies), the rate of violations reported by the DOL is high, at least 70 percent, among the employers the agency contacts. That the statute itself does not offer useful definitions of such key terms as “employee” and “work” is one of the reasons for the difficulties some employers face in complying with the law. Another is that the DOL has turned to attention-getting enforcement actions, abandoning the agency’s longstanding practice of issuing opinion letters to provide guidance on employers’ specific FLSA questions. He criticized the agency for “focusing on civil money penalties, liquidated damages, litigation and public shaming” of employers instead of helping them comply with the law and avoid violations. He argued that the agency must differentiate between employers that purposely violate the FLSA and those that want to comply with the law, but are confused about its requirements.
In his written testimony, DeCamp gave examples of the law’s ambiguities, including an unclear distinction between employees and independent contractors that challenges employers’ compliance efforts and leaves employers open to the risk of penalties and litigation.
Further, the consequences of misinterpreting the law can be heavier for some employers than others. He pointed out that the House has approved amendments to 2015 appropriations bills that prohibit funding for any federal contractor found to have violated certain wage requirements under the FLSA. (For an example, see our article, House Passes Appropriations Bill Barring Contractors with Some FLSA Violations from Government Contracts.)
DeCamp urged the agency to recognize that preparing and issuing clear guidance documents on areas of particular concern to large numbers of employers and employees will benefit everyone.