Evaluate FLSA for its Ability to Keep Pace with Today’s Workplace, SHRM Tells House Subcommittee

HR consultant says employers face challenges in complying with wage and hour rules

Feb 16, 2017
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WASHINGTON — The Fair Labor Standards Act (FLSA) is out of step with today’s technology-based economy and limits employers’ ability to provide important flexible work arrangements, the Society for Human Resource Management (SHRM) testified today.

The statute — which was passed in 1938 and defines standards for overtime pay — was “crafted for a different time,” Christine Walters, owner of the FiveL Company in Westminster, Md., told the U.S. House Subcommittee on Workforce Protections. “It must be evaluated to ensure it still allows employers to best meet the needs of employees.”

In her testimony before the “Federal Wage and Hour Policies in the 21st Century Economy” hearing, Walters described how employers face challenges in trying to comply with FLSA. Definitions of exempt and nonexempt employees are based on objective and subjective criteria, which make it difficult for employers to classify employees correctly. 

“Complying with the statute can create significant legal costs for employers, especially for many small businesses and nonprofits,” she said. “The stakes for improperly classifying employees are high.”

In speaking before the subcommittee on behalf of the 285,000-member HR association, Walters explained that FLSA has not kept pace with the advancement of workplace technology that allows employers to offer employees flexibility. “Smartphones, tablets and other technology allow many employees to perform job duties when and where they choose.” But compliance with FLSA restricts this ability.

In written testimony, Walters, SHRM-SCP, wrote: “As the modern workforce continues to evolve, workplace flexibility will become an even more important business strategy to help organizations respond to demographic, economic and technological changes in the workplace.  Unfortunately for employers and employees, outdated employment laws can stifle employer innovation.”

Walters, an independent HR and employment law consultant to nonprofit and small business clients, noted two additional ways that the FLSA limits employees’ flexibility:

• By making it difficult for employers to offer millions of nonexempt employees a biweekly workweek.

• By prohibiting private-sector employees from offering nonexempt employees the option of paid time off rather than overtime pay for hours over 40 worked during a week. 

The ability to offer nonexempt, private-sector employees compensatory (comp) time is one way public policy can encourage greater access to workplace flexibility. SHRM also believes that more can be done to encourage employers to create effective and flexible workplaces.

“Public policy should encourage and enhance the voluntary adoption of workplace flexibility programs,” she wrote, adding that SHRM continues to work with Congress on developing legislation to expand workplace flexibility options for employees.

The full testimony is available online.

MEDIA: For more information or to schedule an interview, contact Kate Kennedy at Kate.Kennedy@shrm.org and 703-535-6260 or Vanessa Hil at Vanessa.Hill@shrm.org and 703-535-6072. 

About the Society for Human Resource Management
The Society for Human Resource Management (SHRM) is the world’s largest HR professional society, representing 285,000 members in more than 165 countries. For nearly seven decades, the Society has been the leading provider of resources serving the needs of HR professionals and advancing the practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org and follow us on Twitter and Instagram @SHRMPress. 
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