Opinion pieces and speeches by EPI staff and associates.

[ THIS ARTICLE FIRST APPEARED IN PHILADELPHIA INQUIRER ON JUNE 19, 2003 ]

Work-flex bills don’t help the workers

By Lonnie Golden

Despite their labels, the “Family Time Flexibility Act” and “Family Time and Workplace Flexibility Act” (H.R. 1119 and S. 327) would do nothing to ease the inflexibility of the modern workplace and its squeeze on family time.

These bills would permit employers, with employee sign-off, to sidestep the decades-old requirement to pay time-and-a-half for overtime work, by replacing cash with future time off.

Together with Department of Labor actions that will soon remove several occupations from coverage under overtime pay rules, the upshot is likely to be longer and more irregular work hours for more employees – not exactly a prescription for better balance among work, family, and personal life.

The proposed “reforms” are in fact a boon mostly for employers. Quarterly earnings reports could be boosted and countless millions “saved.” Companies would no longer owe any overtime compensation to many of their skilled employees who will soon become “exempt” (including computer and network operators, engineers, and pharmacists).

Moreover, the Senate version of the bill would institute a 50-30 hour “variable” work week, in which employees could be required to work five straight 10-hour days and earn no overtime pay if the employer sends them home early or tells them not to come in for 10 hours in the following week. Timing the work week to match the flow of work and curbing companies’ cash expenses for labor clearly may have some merit, but this would benefit working families only by coincidence. Indeed, it is more likely to exacerbate work-family time conflicts.

Employers in many European countries have instituted, even with the concurrence of some labor unions, “annualized hours” or “hours averaging” schemes, in which the work week can increase beyond its legal statutory limits during busy or peak workload periods, without requiring payment of overtime.

But in exchange there is usually a shorter weekly average, higher effective wage per hour, more employee say in the daily scheduling of hours, and longer paid vacation and leave times. Such measures are glaringly absent in the Republican-sponsored Fair Labor Standards Act.

The original intent of the FLSA was to deter long workdays, prevent overwork, spread employment opportunities, and be widely inclusive. Any attempt to weaken or narrow it should be judged on bottom-line effects, so let us consider whether employees would actually wind up working fewer hours per year if they sign on to the comp time option.

First, those who select comp time instead of cash payment become employees who will likely have the most overtime work scheduled. Second, because the bills are written to grant employers the discretion as to when employees must use, or cannot use, their comp-time credits, many such credits will be either unused or unusable by year’s end.

Indeed, if any more than one-third of earned comp-time credits are not granted, an employee’s annual hours of work actually will be longer than if no overtime was scheduled in the first place.

Couldn’t the FLSA be made more family-friendly? Comp time must be accompanied by reforms that would preserve the deterrent effect of the overtime-pay requirement, providing a better chance at reducing the annual hours of time-starved employees who would select the comp-time option. Such employees should be entitled to receive at least their straight-time wage rate for overtime with the “premium” in comp-time credits.

Additional cash should be paid along with forced use of comp time and mandatory overtime. “Overtime” should start after 35 hours per week. “Interest” in time or cash should be earned on requested but denied hours of comp time. Use of comp time should be denied only if it would cause “substantial and grievous injury” to employers’ operations and no substitute worker can be found. In addition, the right to comp time should be extended to “exempt” workers working beyond their implicit contractual work hours per week or per year.

Indeed, these more highly paid employees are more apt to need more time than more cash. It is time to put some real family-friendliness into the package with such a label.

Lonnie Golden is a research associate at the Economic Policy Institute and an associate professor of economics at Penn State Abington.

[ POSTED TO VIEWPOINTS ON JULY 10, 2003 ]