Committee Statements

For more than 75 years, the Fair Labor Standards Act has provided America’s workforce with crucial federal wage and hour protections. Every day the vast majority of employers do their part to ensure workers enjoy these vital protections. Unfortunately, that is becoming an increasingly difficult challenge.

The current rules and regulations surrounding the law are exceptionally complex and outdated. Too often a maze of confusing regulatory requirements promotes the interests of trial lawyers, rather than working families. A report issued by the nonpartisan Government Accountability Office reveals a broken regulatory structure that fosters unnecessary and costly litigation.

According to the report, “The number of FLSA lawsuits filed nationwide in federal district courts has increased substantially, with most of this increase occurring in the last decade.” The GAO report continues, “Since 1991, the number of FLSA lawsuits filed has increased by 514 percent, with a total of 8,148 FLSA lawsuits filed in fiscal year 2012.” A more than 500 percent increase in litigation during the last two decades; clearly something isn’t right.

You would think employers are engaged in some coordinated national conspiracy to deny workers their rights. The truth is the vast majority of employers want to do the right thing and follow the law, but too often they unknowingly step into a regulatory trap. Even the Department of Labor has run afoul of wage and hour regulations and they are responsible for writing the rules and enforcing the law.

As litigation has increased, the number of guidance documents issued by the department has sharply declined. Between 2001 and 2009, the department released an average of 37 guidance documents each year. Yet in the last three years, the Obama administration has issued a total of seven – just seven during the last three years.

As the GAO notes, improving guidance “could increase the efficiency and effectiveness of [the department’s] efforts to help employers voluntarily comply with the law.” What’s the harm in assisting employers in understanding their legal responsibilities? Why wouldn’t we want to help employers understand their obligations, so they can stop spending time inside a courtroom and instead invest their resources into growing a successful business and creating jobs?

We’ve heard a lot in recent months and years about executive authority. We are told this is supposed to be a so-called year of action. Too often these actions stretch the limits of the law and even our Constitution. Yet when it comes to using a pen and phone to help employers understand a complex and confusing regulatory scheme, the Department of Labor can’t be bothered.

Earlier this year, the president issued an executive memorandum directing the secretary of labor to revise federal wage and hour regulations. There is obviously some agreement the rules are outdated and need to be improved. At that time, Chairman Kline and I said that if the president was beginning a sincere attempt to modernize current regulations, then the committee would support such an effort.

In fact, we hope we can be a partner in that effort and today’s hearing should certainly inform that work. We need responsible change that will bring these rules into the 21st century, while also safeguarding worker protections. The committee stands ready to assist, but more can be done to help employers comply with the law. The department has a job to do and we hope this government accountability report will encourage the agency to get to work.

 

# # #