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Walberg Statement: Hearing on “Reviewing the Rules and Regulations Implementing Federal Wage and Hour Standards”

For more than 75 years, the Fair Labor Standards Act has been the foundation of our nation’s wage and hour protections. It establishes important rights for American workers and continues to guide employers in protecting those rights. However, the workplace looks very different today than it did in 1938 when the law was enacted, and the rules and regulations defining the law are failing to meet the needs of a 21st century workforce. Regulations that made sense long before the advent of smartphones and telecommuting simply don’t work in the modern economy.
 
Failing to keep up with the changing workplace, the law’s regulatory structure has become more complex and burdensome. Both employees and employers have difficulty understanding their rights and responsibilities and must constantly contend with conflicting legal interpretations of the law. Despite sincere efforts to act in the best interest of workers, many well-intentioned employers face costly legal battles because of a flawed regulatory system, and we have evidence to back that up.
 
A report from the nonpartisan Government Accountability Office revealed a surge in FLSA lawsuits during the past 20 years, with the number of lawsuits increasing by 514 percent since 1991. Let me repeat that – there has been a 514 percent increase in FLSA-related litigation over the last 25 years. That is a troubling increase and strong indication that something is not working.
 
To help address this significant problem, GAO urged the Department of Labor to “develop a systematic approach for identifying areas of confusion about the FLSA that contribute to possible violations and improving the guidance it provides to employers and workers in those areas.”
 
Simply stated, we need a system that holds bad actors accountable when they break the law, but that also helps law-abiding employers uphold their obligations. I hope some of our witnesses will shed light on whether the department is implementing GAO’s recommendations and what impact it may be having on our nation’s workplaces.
 
However, even the best administrative guidance cannot make up for other shortcomings that exist and are harming those working hardest to jumpstart the economy.
 
This isn’t the first time these concerns have been raised. In fact, this subcommittee has held a number of hearings in recent years looking at this very same issue. It has been a focus of our continued oversight for a simple reason: We want to ensure the regulations that underpin the Fair Labor Standards Act serve the best interests of both American workers and employers.
 
As Chairman Kline and I noted a year ago, we are ready and willing to be a partner in a responsible effort to modernize current regulations, but I would stress that it must be a responsible effort. The American people deserve a system that is simple, clear, and can meet the demands of the modern workplace. The last thing policymakers should do – including those in the administration – is to make a bad regulatory system worse.
 
In the coming days, the department is expected to release a proposal intended to “update” federal wage and hour regulations. Rumors are running rampant, and we know concerns are being raised about what the proposal may entail. Thanks to an administration notorious for overreaching and governing through executive fiat, I share many of those same concerns. I expect we will continue to hear about the consequences for workers and job creators if the administration goes too far in the regulatory proposal it is expected to release.
 
However, hope springs eternal, and it is my hope the department will heed these concerns and ultimately put forward a proposal that encourages – rather than stifles – productivity, personal opportunity, and economic growth. Any proposal that would inflict harm on the nation’s workplaces and move the country in the wrong direction will be opposed by this committee and, no doubt, the American people.
 
With that, I will now recognize the senior Democratic member of the subcommittee, Representative Frederica Wilson, for her opening remarks.

 

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