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Pending FLSA Legislation

Two major amendments to the Fair Labor Standards Act, one each by a Republican and a Democrat, could profoundly change several FLSA standards for overtime and minimum wages if and when they are passed into law.

The first, introduced in February by Congresswoman Cathy McMorris Rodgers (R. WA), would allow comp time in the private sector. The second, introduced last week by Rep. Donna Edwards (D-MD), raises the minimum wage for restaurant workers. Both bills are fairly controversial, but for different reasons.

The first bill is a re-introduction of a bill called the Family- Friendly Workplace Act (FFWA; H.R. 933). Its purpose is to amend the FLSA to allow employers to give workers comp time instead of overtime.

This is a common practice for government employees, but is currently illegal under the FLSA for the private sector. In fact, if your private employer is offering comp time, that could be a problem.

The choice of whether to take comp time or overtime under FFWA is up to the employee. Comp time would be figured at a rate of 1.5 times the amount of overtime worked-for instance, if a worker accrued 10 hours of overtime (working a 50- hour week), that employee would be able to choose between taking the 10 hours in overtime pay, or taking 15 hours of paid comp time.

Under the bill, employees can accrue up to 160 hours of comp time a year, which must be paid out at the end of the year if it isn’t taken. Also, any such agreements must be in writing.

The second bill, called the Working for Adequate Gains for Employment in Services Act or “WAGES Act” (H.R. 2570), would increase the minimum wage for tipped employees to $3.75 per hour, starting 90 days after the passage of the bill. That wage would then increase to $5.00 per hour beginning July 1, 2011, and then, in 2012, the amount would increase to 70 percent of the minimum wage as established under Section 6(a)(1) of the FLSA, or $5.50 per hour, whichever amount is greater.

Both bills have the potential to affect employers’ bottom lines and employment flexibility. We will keep you posted as they make their way through committee.

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