National Consumers League

Unfinished Business: The Fair Labor Standards Act, 80 Years Later

Panelists suggest updates for nation’s basic minimum wage, overtime law

By Mark Gruenberg, People's World

March 29, 2018

This article originally ran here.

Washington—For 80 years, the nation’s basic minimum wage and overtime pay law, the Fair Labor Standards Act, has lifted wages and given most workers a guaranteed floor for earning a living. But the FLSA still has holes and needs some updating to include workers originally excluded because of race, panelists at a daylong seminar on the act said.

The session, sponsored by the pro-worker National Consumers League and the progressive lawyers group, the American Constitution Society, first focused on how FDR and his Labor Secretary, Frances Perkins, got the legislation through a balky Congress in 1938.

And they covered its subsequent expansions to various worker groups and how strong enforcement, especially in the early years, drew lines in the sand employers could not cross in the firms’ attempts to exploit workers.

The latest such advance came the week before, Consumers League Executive Director Sally Greenberg noted, when Reps. Rosa DeLauro, D-Conn., and Katherine Clark, D-Mass., forced GOP Trump administration Labor Secretary Alex Acosta to accept a ban – written into the FLSA — on bosses’ theft of tipped workers’ wages.

The $2.13 hourly federal tipped minimum wage, like the $7.25 hourly regular federal minimum wage, is part of the FLSA.

But “every single day FLSA rules and worker protections are being attacked,” Greenberg warned. Just the day before the March 28 meeting, “a law was being floated in the New Hampshire legislature to lower the age of young workers in dangerous occupations,” she noted. Curbs on child labor are part of the FLSA.

So is overtime pay for toiling more than 40 hours a week. And the same money bill for the government for the rest of this fiscal year that helped the tipped workers exempted minor league baseball players from overtime pay. Major league baseball owners lobbied for that.

All this didn’t stop the panelists from offering ways to further improve the FLSA. They included:

  • Include groups still banned from FLSA’s minimum wage and overtime pay coverage due to racism. The largest groups are home health care workers, domestic workers and farm workers. All were banned because FDR needed support from Southern Democratic senators to pass the law over a threatened filibuster and GOP opposition. The Southern Dems demanded exclusion of both groups because they were – and many still are – African-American or Hispanic-named.

“This was all very much about keeping the South in line” for the votes, said University of Nevada-Las Vegas law professor Ruben Garcia. When the law first passed, minus those two groups, the minimum wage provisions covered 11 million people, but 300,000 “were exempted,” added Kirstin Downey, Perkins’s biographer.

“Farm workers were added to the minimum wage in 1966, but excluded from overtime pay,” pointed out Bruce Goldstein, president of Farmworker Justice. “So at dairy farms, which produce year-round, workers labor 90 hours a week” with no overtime compensation. The California legislature “recently passed a law mandating a higher minimum wage and overtime pay for farmworkers,” he added.

The domestic workers are still “mostly women of color and immigrant women” said American Constitution Society President Caroline Frederickson.

  • Make sure the law’s minimum wage and overtime pay provisions remain “a floor, not a ceiling,” said AFL-CIO General Counsel Lynn Rhinehart. Somewhat surprising the packed room, she pointed out the American Federation of Labor – pre-merger – opposed the minimum wage, though not overtime pay and the 40-hour week. “No thank you, we can get it through collective bargaining” was the attitude, she said.

The more radical Congress of Industrial Organizations (CIO) unions, led by legendary Mine Workers President John L. Lewis, backed both. “Don’t call it a minimum fair wage. We’ll bargain for that,” Rhinehart quoted Lewis as adding.

  • Keep FLSA’s provision letting states and cities rise above the federal minimums. “In the last 20-30 years, we’ve seen an explosion of activism” by the states and cities to do that, Rhinehart noted. But GOP-run states are striking back against their Democratic-run large cities with “pre-emption” laws, taking away the cities’ rights to go beyond the federal minimums. The latest such pre-emptions, she said, were in Missouri and Alabama. A Minnesota effort failed when Democratic pro-worker Gov. Mark Dayton vetoed it.
  • Add paid sick leave and vacation time. “It must not be left to states and employers,” said Garcia. Though he did not say so, DeLauro has been pushing paid sick and family leave in Congress for more than a decade. The GOP-run Congress has deep-sixed her bill.
  • Figure out what to do about the “gig economy” and the whole problem of misclassifying workers as “independent contractors,” whom the FLSA does not cover. Rhinehart said the gigs, though a small part of the overall economy, are rapidly growing.

Federal data show an increasing share of the U.S. workforce are “independent contractors,” many of them deliberately misclassified by firms who can then get away with not paying overtime, the minimum wage or workers comp. They’re barred from organizing unions, too.

  • Reverse the incentive in the recent GOP-passed tax cut to turn employees into “independent contractors. “The default setting should always be ‘employee,’” eligible for coverage, said David Weil, the Democratic Obama administration’s Wage and Hour Division director. Wage and Hour enforces the FLSA. One suggestion later, to create a third class of workers – with some but not all the rights of “employees” under the FLSA, fell flat.
  • Add restaurant workers, said Saru Jayaraman, president of labor-backed Restaurant Opportunities Center, which marshaled the opposition to the Trump Labor Department’s management tip theft.

“We’re the fastest-growing large industry, with 12 million people, and the lowest-paid,” she said. Restaurants and other low-paying sectors are growing so quickly that “we’re getting very close to the time when one of two working Americans can’t afford to eat, let alone go out to a restaurant.” As for tipping, rich Americans imported the custom from 1800s Europe. Europe has since abandoned tipping.

  • Expand overtime pay eligibility. That’s what the Obama’s DOL did by both doubling the income ceiling – to $47,476 yearly — under which any worker must be eligible for overtime and expanding the definition of who can get it, said Economic Policy Institute Policy Director Heidi Shierholz. Business got federal courts to toss out that action and Trump’s DOL has revoked it. That only worsens “the rigged economy,” she said.
  • Since an FLSA legislative overhaul is unlikely, look for other ways to make employers really pay if they break it.

Benika Moore, Labor Bureau Chief for New York State Attorney General Eric Schneiderman, says her office targets repeat violators or those with multiple violations – and then charges them under laws with higher fines and/or jail time. The trials and settlements return more money to the injured workers, she added. “We go after repeat wage fraud and other illegality and also use those laws to get around the ‘independent contractor’ problem,” Moore said. That applies to the “gig” firms, too, she noted.

Such “proactive enforcement” could help “change the culture” of corporations, Weil said.

  • Virginia law professor Richard Schragger urged states to use their purchasing power to enforce wage and hour laws. “As progressives, we usually look to the federal government. We should shift to the states and localities,” he said. He admitted a big roadblock is legislative gerrymandering, taking away power from minorities, workers and progressives. “This is a political fight, not a legal fight,” he said.
  • Legalize private class action suits under FLSA and make them opt-out, not opt-in, said veteran pro-worker attorney Joseph Sellers. He also suggested increasing penalties against law-breaking firms to “double a worker’s losses” and removing the law’s present ban on such suits when DOL takes over the case. “And we should pass the Equal Pay Act, with compensatory damages for violators,” Sellers said. DeLauro has been pushing that, unsuccessfully, too, in the past GOP-run Congresses.
  • Schragger also suggested cities and their suburbs should join into metropolitan regions to together enact higher wage and hour, overtime and other standards.

The Seattle area is already doing that, said David Rolf, president of Service Employees Local 775 in Washington State. “Politics is ultimately about who gets what. To get change you have to build power, which is what we did in Seattle-Tacoma,” he said.