The Fair Labor Standards Act Restricts Employees, Not Just Employers
People often think of the minimum wage as a restriction on employers "” that they cannot pay less than a certain number for a job. But it is also equally a restriction on job seekers "” my son cannot legally offer to take a job for less than $7.25, even though he would probably gladly do so. For teenagers, just gaining the experience of working and building basic skills (like showing up on time, following procedures, interacting with customers and fellow employees) has enormous value, such that even a nominal payment of a few dollars an hour would more than compensate him for his labor.
Ann Althouse has found the Fair Labor Standards Act (FLSA), which contains the minimum wage, also can lead to restrictions on employee behavior:
Everyone at The University of Wisconsin will have their pay cut by about 3% and will be "furloughed""”told they do not have to work"”for a corresponding period of time. But it turns out that we not only don't have to work, we are being told we cannot work. The guidelines ban any kind of work during furloughs, anywhere. This means that even if you are at home you are not supposed to read professional material, get and send emails, make calls, use a smart phone, etc. Employees who violate the work ban can be disciplined.
She goes on to describe her voyage of discovery as to why so irrational-sounding a policy might exist, but I alredy knew. To furlough exempt (meaning exempt from hourly bookkeeping) workers, they must become non-exempt. And non-exempt workers have to be paid for time worked, even if the time worked was not ordered by the employer and even if the time worked was against the wishes of the employer.
We face this situation all the time. We have hourly workers in campgrounds. Unlike in a factory (for which the FLSA was written and where there are fairly strict controls on how people work), my campground workers have a lot of leeway to set their own schedule and determine their work patterns. But I have to set very clear guidelines - "at the end of the day you have to get x and y and z done and you are not authorized to work more than t hours doing it."
But we nearly always have folks who want to go do whatever they want to do. I had an employee who loved to arrange river rocks around camp sites as borders after he had finished his other work. His work looked really nice. But I could not afford to pay him to arrange river rocks around camp sites. His manager told him to stop. He kept doing it. You know what? I still had to pay him for his time to arrange river rocks, despite the fact the company had specifically told him not to and despite the fact that this time exceeded the guidelines I gave him (once his work exceeds X hours, he has to get management permission to work more in a certain time period). In fact, the only way I eventually was able to stop paying him to arrange river rocks at work was to fire him.
silvermine:
Yep. The labor laws here specify how many hours and such you can work in a day, in a row, etc. without paying me overtime. I was working part time (25 hours a week) mostly nights and weekends so I could watch my kids during the day. It worked great... except I often had to stop working when I was on a roll and had time, because otherwise I'd have to charge my company overtime. So I ended up having to work when the kids were up (instead when I wanted to) all so the state could "protect" me. Bah.
July 10, 2009, 12:51 pmKR:
While I don't doubt the stupidity of labor laws, I'm not clear on your story. Presumably I could go to one of your campgrounds and arrange river rocks, and you wouldn't have to pay me. If the employee had finished his work for the day, both in tasks and in hours, why was he not "off the clock" after that, and free to arrange river rocks on his own time? Was the problem that the employee was "billing" his arranging time, and you had no option but to accept the hours he "billed" even though he was told not to?
July 10, 2009, 1:00 pmFred Z:
I'm up in Canada and we have similar laws and there are lots of ways around them, even honest ones.
We often use 'Independent Contractors' and 'Piece Rates'. Do those work down there?
We also have the rule of 'Hire family members and friends you can trust, pay them cash and tell the feds to !@#$%^&* off'. I am sure you have that one, everyone does.
July 10, 2009, 4:30 pmDr. T:
To KR: There's no such thing as free time when an employee performs tasks on an employer's property. Even if the employee declared that he was doing the work on his own, the (stupid) law requires that he get paid at his usual hourly rate. Plus, the extra hours could bump the employee's status from part-time to full-time, which means that benefits would have to be paid, too.
As an aside, I'd have fired the employee simply because he refused to obey direct orders from the boss, even if I didn't have to pay the extra hours.
July 10, 2009, 5:38 pmMesa Econoguy:
There’s an acceptable axiom that stipulates Democrats hate business, and Republicans used to support it.
July 10, 2009, 6:52 pmShamus:
I think a good policy would be to explicitly explain the law when an employee runs into something like this. Just a single sheet of paper that says "This is the the law, this is why it was passed, and this is why we have this stupid rule now." I did fast food for about four years in the early 90's, and I remember running into all sorts of stupid and annoying and counter-productive rules. Years later I was able to see that they were the result of regulations, but it's natural for employees to simply assume their bosses are idiots.
Employees would realize their bosses are not morons, and it would educate people about the unintended consequences of well-meaning regulations.
I wish my employers back then had done so for me. It's a terrible drain on morale to think you're working for someone with no common sense. It certainly would have begun my education as to the nature of government about ten years sooner.
July 11, 2009, 12:16 amNoumenon:
Mr. Rock Arranger is an example of why we need the law. Employers set work hours. Working extra hours gets you fired. Not working extra hours (unpaid) would also get you fired, if it weren't for this law.
Far more common than employees with fun jobs thinking "Gee, I did x and y but I want to spend t+2 hours doing z" would be employees with tough jobs thinking "Gee, he wants me to do x, y, and z so I guess I'm going to have to work t+2 hours, even though I only get paid for t. All my coworkers are doing it and I don't want to get fired."
I mean, this happens already. Exempt workers totally get the shaft, more and more hours, on call all the time, I'd never want to be one. Hourly workers have to fight too to keep from getting more and more unpaid work. I know at my job we went from a paid 15 minute shift change to having our shift end at the dot of 6 am. We still have to stay till 6:15 for shift change, but now we don't get paid for it. My sister goes to her work unpaid in the evening to finish the chemistry sample runs she starts in the morning -- two commutes.
Warren, whenever you write about how tough government regulations are on you, I think, "Wow, that's bad, I had no idea what being a business owner was like." Whenever you write about how the system is so easygoing on your employees, I think "Wow, he has no idea at all what being an employee is like."
July 11, 2009, 6:24 amVal:
Mr. Rock arranger is a great example of enforced mediocrity. While appearing to protect the employee, Noumenon, it attacks the work ethic of everyone and provides powerful disincentive for those who want to excel. For those who want to go above and beyond the pale, they cannot. So, it could be said, why don't those individuals go work for someone else or start their own business? Hmmm... Well, often times one cannot, and the industries most exposed to these rules will suffer the consequnces, as will society as a whole due to decreased quality and efficiency. As always, the 'what could have been' is so much harder to measure than what we can see RIGHT NOW. It is, however, obvious that this is what we sacrifice. All the things that have lifted us out of the dark ages fall into this category.
Having received one of the worst 'ass chewings' in my life (including 8 years in the infantry) from a manager in my prior firm for working TOO much, I can assure you it does not motivate one to work harder or smarter. In fact, it makes one want to find a different job. That manager told me later that he had never felt more ridiculous than threatening to fire someone for working too much, but his job was on the line. Imagine that. Legally enforced mediocrity. Suely that damages the firm, its workforce, and the economy.
July 11, 2009, 8:53 amgadfly:
"To furlough exempt (meaning exempt from hourly bookkeeping) workers, they must become non-exempt. And non-exempt workers have to be paid for time worked, even if the time worked was not ordered by the employer and even if the time worked was against the wishes of the employer."
"Exempt" employees are those managers and specialists (such as accountants), who are exempt from the federal rules requiring overtime pay. Such employees paid for time periods not hours. Exempt vs non-exempt is defined in the law by job duties; the two types are not interchangeable. In my 45 years of business experience, I have never seen exempt salaried employees first converted to non-exempt status before they can be furloughed. They are advised that their services are not required at present and that their fringe benefits cease as of such-and-such a date. In other words, they can immediately apply for a job elsewhere and work for another employer.
The UW - Madison rules about not permitting work elsewhere while employed at the university is not Fair Labor Standards law; instead this is a rule of the employer. All employees can have their pay rate reduced at the whim of the employer unless prohibited by labor law (in the case of minimum wage employees) or forbidden by individual employee contracts. If work rules forbidding other employment are a condition of employment, employees risk permanent dismissal if caught. You have to wonder how Ann Althouse reconciles income from her blog while working under UW rules.
July 11, 2009, 1:23 pmTC:
Simple solution really, make the position a salaried position with minimum hour requirements and tasks and such. If they desire to work 100 hours a week, it does not matter, the pay remains the same.
You get to keep the very type of person you desire in position. The employee knows exactly what they must do and anything extra is upon them alone.
Oh and call them a manager, as it seems most positions of managerial level are exempt from the BS rules about time.
July 11, 2009, 11:48 pmNoumenon:
Lemme think about this. Let's say you want to do task T and work four extra hours a week on it. Here are the scenarios:
1) Task T will increase the company's profit, but the employer doesn't want to pay you extra for it. In this case the real problem is that either the company doesn't see what's profitable, or the system is too inflexible to let you work extra hours, or perhaps the company is top-down managed and thinks task T doesn't fit it's business strategy. I would fix one of those problems before just doing the work for free.
2) Task T is just something fun for you your employer doesn't want. Well, if you're the only one who profits from your going above and beyond, then do it on your own time and build the world's largest Lego rollercoaster or whatever. What's enforcing mediocrity is the fact you want somebody else to pay you for it.
July 12, 2009, 12:40 amSteve-o:
You can't just CHOOSE to exempt an employee from hourly reporting and overtime pay requirements by taking their hourly pay rate, multiplying by 2080, and calling them salaried. Whether they're entitled to overtime, etc. is dictated by the type of job the employee has and the manner in which the work is conducted. You can't take a fry cook at McDonald's, call him salaried, and then never worry again about whether you have to pay him overtime. He's not exempt from the FLSA overtime rules, so not paying him overtime would be illegal.
July 12, 2009, 5:35 amCapt. Grandpa:
Noumenon wrote "Mr. Rock Arranger is an example of why we need the law. Employers set work hours. Working extra hours gets you fired. Not working extra hours (unpaid) would also get you fired, if it weren’t for this law."
Without quoting your whole comment, lets just stipulate it is all true as far as it goes. The problem with the law is that, like most such laws, it is one size fits all. Just as often as the scenarios you describe, are those in which the employee is restricted, which was the original point of Warren's post and exemplified by Silvermine's comment. In my career as a Personnel Director I routinely had employees who wanted to work six days this week so they could take a three day weekend next week without taking a pay cut. Unfortunately, FLSA requires that I pay them time and a half for the sixth day. Even if they only get paid for four days the following week, it costs the employer more for the same ten days work. So I had to say reluctantly say no and the employee lost out.
The solution to that problem is for the employees to band together in groups, lets call them Unions, to negotiate work rules unique to each work place. Unfortunately for both employees and unions, unions have used their political power to get laws like the FLSA passed. The result is that employees no longer need unions and union membership drops.
This hurts employees and management alike.
July 12, 2009, 8:41 amgadfly:
Ann Althouse describes a scenario dreamed up by the Wisconsin governor to reduce UW system spending. The governor's plan can only be compared in its complexity to a "Rube Goldberg" invention. A private company would simply advise all exempt salaried employees that their salary has been summarily reduced by 3 percent. The FLSA does not regulate pay scales . . . and it is unlikely that exempt salaried employees are paid anywhere near minimum wage levels.
The governor cannot legally thumb his nose at federal employment law and reclassifying college professors as "non-exempt" would not make it past the first US Department of Labor hearing . . . unless of course, the Minimum Wage Czar has approved the deal.
July 12, 2009, 11:10 amBill:
Noumenon wrote: "Exempt workers totally get the shaft, more and more
hours, on call all the time, I’d never want to be one."
This is a common and easy to spot attitude on the part of many clockwatchers, who then complain, often bitterly, when those same exempt persons earn higher total compensation and can take comp time.
It also almost guarantees that the Noumenons of the world will being doing the same low level work years from now, unless they are sucking on the government teat.
July 12, 2009, 2:25 pmNoumenon:
Capt. Grandpa:
I'm on board with you there. My company switched to a shift of four twelves, then three twelves the next week that gives me seven days off every two weeks. I'm very aware the inflexible labor laws make that more expensive than working eight hours every single day, and that I'm lucky my company was still able to do it.
So I guess what I'm saying is it's very easy for me to see the upside of allowing the worker to offer to work more hours one day and fewer the next. It's not so easy for me to see the upside of allowing the worker to offer to work for less money and longer hours with no pay.
I guess that's because of my limited perspective; if I were an employer, it would be easy to imagine my company being forced to offer flex time to everyone because some people wanted it. Since I'm just an employee, that didn't loom as large as the idea of an employee being forced to work unpaid because other employees would do it.
July 13, 2009, 5:27 amNoumenon:
Bill:
It's just human nature that someone who is not an exempt employee, might come to think being exempt sucks. Just the way exempt employees think being hourly sucks, and Taliban think being American sucks, and jocks think being a nerd sucks. Everybody thinks their own way is best. Including you, obviously.
It's better that way; otherwise, those of us who are going to be doing low level work for years and years would dislike it all those years -- but most don't.
July 13, 2009, 5:36 amAgammamon:
The whole bit about being "forced" to work unpaid because your coworkers will do it is called competition.
Employers compete for employees and employees compete for employers.
There is a strong belief in this country that an employee is just a powerless little man who can never get a good deal for himself, who is always getting screwed over. So we create minimum wage laws and the FLSA and give oftimes give unions the backing of law enforcement in negotiations. All this does is help those who work enjoy a decent wage at the expense of marginal producers and increased prices for all goods.
But it does have benefits for government since we can take the earnings of those working and redistribute it to those who can not. Whole bunch of jobs "created" managing this.
July 13, 2009, 2:15 pmNoumenon:
I acknowledge there is an element of "competition for me and not for thee" in this. But competition sucks and is no fun (well, winning is fun). I think it's OK for us to force competition on corporations, though, because they don't have actual feelings, and nobody cares if they can't compete and die. Employees are different.
July 14, 2009, 9:01 amPhil:
Noumenon, Corporations don't have feelings, but the managers of corporations do.
July 14, 2009, 11:50 amspiro:
"But competition sucks and is no fun"
Really? Then you might as well swallow a bullet today, because (excepting religious dogma) competition is the essence of life. Not just human life, ALL life.
July 14, 2009, 5:02 pmIf not to compete, Noumenon, why do you wake up every day?
How have you obtained your education? Companionship? Income?
Next time you find yourself in a situation where you can observe nature, take a minute to really observe the way animals interact. It is ALL centered around competition. Even domesticated animals still have quirky instinctive habits tied to competitive vigor.
spiro:
cntd rant on competition....
In fact, my wife and I were having this very discussion the other day on her cousin, who just signed up for food stamps. She gets $400/month for food for her fat self and her kid. She is gainfully employed and also drives a much nicer car than we do. When she went shopping with my wife, she saw the handful of coupons and generic brand groceries that in my wife's cart and asked "why do you do all that." After all, on $400/month for two people, you can get a full cart full-priced name brand groceries every trip to the store.
July 14, 2009, 5:10 pmIn the end, however, my wife and I succeed in keeping our small business open and in paying our bills every month (BARELY right now), and our pride in personal responsibility and our inner competitive drive for self-reliance keeps us off the gubmint's dole. Maybe that makes us suckers, but I'd rather take a job shoveling shit on the graveyard shift than depend on someone else to provide for my wife and kid. I think it's what being a man and a libertarian is all about.
Noumenon:
Spiro, I view your belief in competition as ideological. You live in the most cooperative species on the planet other than ants, and you most likely spend 90% of your time just fitting into your role in society rather than defending it or trying to take over a new one. You just want to feel life is a deadly competition because it's dramatic.
You'd also have to watch an animal in nature for a pretty long time to find it even giving another animal a second's thought...
Anyway, the ubiquity and naturalness of competition don't mean it doesn't suck. Am I not allowed to say I don't like rain just because it rains all the time? Am I not allowed to propose an umbrella?
July 16, 2009, 7:20 amMichael Stack:
I used to work for a large shipping company. Hourly employees weren't able to access their email remotely because of concerns that we'd have to pay them. Often the employees wanted access for non-work related reasons, but we had to disable their access.
July 21, 2009, 8:47 amErin:
What if my employer has not given me any hours for over a month? I am past my probationary period and am a part time employee. I have an open schedule and have asked my store manager to schedule me with no result. IS there any law against this that is on my side!?
July 23, 2009, 10:10 pm