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About the FLSA
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     The FLSA provides exemptions from its wage-hour provisions for a wide variety of businesses and occupations.29 Examination of legislative history indicates that these exemptions were motivated by concerns for the national economy (such as decreasing unemployment levels and keeping prices of certain commodities low) and concerns for the well-being of specific industries (which were not thought to be able to withstand higher labor costs).30 The result is that there is no uniform scheme for exemptions. The "hodge-podge" of exemptions has also left agencies responsible for enforcing this law with an administrative nightmare.

     Congress was concerned that application of the FLSA to certain industries would destroy them altogether. It thus provided exemptions for these industries.31 For example, legislative history reveals that Congress' exemption of homeworkers who made Christmas wreaths was based upon its belief that the industry was made up of families who engaged in that activity to provide extra funds during the holidays, and that requiring overtime payments in such an environment would destroy the industry.32 Similarly, the FLSA initially provided an exemption for the laundry and dry-cleaning industry because of the low profit margin in that industry and the fear that, in the face of overtime payment requirements, owners would discharge employees and switch to coin operated establishments.33 Analogous reasoning was used to arrive at the agricultural exemption.34 Specifically, legislative history indicates that the exemption was based upon the fear that application of overtime requirements would result in higher produce prices,35 would impact most harshly upon the smaller growers and would prove unmanageable where growers utilized piece-rate harvesters.36 Lobbyists were successful in persuading Congress to exempt other industries as well by arguing that the maximum hours standard would drive up prices and hurt fisheries, logging operations, bulk petroleum distributors and local newspapers and broadcasters.37 It is unclear why Congress believed that the FLSA was a threat to these industries and not others.

     The three exemptions that are the focus of this article are those that apply to executive, administrative and professional employees.38 Three factors are examined when determining whether a given employee qualifies for any of these exemptions. These factors are (1) amount of payment,39 (2) job duties,40 and (3) method of payment.41 The first factor requires a minimum weekly salary. Since the minimum weekly salary under the regulations is $250,42 and since most employees occupying positions which may arguably fall under this exemption earn at least this amount, the minimum salary factor has become largely obsolete until now. The minimum salary for these exemptions is slated to increase to $455 a week and the United States Department of Labor is engaged in a PR blitz to tout that millions of additional workers will now be eligible for overtime pay.

     The second factor used to determine whether an employee qualifies for the executive, administrative or professional exemption relates to the employee's job duties.43 While the job duties factor may have been a valuable tool in determining how to classify an employee at the time it was implemented, examination of an employee's job duties is now both more difficult and less relevant in determining the importance of a position.44 Examination of an employee's duties has therefore proven to be unworkable in determining whether he or she is entitled to overtime pay because of changing job requirements, a multitude of job categories and varying skills and abilities required of many positions.

     As noted above, when the FLSA was written, the workplace tended to be segregated in terms of white-collar and blue-collar workers and employers clearly identified their executives, administrators and professional employees.45 Today, the workplace has become much more complex. The distinctions between clerical, sales and technical employees and administrators, executives and professionals have blurred. There is no clear delineation that is used to determine which workers may be classified as bona fide executive, administrative or professional workers. The 2004 regulations may help, but we are still stuck with an outdated framework.
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29. See generally 29 U.S.C. 213 (1988). Certain workers are exempt from the FLSA's overtime requirements such as: outside salespeople (29 U.S.C. 213(a)(1)), inside salespeople working in a retail industry earning over one-half or their wages from commissions (29 U.S.C. 213(a)(1)), workers employed by bulk petroleum dealers (29 U.S.C. 213(a)(8)), small newspapers, broadcasters, certain recreational establishments (29 U.S.C. 213(a)(3)), seafood, fishing, forestry and logging operations (29 U.S.C. 213(b)(28)), babysitters (29 U.S.C. 213(a)(15)), and those individuals who make Christmas wreaths in their homes (29 U.S.C. 213(d)). There are also agricultural exemptions. 29 U.S.C. 213(a)(6)(1). (back)
30. Concern was expressed in Congress that industries such as agriculture and commercial laundries (to name a few) would not be able to survive if employers in these industries were compelled to pay an overtime premium. See 107 Cong. Rec. 6244-45 (1961); see also 112 Cong. Rec. 11361 (1966). (back)
31. See supra note 34. (back)
32. Homeworkers engaged in the making of evergreen wreathes are exempt from the overtime provisions of the FLSA. 29 U.S.C. 213(d) (1988). Examination of the Congressional Record indicates that Congress felt that this was "for all practical purposes, a wholesome family project which one would like to think would be encouraged rather than limited or prohibited." 105 Cong. Rec. 17335 (1959). (back)
33. When this issue was debated in Congress in 1961, various reasons were given in support of this exemption. Senators cited the increase in the number of coin-operated laundries as well as the greater affordability of washing machines generally as reasons for the exemption. The argument relied on was that if commercial laundries were subject to the wage-hour provisions of the FLSA, they would have to increase their prices. If such prices were increased, "women" would begin doing their laundry at coin operated laundromats, or convince their husbands to buy them a washing machine. Senators also argued that laundries traditionally have operated at a very low profit margin -- less than two and one-half percent. 107 Cong. Rec. 6244-45 (1961). In addition, the Labor Department stated that between 1947 and 1960, the laundry industry lost approximately 60,000 jobs (at a time when employment in most industries was on the rise). Id. (back)
34. 29 U.S.C. 213(a)(6) (1988). (back)
35. 112 Cong. Rec. 11361 (1966). (back)
36. Id. (back)
37. See supra note 34. (back)
38. 29 U.S.C. 213(a)(1) (1988). (back)
39. 29 C.F.R. 541.117 (1993). (back)
40. 29 C.F.R. 541.305 (1993). (back)
41. 29 C.F.R. 541.118 (1993). Aside from employees paid on a fee basis, employees must be paid on a salary basis to qualify for any of these exemptions. See supra. (back)
42. 29 C.F.R. 541.117. There is also a "long test" under which individuals may be deemed exempt if they earn a salary of $155. 29 C.F.R. 541.2(e)(1). (back)
43. The executive exemption analyzes supervisory duties and the use of discretion and independent judgment. 29 C.F.R. 541.1(a)-(e) (1993). The administrative exemption analyzes whether job duties involve general business operations requiring discretion and independent judgment. 29 C.F.R. 541.2(b)-(d) (1993). The professional exemption looks at required levels of education or artistic abilities required to perform a position. 29 C.F.R. 541.3(a)-(d) (1993). (back)
44. Reich, supra. (back)
45. See supra. (back)
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