Is Congress In The Early Stages Of Changing Federal Overtime Law?

By harley erbe

Two proposals affecting federal minimum wage and overtime law have begun working their way through Congress.  The proposals would make significant changes to federal minimum wage and overtime law (part of the Fair Labor Standards Act) in employees' favor.  It's very early in the legislative process for these proposals and there's no way to know whether some or all of the proposals will pass or when they'll pass and in what form.  But, should even a portion of these proposals become law, minimum wage and overtime claims under the Fair Labor Standards Act will potentially become more valuable for employees.

One proposal would allow employees to enforce wage contracts or other arrangements through the Fair Labor Standards Act (FLSA).  The FLSA presently requires employers to pay a set minimum wage and a certain amount of overtime and that's it.  State laws, such as the Iowa Wage Payment Collection Law (Iowa Code Chapter 91A), are used to enforce any wage issues beyond the minimum the FLSA requires.  The FLSA has never been used to enforce compensation arrangement and agreements that exceed the FLSA's mandates.  But one proposed change to the FLSA would make the FLSA an enforcement mechanism for all wage and compensation issues, not just minimum wage and overtime:

"In the case of an employment contract or other employment agreement, including a collective bargaining agreement, that specifies that an employer shall compensate [a covered employee] at a rate that is higher than the [minimum wage], the employer shall compensate such employee at the rate specified in such contract or other employment agreement."

This proposed amendment to the FLSA would increase the remedies for Iowa employees who have wage issues with their employer.  The FLSA's liquidated damages provision automatically calls for an amount of liquidated damages equal to the amount of unpaid minimum wage or overtime compensation, while the Iowa Wage Payment Collection Law allows for a lesser amount of liquidated damages depending upon how long it takes the employer to pay the disputed wages.  Further, the FLSA allows for the possibility of a three-year time limit on wage claims, while any claims under the Iowa Wage Payment Collection Law must be filed within two years of the employer's failure to pay wages.

The other FLSA amendment proposal would noticeably alter the FLSA's enforcement provisions.  For example, the current statute of limitations for FLSA claim is two years, or three years if the employee can prove that the employer willfully violated the FLSA.  But the enforcement amendments would extend the limitations period to four years, even five years upon proof of a willful FLSA violation.  That's an extra several years of FLSA wage violations that employees would be able to make a claim for.

A second major enforcement change would be an increase in the liquidated damages that employees can recover if they establish that their employer willfully violated the FLSA.  Right now, willful FLSA violations require employers to pay an additional amount of damages to the employee equal to the amount of FLSA wages owed.  The proposed FLSA amendments would make liquidated damages double the amount of unpaid minimum wage or overtime compensation.

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