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Our comments begin with a description of the role the USDOL should take when issuing proposed regulations impacting coverage under any provision of the FLSA. We then touch on four specific areas included in the NPRM: (1) Employee Commuting Flexibility Act; (2) tip and meal credit rules; (3) fluctuating workweek method of computing overtime, and (4) service advisors working for auto and boat dealerships I. The USDOL’s Role in Interpreting and Enforcing the FLSA. The Secretary of Labor is responsible for enforcing the FLSA as amended by the Portal-to-Portal Act. 29 U.S.C. §§ 204, 211, 216(c), 259. In establishing the Department of Labor (DOL) in 1913, Congress stated that its purpose “shall be to foster, promote, and develop the welfare of the wage earners of the United States.” 1 USDOL mishandles its protective role with several of the proposed rules in the NPRM, by improperly narrowing the coverage of the FLSA. The original purpose of the Fair Labor Standards Act of 1938 was to eliminate "labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers" by "insuring to all our able-bodied working men and women a fair day's pay for a fair day's work." A.H. Phillips, Inc. v. Walling, 324 U.S. 490, 493 (1945) (quoting Message of the President to Congress, May 24, 1934); 29 U.S.C. § 202(a). The minimum wage provisions were enacted to ensure that those dependent on others for their livelihood maintained the minimum standard of living espoused by the Act. See Brooklyn Savings Bank v. O’Neil, 324 U.S. 697, 706-07 (1945); Barrentine v. Arkansas-Best Freight System, Inc., 450 U.S. 728 (1981). Congress recognized that its legislation would be ineffective if companies that complied with these laws experienced economic pressure from competitors who could cut their costs by flouting the FLSA's minimum labor standards. The FLSA seeks to eliminate substandard labor conditions, including child labor, on a wide scale throughout the nation.... This purpose will fail of realization unless the Act has sufficiently broad coverage to eliminate in large measure from interstate commerce the competitive advantage accruing from savings in costs based upon substandard labor conditions. Roland Electrical Co. v. Walling, 326 U.S. 657, 669-70 (1946). Accordingly, section 2(a)(3) of the FLSA declares that substandard labor conditions constitute "an unfair method of competition in commerce." 29 U.S.C. § 202(a)(3). The Act expects that most workers will not work for less than the minimum wage. 29 U.S.C. § 201, 202(a); Brennan v. Heard, 491 F.2d 1, 4 (5 th Cir. 1974) (Congress’ purpose in passing the FLSA was to enable a substantial portion of the American work force to maintain a minimum standard of living). 1 An Act to Create a Department of Labor, ch. 141, s 1, 37 Stat. 736 (1913) (codified at 29 U.S.C. § 551 (1988). 2
FLSA Exemptions Must Be Read Narrowly. The Supreme Court has emphasized that the "breadth of coverage" of the FLSA is "vital to [its] mission" of establishing a national work week standard and that statutory exemptions to the Act should be narrowly construed. 2 The presumption must be that all workers are covered. 3 USDOL’s proposed regulations narrow the FLSA in a way that will significantly reduce worker protections in a variety of industries including delivery, restaurants and hospitality, limousine and taxi, retail, nursing homes, and food service, where every paycheck counts. In this way the proposed rules flout the purposes of the FLSA and send a message to employers that they have nothing to fear in the USDOL. 4 II. USDOL Proposed Regulations A. Employee Commuting Flexibility Act of 1996 (ECFA), at 73 Fed. Reg. 43656 The Portal-to-Portal Act (29 U.S.C. § 251 et seq) amended the FLSA in 1947 to bar recovery of hours spent on duties that were preliminary and postliminary to an employee’s principal activities and on duties that are not “integral and indispensable” to an employee’s principal activities. 29 U.S.C. § 254(a)(1)-(2). The Employee Commuting Flexibility Act of 1996 (“ECFA”) amended section 254(a) of the Portal-to-Portal Act to permit employees and employers to agree that time spent on activities incidental to normal to-and-from work commuting in an employer-provided car is not compensable. Pub.L. 104-188, § 2102 (1996); 29 U.S.C. § 254(a). ECFA added the following language to 29 U.S.C. § 254(a)(2): For purposes of this subsection, the use of an employer’s vehicle for travel by an employee and activities performed by an employee which are incidental to the use of such vehicle for commuting shall not be considered part of the employee’s principal activities if the use of such vehicle for travel is within the normal commuting area for the employer’s business or establishment and the use of the 2 Powell v. United States Cartridge Co., 339 U.S. 497, 516 (1950); Mitchell v. Kentucky Finance Co., 359 U.S. 290, 295 (1959). 3 Powell v. United States Cartridge Co., supra, 339 U.S. at 516; Arnold v. Ben Kanosky, Inc., 361 U.S. 388, 392 (1960). 4 United States Government Accountability Office, “Better Use of Available Resources and Consistent Reporting Could Improve Compliance,” (GAO-08-962T); “Case Studies from Ongoing Work Show Examples in Which Wage and Hour Division Did Not Adequately Pursue Labor Violations,” (GAO-08-973T); and see, David Weil, “Crafting a Progressive Workplace Regulatory Policy: Why Enforcement Matters,” 28 Comp. Lab. <strong>Law</strong> & Pol’y Journal 125 (Spring 2007). 3
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