The Competitive Enterprise Institute (CEI) is pleased to submit these comments in response to the Department of Labor’s (DOL) Request for Information (RFI) regarding potential changes to the overtime regulations, located at 29 CFR part 541, which define and delimit exemptions for certain executive, administrative, professional, outside sales and computer employees (EAP) from the Fair Labor Standards Act’s (FLSA) minimum wage and overtime requirements.
CEI is a nonprofit public interest organization dedicated to the principles of limited constitutional government and free enterprise. For the past six years, I have researched the adverse effects of labor and employment law and regulation on job creation and individual prosperity.
History of FLSA Overtime Requirements. In gathering information to make changes to the overtime regulations it is instructive to revisit the intent of Congress in enacting the FLSA and the experience with past regulations governing overtime pay eligibility.
Historically, Congress’ intent behind the FLSA was never to set the wages and hours for all workers. Primarily, it was to ensure an adequate standard of living for the most disadvantaged workers. As stated, in a 1945 Supreme Court case, “the prime purpose of the legislation was to aid the unprotected, unorganized and lowest paid of the nation’s working population.” The reference to disadvantaged workers was to factory floor employees. The purpose of the FLSA was not to set wages and hours for executive, administrative, professional employees, who were exempted from minimum wage and overtime requirements because they enjoy better pay, benefits, workplace flexibility, and stronger bargaining power than low-wage workers.
The FLSA’s text makes clear that it is not intended to cover all workers. The statute contains numerous exemptions, many of which pertain to overtime requirements. There are nearly 50 full or partial exemptions from the FLSA’s overtime requirements.