Family time: two very different bills regarding employee time off attempt to woo working families - congressional bills

Entrepreneur, Oct, 1996 by Stephen Barlas

This election season, both parties are working hard to cozy up to working parents. Democrats are pushing to expand the Family and Medical Leave Act (FMLA) and legalize employer use of comp time. A House Committee has passed a Republican-backed "Working Families Flexibility Act" whose comp time provisions are greatly preferred by small business.

The Fair Labor Standards Act (FLSA) requires overtime pay for employees who work more than 40 hours a week. Many small-business owners would prefer to give these workers comp time instead, but that is prohibited under the FSLA. These employers also want employees to be able to work 60 ours one week and 20 the next, for an average of 20 hours per pay period, without paying them time and a half for the extra 20 hours they worked in the first week. The House bill (H.R. 2391), which passed a committee vote on June 26, allows that. For any hours worked beyond the averaged, 40-hour weeks, an employee could take up to 30 days a year in comp time or cash that out at time-and-a-half whenever he or she wants.

The hitch, according to the Clinton administration, is that the employee couldn't use the comp time without employer approval. "Employees have to be in the driver's seat as to when they take comp time and how they utilize it" says Secretary of Labor Robert Reich. Reich notes the Clinton bill does not force businesses to offer comp time; it simply allows them to do so - thereby eliminating the FLSA restriction- if the employee can take the time whenever he or she wants as long as the employer is given two weeks, notice. (The Clinton proposal provides a maximum of 80 comp hours.)

The House bill, in contrast, puts the employers at the wheel. A spokesperson for the House Committee says employees could not take comp time if the employer says it would "unduly disrupt" operations. Allowing employees to take comp time at their discretion "would be an impossible situation," maintains Bill Stone, owner and CEO of Louisville Plate Glass Co. in Louisville, Kentucky.

"If employees can schedule time off without regard for company needs, it becomes impossible to manage," says Stone, who owns three companies. He already gives unpaid time off for children's school events and doctor visits. "Now employees thank us for that comp time," Stone says. "Once It becomes a mandate, I lose any loyalty from employees stemming from the comp time I extend voluntarily."

Stone is equally opposed to the FMLA, from which he is exempt since each of his companies has fewer than 50 employees. The FMLA requires employees be eligible for 12 weeks of unpaid, job-protected leave for family emergencies, including the birth of a child or the serious illness of a close family member.

In June, Sen. Christopher Dodd (D-CT) and Rep. Pat Schroeder (D-CO) introduced legislation that drops the FMLA employee-size threshold to 25. It would also allow parents to take 24 hours of unpaid leave a year for their children's educational and extracurricular activities.

An aide to Sen. Dodd explains employees could take only four of those 24 hours in any one month. But she admits the two-pronged approach - adding 24 hours and lowering the FMLA threshold - is apt to create political wildfire. She acknowledges the Dodd bill has no co-sponsors, nor have any small-business groups called with their support. Dodd may well choose one provision to offer as an amendment to another bill when he brings his bill to the Senate floor, which he plans to do before this congressional session ends.

Secretary Reich won't say whether the President would sign a bill that does not lower the threshold. "But," he says, "there is a good chance of bipartisan support for this proposal." However, he admits no business group has endorsed either aspect of the bill.

Peter Eide, labor law policy manager for the U.S. Chamber of Commerce, says lowering the FMLA threshold is unnecessary if Congress passes some compromise of the Clinton flextime proposal and H.R. 2391. "We absolutely cannot lower the 50-worker threshold," says Eide. "Small businesses cannot afford to figure out the arcane processes of the [FMLA]. They don't employ lawyers. Payroll clerks do their personnel work."

Dodd argues the FMLA has posed no problem for businesses so far. A report from a 16-person bipartisan commission he chaired found nine out of 10 companies reported virtually no, or only minimal, cost associated with the law. The majority of businesses affected by the law reported no negative impact on business performance, which bodes well for Dodd's proposed threshold change.

Stephen Barlas is a freelance business reporter who writes monthy Washington columns for 15 magazines.