Workforce Protections Subcommittee Holds Hearing on Bill 
to Help Workers Get Extra Pay for Extra Effort

            WASHINGTON, D.C. - The House Education and the Workforce Subcommittee on Workforce Protections today held a hearing on H.R. 1602, the Rewarding Performance in Compensation Act. Introduced by Rep. Cass Ballenger (R-N.C.), the bill would help workers share in financial gains when their extra efforts produce increases in productivity. Rep. Judy Biggert (R-IL), vice chair of the subcommittee, presided over the hearing.

            “Bonus or gainsharing plans can encourage employee creativity and innovation, improve customer satisfaction, and promote safety and efficiency,” Biggert said. “While the Fair Labor Standards Act (FLSA) does not prohibit employers from providing these types of rewards, it does make it difficult and confusing for those who wish to do so. . . . By eliminating disincentives in current law, this legislation will encourage employers to reward their employees and make it easier for employers to ‘share the wealth’ with their employees.”

            Dr. Charles Fay, director of graduate programs in human resources management at Rutgers University, emphasized the need to update current law to reflect the realities of the modern workforce. “The current FLSA rules governing treatment of incentive pay for the purposes of computing overtime rates were designed for a different time, when work and wages were very different than they are today, and when organizations had to worry about competition from overseas producers of goods and services,” Fay said.

            Lori A. Thomas, vice president of Management Compensation Group/Dulworth Inc., said that unless current law is updated, it will serve to disadvantage the very workers it was designed to protect: “Encouraging companies to provide the same compensation plans at all levels is a necessary first step in addresses the ever-widening pay gap that exists between the most highly-compensated and the least highly-compensated,” Thomas said.

            Leonard Court, testifying on behalf of the U.S. Chamber of Commerce, stated: “The bonus provisions of the FLSA were passed in a different era to fulfill different needs. Over time, Congress has amended this statute to exclude certain non-discretionary additional incentives from the regular rate calculation such as profit sharing and stock option plans in recognition of the need to update this statute. It is now time to take the next step in that journey by enacting H.R. 1602.”

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