Minimum Wage and Related Issues Before the 106th Congress: A Status Report

Publication Date: January 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Labor

Type:

Abstract:

In each Congress since 1938, when the Fair Labor Standards Act (FLSA) was enacted, proposals have been introduced that would, in some manner, have amended the statute. The 106th Congress was no exception.

Bills introduced in the 106th Congress dealt with minimum wage, overtime pay and related issues. Three general proposals to raise the federal minimum wage (and to make other adjustments in the Act) moved forward in the legislative process. H.R. 3081, a tax bill to which a package of FLSA provisions was added, was passed by the House on March 9, 2000. H.R. 833, bankruptcy legislation, was passed by the House but then, in the Senate, was amended to include certain additional tax and FLSA provisions -- prior to its adoption by the Senate on February 2, 2000. Merging of the two bills was rendered difficult because of their somewhat different content.

Both H.R. 3081 and H.R. 833 proposed to raise the minimum wage from $5.15 per hour to $6.15 per hour: the first through 2 years; the latter, over 3 years. Each had other labor-related provisions as well. H.R. 3081 would have (a) exempted licensed funeral directors and embalmers from minimum wage and overtime pay protection, (b) altered and expanded the current exemption of certain computer services workers from such protections, and (c) created a new minimum wage/overtime pay exemption for certain inside sales workers. H.R. 833 would have altered the definition of ''regular rate'' for calculation of overtime pay (1_ times a worker's regular rate of pay). In late October, a 2-year increase in the minimum wage (with no other FLSA provisions) was added to the conference report on H.R. 2614, general small business and tax legislation, and passed by the House on October 26, 2000. No immediate action followed: a veto had been threatened.

Several elements, often associated with changes in the minimum wage, were addressed neither in H.R. 3081 nor in H.R. 833. First, the threshold for exemption of computer services personnel, originally fixed at 6_ times the minimum wage, was converted in 1996 to a flat dollar amount: i.e., $27.63 an hour. If unchanged in the context of a rate increase to $6.15 per hour, the threshold would have-been reduced to 4_ times the minimum wage. Second, the cash wage employers must pay to regularly tipped employees (previously a percentage of the federal minimum wage), was set in 1996 at $2.13 an hour -- assuming the worker earns at least the minimum wage in combined tips and cash wages. The $2.13 threshold remains unchanged until Congress alters it. Third, a sub-minimum wage for youth (certain persons under 20 years of age) was set at $4.25 per hour in 1996. Unless changed by the Congress, such youth workers will not be affected by an increase in the federal minimum wage. Fourth, it has been proposed to allow states, under various arrangements, to opt out of the federal minimum wage structure. A part of neither bill, the ''state flexibility'' option has the support of certain industry and/or conservative groups.

Ultimately, none of these FLSA-related proposals was approved. Should the 107th Congress take up the FLSA/minimum wage issue, it will do so with a fresh starting point.