On July 15, 2008, the House Education and Labor Committee held a hearing titled “Is the Department of Labor Effectively Enforcing Our Wage and Hour Laws?” Most of the testimony heard by the committee concerned the capacity of the Wage and Hour Division (WHD) to enforce the Fair Labor Standards Act (FLSA). Critics contend that the Bush administration has failed to protect workers against a growing problem of “wage theft” by adopting weak approaches to enforcement and reducing funding and staffing levels of the WHD.

In his opening remarks, Chairman George Miller (D-CA) chided employers for paying employees less than minimum wage, refusing to pay overtime when employees worked more than forty hours, and requiring employees to work off the clock. At Chairman Miller’s behest, the Government Accountability Office (GAO) launched two separate investigations into wage theft.

Gregory D. Kutz, Managing Director of Forensic Audits and Special Investigations for the GAO, discussed case studies that revealed examples of WHD not adequately pursuing labor violations. In particular, these studies included instances where WHD inadequately investigated complaints from low-wage workers alleging that employers had failed to pay them the federal minimum wage and required overtime pay, and had withheld their last paychecks. WHD investigators provided the following explanations for their limited responses to some of these complaints: they had to compete against the statute of limitations for assessing back wages because of a backlog of complaints; they did not thoroughly investigate complaints filed anonymously; they did not fully investigate complaints about isolated issues; and they did not treat complaints about receipt of last paychecks as cases to be investigated.

Alexander Passantino, the Acting Administrator for the WHD, outlined WHD’s enforcement responsibilities. He identified a variety of tools that WHD employees use to enforce the law and to achieve compliance, including responding to complaints, initiating directed cases, engaging in educational and other outreach activities, and assessing penalties against violators. Despite achieving improved FLSA compliance in the garment, long-term health care, and poultry processing industries, Passantino noted that WHD’s steadily declining staff level frustrated its performance efforts.

Anne-Marie Lasowski, Acting Director of Education, Workforce and Income Security Issues for the GAO, testified that WHD could improve compliance by making better use of available resources and ensuring consistent reporting. She attributed WHD’s inefficiency to (1) the increased use of more time-consuming comprehensive investigations; (2) a decrease in the number of investigators; and (3) the screening of complaints to eliminate those that may result in violations. The extent to which WHD’s activities have improved FLSA compliance is uncertain because the agency frequently changes how it measures and reports its performance. To assist WHD with better planning and conducting its FLSA compliance activities, GAO recommended that it evaluate complaint data, obtain and use input from external stakeholders, incorporate data from its commissioned studies, and leverage existing tools.

Kim Bobo, Executive Director of Interfaith Worker Justice, also provided recommendations for how WHD could better enforce compliance with FLSA. She suggested that it: (1) develop a community policing model for wage enforcement; (2) devote 50 percent of the Wage and Hour Division’s staff and resources to targeted investigations; (3) punish those who steal wages in meaningful ways; (4) experiment with new educational and enforcement approaches; and (5) increase the number of enforcement staff and attorneys devoted to wage and hour compliance. Additionally, Ms. Bobo recommended that WHD assign at least half the total investigators to targeted investigations focused on low-wage industries known to steal wages from workers.

On July 15, 2008, the Senate Committee on Health, Education, Labor, and Pensions held a hearing on pending legislation passed by the House of Representatives (H.R.3195) that would alter the reach of the Americans with Disabilities Act (”ADA”). Scholars, lawyers, consultants and analysts, and disabled persons appeared before the panel to discuss the proper scope of coverage for the Americans with Disabilities Act (”ADA”). The discussion centered on the proper definitions of the term “disability” and the phrase “substantially limits” under the proposed bill.

In 1999, the Supreme Court limited the definition of “disability” when it ruled that mitigating measures must be considered in determining whether an individual’s impairment substantially limits a major life activity. This trend continued in 2002 in Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, where the Supreme Court ruled that the words “substantially limits” and “major life activities” were to be interpreted strictly to create a “demanding standard for qualifying as disabled,” a standard that would remove thousands of disabled individuals from the Act’s coverage.

In light of this strict reading of the ADA’s provisions, the House of Representatives passed the ADA Amendments Act of 2008 (H.R. 3195) on June 25, 2008. Senator Harkin (D-IA) pointed to the ADA’s history of bipartisan support and the current consensus that the Supreme Court has interpreted the definition of “disability” too narrowly. While acknowledging problems needing follow-up in the House bill, Sen. Harkin pressed for broader coverage under the ADA.

Testimony at the hearing also centered on H.R. 3195’s definition of the phrase “substantially limits” as “materially restricts” and asked whether that definition provided a clear standard for the courts to apply. Most witnesses supported H.R. 3195’s definition. Law professors Samuel R. Bagenstos and Chai Feldblum stated separately that the “materially restricts” definition contained in the Act provided the appropriate level of clarity and that courts could effectively apply the standard. Michael Eastman, Employment Policy Director of the U.S. Chamber of Commerce, also supported the H.R. 3195’s definition, calling it a collaborative effort between business and the legislature.

One witness, Terry W. Hartle, Senior Vice President of the American Council on Education, expressed concern that that the broader definition of “substantially limits” in H.R. 3195 might force the academic community to alter essential elements of core education programs. Sen. Harkin disagreed, pointing out that this concern was directly contradicted by the unchanged statutory language. He explained that the only way to ensure that courts could never alter academic programs would be to institute a total ban on such actions - an idea he found unrealistic. Specific to standardized testing, educational consultant Jo Anne Simon dismissed as unfounded concerns that the new definition of “substantially limited” could create havoc in the field of standardized testing by requiring extra time and other accommodations for marginally afflicted students. Simon explained that the bill merely allowed persons with disabilities to be more easily identified and did not necessarily require increased accommodation.

Andrew Grossman, Senior Legal Policy Analyst of the Heritage Foundation and critic of H.R. 3195, submitted comments centering on compliance costs to businesses.  Calling the bill’s approach “vague,” he stated that the uncertainty created by H.R. 3195 will lead businesses to waste resources in attempting to comply with unclear standards. Grossman’s comments echoed the testimony of Sue Gamm of the Public Consulting Group, who urged adoption of more specific language.

Sen. Harkin concluded the hearing by reaffirming his commitment to H.R. 3195’s passage prior to the close of the year.

On July 15, 2008, the House Subcommittee on Commercial and Administrative Law voted to report favorably the Arbitration Fairness Act of 2007 (H.R. 3010) to the full Judiciary Committee. H.R.3010 was introduced in the House by Rep. Hank Johnson (D-GA) on July 12, 2007, and the Subcommittee held hearings on the Act in October. 

H.R.3010 would amend the Federal Arbitration Act by invalidating any pre-dispute arbitration agreement requiring mandatory arbitration of disputes under employment, consumer or franchise contracts, or any dispute arising under a statute “intended to protect civil rights or to regulate contracts or transactions between parties of unequal bargaining power.” The Act allows arbitration of disputes if both parties agree to use arbitration after a dispute arises and would not invalidate arbitration clauses in collective bargaining agreements.

Rep. Johnson stated that arbitration has become increasingly common in contracts between businesses and parties with less bargaining power, such as employees or consumers, and that arbitration clauses are often obscure and “buried” in such agreements. Rep. Johnson also noted that arbitration providers have a strong incentive to favor the business hiring them, creating a biased forum with little accountability or oversight. 

Rep. Chris Cannon (R-Utah) criticized the Act as interfering with contract rights and also expressed concerns that eliminating arbitration would decrease the ability of employees to pursue small claims. Critics of the Act have echoed Rep. Cannon’s concerns, emphasizing that the Act may hurt the very parties it seeks to protect by slowing the dispute resolution process and raising litigation costs.

The Senate Version of H.R.3010, S.1782, was introduced by Sen. Feingold (D-WI) on July 12, 2007 and referred to the Committee on the Judiciary.  H.R.3010 has 101 co-sponsors, while S.1782 has six co-sponsors.