Testimony on H.R. 1119, The Family Time Flexibility Act
Testimony of Houston L. Williams, Chairman and CEO, PNS, Inc. on behalf of the U.S. Chamber of Commerce before the Subcommittee on Workforce Protections of the Committee on Education and the Workforce, United States House of Representatives
March 12, 2003
Good morning Mr. Chairman and distinguished members of the Subcommittee. Thank you for inviting me to testify before you today. I commend you for your efforts to find ways to improve workplace flexibility and for holding a hearing on this important issue.
My name is Houston Williams and I am the founder, Chairman and CEO of PNS Inc.
PNS is a California based corporation involved in providing telecommunications services and products to telecommunications industry service providers, and end users of these services, nationally (i.e. warehousing/distribution/network and system engineering/installation and light manufacturing). Approximately 80 percent of my employees are hourly workers subject to the overtime provisions of the Fair Labor Standards Act (FLSA). These employees work primarily in clerical positions, as technicians, and in various blue-collar positions in our warehouse, such as assemblers or drivers.
I am here to speak with you today on behalf of the U.S. Chamber of Commerce. I joined the Chamber's Board of Directors in June 2002 and also serve as a member of its Council on Small Business. The Chamber is the world's largest business federation, representing an underlying membership of more than three million businesses and organizations of every size and in every industry sector and region of the country. Ninety-six percent of the Chamber's members are small businesses with fewer than 100 employees.
I am pleased to support H.R. 1119, the Family Time Flexibility Act and to relate how this bill would help my company and my employees.
H.R. 1119 would modernize the application of the Fair Labor Standards Act to the private sector by permitting employers to offer their employees the voluntary choice of taking overtime in cash payments, as they do today, or in the form of paid time off from work. Just as with overtime payments, paid time off would accrue at a rate of one and one half hours for each hour of overtime worked. Family time arrangements permit employees to build up a bank of time that they can use to take paid time off from work when they need it, provided the time off does not unduly disrupt the employer's business.
Family time, sometimes referred to as compensatory time, is a simple, common sense solution to provide additional flexibility to help employees balance work and time for family or other personal needs. I would think that everyone on this committee would agree that the workforce has changed significantly since passage of the Fair Labor Standards Act 65 years ago. When the FLSA was enacted, the workforce consisted mostly of men. It was atypical for households with young children to have both parents work outside of the home. But today, a greater percentage of employees who work overtime are women, there are more dual-wage earner couples in the workforce, and there are more single mothers in the workforce. These demographic changes in the workforce are a major reason why today many more employees view time off as valuable or more valuable than cash payments for overtime work.1
Some opponents of family time legislation argue that more mandated family leave programs are the way to balance work and family commitments. But new one-size-fits-all mandates are not the solution we need. Instead of stifling creative scheduling arrangements, we should be finding ways to encourage innovative employer-employee partnerships by giving employees and employers more options so that together they can find solutions to balance the needs of employees with the demands of the workplace. Providing more options to employees will help them find time for any number of personal commitments, including spending time with family or friends, volunteering with a nonprofit organization or charity, visiting the doctor or dentist, or participating in local community group, church, or religious organizations.
The concept of giving employees the choice to select paid time off in lieu of cash wages is nothing new. In fact, it has been an option widely available to government employees for close to 20 years where, I understand, it has worked well. The time has come to give the men and women in the private sector the opportunity to choose for themselves whether to receive extra compensation or paid time off for working overtime.
Now let me take a moment to describe my company and how enactment of this legislation would help me to provide more options for my employees.
PNS has roughly 125 employees, down from 375 employees in mid-year 2000. Roughly 90% of our employee body have young families or they are of child bearing age. PNS is a generous firm, providing full medical benefits including family coverage for which we do not require any employee co-payments. We also offer a 401k plan, five personal paid days off and two weeks of paid vacation. These benefits apply equally to all employees regardless of the employees' rank. For some of my employees, additional paid time off is more valuable than additional money. More time to spend with their families, more time to do errands, and, indeed, more time to enjoy the material things they purchase with their wages, the hard earned fruits of their labor. People are different and have different priorities in life.
Even though we offer good benefits, employees sometimes need additional time off to accommodate family or personal needs. For example, it is common for employees to use vacation time during the summer when their children are out of school. Sometimes, their remaining personal days may not be enough to address needs later in the year such as parent teacher activities and doctor visits. While our employees know that they can request additional unpaid time off, this is not a perfect solution for employees because it reduces their pay and can make it more difficult for employees to make ends meet.
To illustrate how enactment of this bill would help my employees, let me provide one example. On any given day two to four children accompany their parents to work. This could be for any number of reasons, such as a problem with their child's day care. Often times, those parents would prefer to stay home from work to care for their children rather then bring them to work, where the children have little to do. However, if an employee has used up all of his or her vacation time and personal days, then they are faced with the prospect of taking unpaid leave and taking a cut in pay that week to care for their child. While I work hard to accommodate these situations through a flexible policy of allowing my employees to bring children to work if necessary, passage of this bill would allow me to offer these parents a better option — an opportunity to accumulate a bank of paid time off that could be used for unexpected emergencies like these. Given the opportunity, I think many employees would choose to use paid compensatory time for situations such as this rather than bringing their children to work or taking unpaid time off.
Some may argue that employers support this legislation as a way to exploit their workforce. Nothing could be further from the truth. Employers are genuinely interested in providing employees with flexibility to meet family and personal commitments and this legislation would give me, as an employer, an additional tool to help me meet the needs of my employees.
Would this change in law be earth shattering? No. But it is a common sense step in the right direction to help employers create a more satisfied workforce. Furthermore, it is hard to see how employees would be at risk with all of the bill's many employee protections. For example, employees can choose whether or not to participate in the program at all. Any employer coercion is prohibited as is conditioning employment based on participation in a family time program. These rights may be enforced in the same way as other rights and protections of the Fair Labor Standards Act.
Likewise, employees may discontinue their participation in a family time program at any time and may "cash out" any accrued family time and receive cash payments instead. Employees are also free to use any accrued family time so long as the use of the time does not unduly disrupt the employers business — the same standard applicable to government employees. To further protect employees, family time could only be offered pursuant to a written agreement between the employer and employee that is entered into knowingly and voluntarily.
These provisions provide significant protection to employees. But, could some employer somewhere somehow find a way around these protections? Perhaps. But I think, as an employer myself, this will be very rare and it does not follow that because this is a remote possibility, Congress should deny hundreds of thousands of employees in the private sector the option of choosing family time in lieu of cash payments for overtime work.
Furthermore, the bill is drafted as an experiment: it sunsets after five years. Congress must affirmatively reauthorize the program or it will expire. Any problems that develop in implementation of family time can be revisited in such a reauthorization.
Given the compelling need for more employees to have more flexibility in the workplace, the worst thing Congress can do is to do nothing.
Thank you for your time and interest in this important matter. I would be glad to answer any questions you might have.
1 For an overview of these and other changes in the workforce, see Employment Policy Foundation, Time Can Be More Important Than Money: Bring the Fair Labor Standards Act into the 21st Century (May 2, 2001).