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FEDERAL WAGE AND HOUR POLICIES IN 

THE TWENTY–FIRST CENTURY ECONOMY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

COMMITTEE ON EDUCATION 

AND THE WORKFORCE 

U.S. HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD IN WASHINGTON, DC, FEBRUARY 16, 2017 

Serial No. 115–6 

Printed for the use of the Committee on Education and the Workforce 

( 

Available via the World Wide Web: 

www.gpo.gov/fdsys/browse/committee.action?chamber=house&committee=education 

or 

Committee address: http://edworkforce.house.gov 

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(II) 

COMMITTEE ON EDUCATION AND THE WORKFORCE 

VIRGINIA FOXX, North Carolina, Chairwoman 

Joe Wilson, South Carolina 

Duncan Hunter, California 

David P. Roe, Tennessee 

Glenn ‘‘GT’’ Thompson, Pennsylvania 

Tim Walberg, Michigan 

Brett Guthrie, Kentucky 

Todd Rokita, Indiana 

Lou Barletta, Pennsylvania 

Luke Messer, Indiana 

Bradley Byrne, Alabama 

David Brat, Virginia 

Glenn Grothman, Wisconsin 

Steve Russell, Oklahoma 

Elise Stefanik, New York 

Rick W. Allen, Georgia 

Jason Lewis, Minnesota 

Francis Rooney, Florida 

Paul Mitchell, Michigan 

Tom Garrett, Jr., Virginia 

Lloyd K. Smucker, Pennsylvania 

A. Drew Ferguson, IV, Georgia 

Robert C. ‘‘Bobby’’ Scott, Virginia 

Ranking Member 

Susan A. Davis, California 

Rau ́l M. Grijalva, Arizona 

Joe Courtney, Connecticut 

Marcia L. Fudge, Ohio 

Jared Polis, Colorado 

Gregorio Kilili Camacho Sablan, 

Northern Mariana Islands 

Frederica S. Wilson, Florida 

Suzanne Bonamici, Oregon 

Mark Takano, California 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Donald Norcross, New Jersey 

Lisa Blunt Rochester, Delaware 

Raja Krishnamoorthi, Illinois 

Carol Shea-Porter, New Hampshire 

Adriano Espaillat, New York 

Brandon Renz, Staff Director 

Denise Forte, Minority Staff Director 

SUBCOMMITTEE ON WORKFORCE PROTECTIONS 

BRADLEY BYRNE, Alabama, Chairman 

Joe Wilson, South Carolina 

Duncan Hunter, California 

David Brat, Virginia 

Glenn Grothman, Wisconsin 

Elise Stefanik, New York 

Francis Rooney, Florida 

A. Drew Ferguson, IV, Georgia 

Mark Takano, California, 

Ranking Member 

Rau ́l M. Grijalva, Arizona 

Alma S. Adams, North Carolina 

Mark DeSaulnier, California 

Donald Norcross, New Jersey 

Raja Krishnamoorthi, Illinois 

Carol Shea-Porter, New Hampshire 

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C O N T E N T S 

Page 

Hearing held on February 16, 2017 ....................................................................... 1 

Statement of Members: 

Byrne, Hon. Bradley, Chairman, Subcommittee on Workforce Protections 1 

Prepared statement of ............................................................................... 4 

Takano, Hon. Mark, Ranking Member, Subcommittee on Workforce Protections ........................................................................................................... 5 

Prepared statement of ............................................................................... 7 

Statement of Witnesses: 

Brantley, Mr. Andy, President and CEO, College and University Professional Association for Human Resources, Knoxville, TN ........................... 31 

Prepared statement of ............................................................................... 33 

Riner, Ms. Rhea L., President, Rhea Lana’s Franchise Systems, Inc., 

Conway, AR ................................................................................................... 9 

Prepared statement of ............................................................................... 12 

Stettner, Mr. Andrew, Senior Fellow, The Century Foundation .................. 19 

Prepared statement of ............................................................................... 21 

Walters, Ms. Christine, Sole Proprietor, Fivel Company, Westminster, 

MD .................................................................................................................. 42 

Prepared statement of ............................................................................... 44 

Additional Submissions: 

Adams, Hon. Alma S., a Representative in Congress from the State 

of North Carolina: 

Letter dated February 16, 2017, from National Women’s Law Center 57 

Chairman Byrne: 

Letter dated February 15, 2017, from Associated Builders and Contractors, Inc. (ABC) ................................................................................ 94 

Prepared statement of the National Association of Convenience 

Stores and the Society of Independent Gasoline Marketers of America ............................................................................................................ 96 

DeSaulnier, Hon. Mark, a Representative in Congress from the State 

of California: 

Letter dated February 14, 2017, from Business for a Fair Minimum 

Wage ....................................................................................................... 78 

Ms. Riner: 

Plaintiffs’ Opposition to Defendant’s Motion for Summary Judgment 

and Cross-motion for Summary Judgment .......................................... 129 

Shea-Porter, Hon. Carol, a Representative in Congress from the State 

of New Hampshire: 

Letter dated February 16, 2017, from National Employment Law 

Project ..................................................................................................... 64 

Mr. Takano: 

Letter dated February 13, 2017, from the American Sustainable Business Council ........................................................................................... 92 

Letter dated February 14, 2017, from Jobs With Justice ...................... 83 

Letter dated February 15, 2017, from the National Partnership for 

Women and Families ............................................................................. 89 

Letter dated February 16, 2017, from the Economic Policy Institute .. 86 

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FEDERAL WAGE AND HOUR POLICIES IN 

THE TWENTY–FIRST CENTURY ECONOMY 

Thursday, February 16, 2017 

U.S. House of Representatives 

Subcommittee on Workforce Protections 

Committee on Education and the Workforce 

Washington, D.C. 

The subcommittee met, pursuant to call, at 10:01 a.m., in room 

2175, Rayburn House Office Building, Hon. Bradley Byrne [Chairman of the subcommittee] presiding. 

Present: Representatives Byrne, Grothman, Stefanik, Rooney, 

Takano, Adams, DeSaulnier, Norcross, Krishnamoorthi, and SheaPorter. 

Also present: Chairwoman Foxx and Ranking Member Scott. 

Staff Present: Bethany Aronhalt, Press Secretary; Courtney 

Butcher, Director of Member Services and Coalitions; Ed Gilroy, 

Director of Workforce Policy, Jessica Goodman, Legislative Assistant; Callie Harman, Legislative Assistant; Nancy Locke, Chief 

Clerk; John Martin, Professional Staff Member; Dominique McKay, 

Deputy Press Secretary; James Mullen, Director of Information 

Technology; Krisann Pearce, General Counsel; Brandon Renz, Staff 

Director; Molly McLaughlin Salmi, Deputy Director of Workforce 

Policy; Alissa Strawcutter, Deputy Clerk; Olivia Voslow, Staff Assistant; Joseph Wheeler, Professional Staff Member; Tylease Alli, 

Minority Clerk/Intern and Fellow Coordinator; Austin Barbera, Minority Press Assistant; Michael DeMale, Minority Labor Detailee; 

Nicole Fries, Minority Labor Policy Associate; Christine Godinez, 

Minority Staff Assistant; Eunice Ikene, Labor Policy Advisor; Kevin 

McDermott, Minority Senior Labor Policy Advisor; Richard Miller, 

Minority Senior Labor Policy Advisor; Udochi Onwubiko, Minority 

Labor Policy Counsel; Veronique Pluviose, Minority Civil Rights 

Counsel; and Elizabeth Watson, Minority Director of Labor Policy. 

Chairman BYRNE. The subcommittee will come to order. 

Everybody will take their seats. A quorum is present. The subcommittee is in order. 

Good morning. Welcome to the first hearing of the Workforce 

Protections Subcommittee in the 115th Congress. 

Now, it says ‘‘workforce protections.’’ Let’s make sure we know 

exactly what we’re talking about. We are talking about the good, 

hardworking people of the United States of America. And so all of 

us on this Committee, that’s our focus. And we appreciate everyone 

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2 

who’s come to be with us today, and we appreciate the fine members of the subcommittee. 

I’d like to begin by introducing my Republican colleagues on the 

subcommittee for this Congress. Not all of them are here yet, but 

let me go ahead and introduce them. 

Representative Joe Wilson from South Carolina’s Second District. 

Joe has served on the Committee for 16 years. He’s also served in 

the Army Reserves and the South Carolina Army National Guard. 

I’m pleased to also serve with him on the House Armed Services 

Committee. 

Representative Duncan Hunter represents East and Northern 

County San Diego. Duncan, who I also serve with on Armed Services, served our country in the United States Marine Corps and has 

since been an advocate for national security here in the United 

States Congress. 

Representative Dave Brat from Virginia’s Seventh District. Dave 

served as chairman of the economics department at RandolphMacon College before joining us here in Congress. 

Representative Mike Bishop from Michigan’s Eighth District. 

Mike previously served as Michigan’s Senate majority leader and 

as a practicing lawyer. 

Representative Glenn Grothman from Wisconsin’s Sixth District. 

Glenn previously served in the Wisconsin State Senate and has 

been an advocate for effective government oversight in Congress. 

Representative Elise Stefanik represents the North Country of 

New York. Elise and I work together on many priorities, given the 

fact that we share service on Armed Services together. She has 

been a very effective member of that body and of this body. 

One of our new members, Representative Francis Rooney, who I 

know is here, from Florida’s 19th District. Francis served as U.S. 

Ambassador to the Holy See under President George W. Bush, and 

has worked in the construction industry, creating jobs, since 1984, 

including creating a few jobs in my district, which I appreciate. 

Representative Drew Ferguson from Georgia’s Third District. 

Drew established a family dental practice before coming to Congress and is the former mayor of West Point, Georgia. 

Now, not on anybody’s list but perhaps very importantly to all 

of us, we have with us the chair of our full Committee, Dr. Virginia 

Foxx. Dr. Foxx has been in Congress for a number of years. She 

and I served together on the Rules Committee. If you want to really get to know somebody, serve on the Rules Committee, because 

we spend a lot of time together. And she’s been a very effective 

member of this Committee and has done a great job for us as 

Chairwoman of the Committee. 

I would also like to congratulate the Ranking Member, Mark 

Takano, on his selection to serve as the subcommittee senior Democrat. He and I have traveled before on CODELs. We’ve worked together on a number of things. And we had a little meeting the 

other day, but I want to reiterate that I am looking forward to 

working with you. 

There are important issues under this subcommittee’s jurisdiction, and I know that we won’t always agree on how to tackle those 

issues, but as I said after our meeting the other day with Mr. 

Takano, I want to emphasize my commitment to working together, 

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3 

finding common ground, and advancing the positive solutions that 

the American people deserve. 

In recent years, working families and small businesses have 

faced significant challenges as they struggle through the slowest 

economic recovery since the Great Depression. Since 2009, the 

economy grew at an average annual pace of just 1-1/2 percent. The 

net result is limited opportunity for hardworking men and women. 

In fact, the labor force participation rate has dropped to 62.9 percent, nearly the lowest level in decades. Wage growth remains 

largely stagnant, as the average hourly earnings for today’s worker 

is roughly the same as in 2009. Meanwhile, 7.6 million Americans 

are searching for work, and nearly six million individuals are working part-time hours when what they really need are full-time jobs. 

We cannot accept this as the new normal. 

The American people have clearly spoken, and they expect their 

leaders in Washington to put the country on a better path and finally get our economy moving again, which means more and better 

paying jobs. That’s why Republicans are committed to advancing a 

bold agenda that will remove barriers to job creation and empower 

more Americans to reach their full potential. 

As part of that effort, this subcommittee will examine the policies 

impacting the American workforce so we can assure that those policies support rather than hinder the ability of workers to succeed 

and employers to grow and hire. A key part of this effort will be 

robust oversight of the policies under our jurisdiction, and as 

Chairwoman Foxx has made clear, a commitment to holding the 

administration accountable for how it enforces the law. 

There is too much at stake for families and small businesses to 

leave any stone unturned, whether it’s examining policies that are 

intended to promote safety and health in the workplace, holding 

Federal contractors accountable, or assuring wage determinations 

under the Davis-Bacon Act are done accurately and fairly. 

We have a lot of ground to cover in the coming months and, of 

course, an important part of our agenda, and the reason for today’s 

hearing, will be taking a close look at a law that affects practically 

every workplace and every worker in this country: The Fair Labor 

Standards Act. The law was signed over 80 years ago to address 

the challenges that existed during the Great Depression. It established important protections for workers, and it has served as the 

foundation of our Nation’s wage and hour policies ever since. 

A lot has changed over those 80 years. For starters, things that 

are part of our daily life didn’t even exist back then, smartphones, 

iPads, and the internet, just to name a few. Advancements in technology have led to virtual workplaces, entire new industries, and 

flexible, innovative work arrangements. Most recently, we’ve seen 

the rapid rise in the so-called ‘‘sharing’’ economy. 

The point is the American workforce has transformed dramatically, and the challenges facing workers and employers today are 

different than they were in the 1930s. However, our labor policies 

have failed to adapt. The rules and regulations surrounding the 

Fair Labor Standards Act are simply outdated. At the same time, 

small business owners are getting tied up in a complex regulatory 

maze that forces them to confront costly litigation and limits their 

ability to expand. It’s clear our Nation’s wage and hour rules were 

CEWDOCROOM with DISTILLER

4 

designed for another era and no longer reflect the realities of the 

twenty-first century workforce. 

That’s why it is so disappointing that the previous administration missed an opportunity to streamline and modernize these important worker protections. Instead, the Obama administration 

spent its time and resources advancing an extreme and partisan 

overtime rule that would stifle workplace flexibility and limit opportunities for career advancement. 

I can tell you that small businesses in my district are breathing 

a sigh of relief that this fundamentally flawed rule was blocked by 

a Federal judge. Countless small business owners were worried 

that they would have to cut their employees’ hours or even lay people off. Colleges, universities, and nonprofits were bracing for an 

especially devastating impact. As an example for my home State, 

the rule would have cost the University of Alabama System $17 

million in just the first year, costs that would have likely been 

passed on to students in the form of higher tuition and fees, a topic 

that is very important to our full Committee. 

Fortunately, we have a new administration that understands 

how misguided regulations often hurt the very individuals they’re 

intended to help. We also have a new Congress that’s working to 

advance an agenda that will foster economic growth and deliver results for the American people. Bringing our Nation’s wage and 

hour rules into the twenty-first century will be an important part 

of that conversation. 

I look forward to hearing from our witnesses, who can speak 

more to the challenges resulting from an outdated law and the 

need for positive reforms that will improve the lives of hardworking 

Americans. 

With that, I will now yield to the Ranking Member for his opening remarks. 

[The statement of Chairman Byrne follows:] 

Prepared Statement of Hon. Bradley Byrne, Chairman, Subcommittee on 

Workforce Protections 

In recent years, working families and small businesses have faced significant challenges as they’ve struggled through the slowest economic recovery since the Great 

Depression. Since 2009, the economy grew at an average annual pace of just 1.5 percent. The net result is limited opportunity for hardworking men and women. 

In fact, the labor force participation rate has dropped to 62.9 percent—nearly the 

lowest level in decades. Wage growth remains largely stagnant, as the average hourly earnings for today’s worker is roughly the same as in 2009. Meanwhile, 7.6 million Americans are searching for work, and nearly six million individuals are working part-time hours when what they really need are full-time jobs. 

We cannot accept this as the new normal. The American people have clearly spoken, and they expect their leaders in Washington to put the country on a better 

path and finally get the economy moving again, which means more and better paying jobs. 

That’s why Republicans are committed to advancing a bold agenda that will remove barriers to job creation and empower more Americans to reach their full potential. As part of that effort, this subcommittee will examine the policies impacting 

America’s workforce, and ensure those policies support, rather than hinder, the ability of workers to succeed and employers to grow and hire. 

A key part of this effort will be robust oversight of the policies under our jurisdiction, and as Chairwoman Foxx has made clear, a commitment to holding the administration accountable for how it enforces the law. There is too much at stake for 

families and small businesses to leave any stone unturned, whether it’s examining 

policies that are intended to promote safe and healthy workplaces, holding federal 

CEWDOCROOM with DISTILLER

5 

contractors accountable, or ensuring wage determinations under the Davis-Bacon 

Act are done accurately and fairly. 

We have a lot of ground to cover in the coming months. And of course, an important part of our agenda—and the reason for today’s hearing—will be taking a close 

look at a law that affects practically every workplace in the country: the Fair Labor 

Standards Act. The law was signed over eighty years ago to address the challenges 

that existed during the Great Depression. It established important protections for 

workers, and has served as the foundation of our nation’s wage and hour policies 

ever since. 

A lot has changed in those eighty years. For starters, things that are part of our 

daily life didn’t even exist back then—smartphones, iPads, and the internet, just to 

name a few. Advancements in technology have led to virtual workplaces, entire new 

industries, and 

flexible, innovative work arrangements. Most recently, we’ve seen the rapid rise 

in the so-called ‘‘sharing’’ economy. 

The point is the American workforce has transformed dramatically, and the challenges facing workers and employers today are different than they were in the 

1930s. However, our labor policies have failed to adapt. The rules and regulations 

surrounding the Fair Labor Standards Act are simply outdated. At the same time, 

small business owners are getting tied up in a complex regulatory maze that forces 

them to confront costly litigation and limits their ability to expand. 

It is clear our nation’s wage and hour rules were designed for another era and 

no longer reflect the realities of the 21st century workforce. That’s why it’s so disappointing that the previous administration missed an opportunity to streamline 

and modernize these important worker protections. Instead, the Obama administration spent its time and resources advancing an extreme and partisan overtime rule 

that would stifle workplace flexibility and limit opportunities for career advancement. 

I can tell you that small businesses in my district are breathing a sigh of relief 

that this fundamentally flawed rule was blocked by a federal judge. Countless small 

business owners were worried that they would have to cut their employees’ hours 

or even lay people off. Colleges, universities, and non-profits were bracing for an especially devastating impact. As an example for my home state, the rule would have 

cost the University of Alabama System 17 million dollars in just the first year, costs 

that would have likely been passed on to students in the form of higher tuition and 

fees. 

Fortunately, we have a new administration that understands how misguided regulations often hurt the very individuals they’re intended to help. We also have a 

new Congress that is working to advance an agenda that will foster economic 

growth and deliver results for the American people. 

Bringing our nation’s wage and hour rules into the 21st century will be an important part of the conversation. I look forward to hearing from our witnesses who can 

speak more to the challenges resulting from an outdated law and the need for positive reforms that will improve the lives of hardworking Americans. 

Mr. TAKANO. Thank you, Chairman Byrne, and congratulations 

to you on your new position as chairman of this subcommittee. And 

I too want to express my full intention to work with you on areas 

where we can agree. Where there’s common ground, we certainly 

should work together. But on areas where we disagree, we’ll have 

to stand our ground. But let it be known that there is a spirit of 

comity between us, and look forward to—you are definitely indeed 

a gentleman of the south and a gentleman at that. So thank you. 

I would like to introduce the members of the—the Democratic 

members of the subcommittee, not all of whom are here. 

Raul Grijalva represents the Third District of Arizona. From 

1974 to 1986, Mr. Grijalva served on the Tucson Unified School 

District Board—Tucson Unified School District Governing Board, 

including six years as chairman. In 1988, he was elected to the 

Pima County Board of Supervisors, where he served for the next 

15 years. 

Alma Adams represents North Carolina’s 12th District. She got 

her start serving on the Greensboro City Council as well as—exCEWDOCROOM with DISTILLER

6 

cuse me. She started on the Greensboro City School Board as well 

as the Greensboro City Council. Before coming to Congress, she 

served a decade in the North Carolina House of Representatives, 

State House of Representatives. 

Mark DeSaulnier represents California’s 11th District and is a 

veteran of California politics. He served on the Concord City Council from 1991 to 2006 and as mayor of Concord in 1993. He also 

served in the California State Assembly and State Senate. 

Donald Norcross, who is present with us, represents New Jersey’s First District. His background as a member of the International Brotherhood of Electrical Workers, former president of the 

Southern New Jersey Building Trades Council, and president of the 

Southern New Jersey AFL-CIO Central Labor Council accords him 

a wealth of experience and knowledge that he can bring to the subcommittee. He served in both the New Jersey State Senate and Assembly before becoming a member of Congress. 

Raja Krishnamoorthi represents Illinois’ Eighth District. He has 

previously held the positions both of Deputy State Treasurer and 

Special Assistant Attorney General for the State of Illinois. 

Carol Shea-Porter represents New Hampshire’s First District 

and is returning to our Committee for her second tour of duty. During college, she worked in a factory. She also worked previously 

both as a social worker and community college professor. 

We look forward to working with our majority members on this 

subcommittee to find areas of common ground that allow us to 

move our Nation forward. 

And now, Mr. Chairman, I’ll move on with my opening statement. 

I want to thank you again, Mr. Chairman. I do look forward to 

working with you to address the challenges facing America’s workers. It is my hope that the work we do together in this subcommittee will ensure that the rules of our economy help American 

workers and businesses prosper together. 

Today’s hearing is on wage and hour policy in the twenty-first 

century workplace. In the past three Congresses, the majority has 

called eight hearings on wage and hour policies, but in those hearings we have not considered a single policy to raise the pay for millions of hardworking Americans who are struggling to make ends 

meet. 

If past is prologue, I expect we are going to hear from our friends 

in the majority today about the Fair Labor Standards Act and how 

it is stifling America’s job creators. But before we launch into that 

discussion, I’d like to take a moment to step back and look at the 

facts. 

Over the past four decades, worker productivity has grown by 

more than 70 percent. You might think a rising tide would lift all 

boats, but it hasn’t happened. Since 1979, wages for the top one 

percent have grown by 138 percent, while wages for the bottom 90 

percent have grown by only 15 percent. Now, workers are more 

productive than ever, but it’s been a long time since most Americans have gotten a raise. So tell me, who is being stifled? 

I wholeheartedly agree with the title of this hearing. We do need 

to update wage and hour policy for the twenty-first century. That 

should mean strengthening our wage and hour policies to ensure 

CEWDOCROOM with DISTILLER

7 

that hardworking Americans get a fair day’s pay for a fair day’s 

work. 

Too many Americans today can’t afford to buy a home, send their 

children to college, or save for retirement. It should not be this 

way. American workers’ productivity has led to tremendous economic growth; but, unfortunately, the rules are written so that the 

economy delivers only for those at the very top. Here in Congress, 

we have the power and the responsibility to fix that. However, despite our requests, last Congress, the majority did not hold a single 

hearing on what we can do to ensure that Americans in the middle 

and the bottom rungs of the economic ladder get a fair shake. 

They refused to raise the minimum wage and fought against the 

update to the overtime threshold, which would have put more pay 

in the pockets of millions of hardworking Americans. And the majority refused to bring the twenty-first century workplace in line 

with the needs of the twenty-first century workforce by adopting 

sensible solutions to prevent predictable—not prevent, to provide— 

to provide predictable schedules, paid sick days, and paid family 

leave, and finally guarantee equal pay for equal work, which are 

long overdue. 

These are the updates to our wage and hour policy that would 

make a real difference to hardworking Americans. There is simply 

no need to make the false choice between employer innovation and 

rules that make our economy fair for everyone. We can have both. 

There are plenty of examples of businesses that do very well 

while playing by the rules. In fact, treating workers fairly has been 

shown again and again to promote employee retention and productivity. I hope our witnesses today will help us explore the future 

of work that is both innovative and fairly rewards all hardworking 

Americans. 

Thank you, Mr. Chairman. I yield back the remainder of my 

time. 

[The statement of Mr. Takano follows:] 

Prepared Statement of Hon. Mark Takano, Ranking Member, Subcommittee 

on Workforce Protections 

Thank you, Chairman Byrne. I look forward to working with you to address the 

challenges facing American workers. It is my hope that the work we do together in 

this subcommittee will ensure that the rules of our economy help American workers 

and businesses prosper together. 

Today’s hearing is on wage and hour policy in the 21st century workplace. In the 

past three Congresses, the Majority has called eight hearing on wage and hour policies—but in those hearings we have not considered a single policy to raise the pay 

for millions of hardworking Americans who are struggling to make ends meet. 

If past is prologue, I expect we are going to hear from our friends in the Majority 

today that the Fair Labor Standards Act is stifling America’s job creators. 

But before we launch into that discussion, I’d like to take a moment to step back 

and look at the facts. Over the past four decades worker productivity has grown by 

more than 70 percent. 

You might think a rising tide would lift all boats, but that hasn’t happened. Since 

1979, wages for the top 1 percent have grown by 138 percent, while wages for the 

bottom 90 percent have grown by only 15 percent. 

Workers are more productive than ever, but it’s been a long time since most 

Americans have gotten a raise. 

So tell me, who is being stifled? 

I wholeheartedly agree with the title of this hearing – we need to update wage 

and hour policy for the 21st century. That should mean strengthening our wage and 

hour policies to ensure that hardworking Americans get a fair day’s pay for a fair 

day’s work. 

CEWDOCROOM with DISTILLER

8 

Too many Americans today can’t afford to buy a home, send their children to college, or save for retirement. It should not be this way. American workers’ productivity has led to tremendous economic growth. But unfortunately, the rules are written so that the economy delivers only for those at the very top. Here in Congress, 

we have the power – and a responsibility – to fix that. 

However, despite our requests, last Congress, the Majority did not hold a single 

hearing on what we can do to ensure that Americans in the middle and the bottom 

rungs of the economic ladder get a fair shake. 

They refused to raise the minimum wage and fought against the update to the 

overtime threshold – which would have put more pay into the pockets of millions 

of hardworking Americans. And the Majority refused to bring the 21st century 

workplace in line with the needs of the 21st century workforce by adopting sensible 

solutions to provide predictable schedules, paid sick days and paid family leave, and 

finally guarantee equal pay for equal work, which are long overdue. 

These are the updates to our wage and hour policy that would make a real difference to hardworking Americans. 

There is simply no need to make the false choice between employer innovation 

and rules that make our economy fair for everyone. We can have both. There are 

plenty of examples of businesses that do very well while playing by the rules. In 

fact, treating workers fairly has been shown again and again to promote employee 

retention and productivity. 

I hope our witnesses today will help us explore a future of work that is both innovative and fairly rewards all hardworking Americans. 

Thank you, Mr. Chairman. I yield back the remainder of my time. 

Chairman BYRNE. Thank you, Mr. Takano. 

And we welcome all of the Democratic members to the subcommittee. Many of them I’ve worked with in the past. 

Mr. Krishnamoorthi, I know you’re new to Congress, but you’ve 

already made quite an impact and we appreciate having you here. 

Mr. KRISHNAMOORTHI. Thank you. 

Chairman BYRNE. Pursuant to committee rule 7(c), all subcommittee members will be permitted to submit written statements 

to be included in the permanent hearing record. 

And without objection, the hearing record will remain open for 

14 days to allow statements, questions for the record, and other extraneous material referenced during the hearing to be submitted in 

the official hearing record. 

And now, it’s my pleasure to introduce today’s witnesses. 

Ms. Rhea Lana Riner is president of Rhea Lana’s Franchise Systems, Inc. She will testify on behalf of the International Franchise 

Association. Mr. Andrew Stettner is a senior fellow with The Century Foundation. Mr. Andy Brantley is president and chief executive officer of the College and University Professional Association 

for Human Resources. Ms. Christine Walters is an independent 

human resources and employment law consultant and sole proprietor of the FiveL Company. She will testify on behalf of the Society 

for Human Resource Management that years ago I used to be a 

member of. So welcome. 

I will now ask our witnesses to raise your right hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

Let the record reflect the witnesses answered in the affirmative. 

Okay. Before I recognize you, I need to go through the lighting 

system so you understand how it works. And I apologize for having 

to do this, but it helps things go if we do this. 

You each will have five minutes to present your testimony. When 

you begin, the light in front of you will turn green. When one 

CEWDOCROOM with DISTILLER

9 

minute is left, the light will turn yellow. When your time has expired, the light will turn red. At that point, I will ask you to wrap 

up your remarks as best you are able. After you have testified, 

members will each have five minutes to ask questions. 

Now, I don’t intend to be heavy with the gavel, by the way. If 

you’re getting close, I’m going to try to let you finish up, and try 

to do the best you can, because we really want to hear your testimony. And I certainly want to let the members have their full five 

minutes. And if we go over a little bit, that’s okay, but let’s try to 

stay within that. 

Okay. We’re going to start with Ms. Riner. You’re recognized for 

five minutes. Welcome. 

TESTIMONY OF RHEA LANA RINER, PRESIDENT, RHEA LANA’S 

FRANCHISE SYSTEMS, INC., CONWAY, AR, TESTIFYING ON 

BEHALF OF THE INTERNATIONAL FRANCHISE ASSOCIATION 

Ms. RINER. Good morning, Chairman Byrne—and happy birthday, by the way—Ranking Member Takano. Congratulations to 

both of you on your first subcommittee hearings. 

And distinguished members of the subcommittee, my name is 

Rhea Lana Riner and I’m the CEO and founder of Rhea Lana, Inc., 

and Rhea Lana’s Franchise Systems. Thank you for taking an interest in my story and my struggle to protect the rights of small 

business owners and moms like myself across the Nation. It is my 

privilege to testify on behalf of the International Franchise Association today. 

In 1997, I began my small business as a young mom after my 

husband changed careers. Like many people, I had a passion for 

fashion, but on a limited budget. We simply could not afford to 

dress our children as I hoped. I also knew many other moms who 

experienced the same challenge, so I came up with an idea that 

would help all of us. 

I invited a few friends to a small event in my living room to buy 

and sell our children’s used clothing. From that humble beginning 

of moms working together, Rhea Lana’s was born and grew. From 

the positive feedback, we quickly realized that there was an eager 

market among families of all kinds for gently used children’s clothing. My heart went out to families with budget struggles, trying to 

provide high-quality items for their kids. 

The moms, grandmoms, and husbands who join together to host 

Rhea Lana’s consignment events create a marketplace in which 

their families can participate, with Rhea Lana’s acting as the 

facilitator. In so doing, we play a small role in helping these families succeed. Today, we have 80 franchises operating in 23 States, 

and we look forward to continued growth. 

Unfortunately, after many years of running our consignment 

events, our business model is in peril because we have been drawn 

into an extended legal battle that is now in its sixth year. In the 

spring of 2011, Arkansas Department of Labor officials began investigating Rhea Lana’s to determine if we were violating any laws 

by inviting moms to volunteer at our events. We cooperated fully 

and spent a ton of money in legal fees, but we received a favorable 

response from the State of Arkansas and thought the story was 

over. 

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But then in January of 2013, we were contacted by the U.S. Department of Labor informing us that it was opening its own investigation into whether our volunteers were, in fact, employees. Our 

initial meeting with the DOL was held in Little Rock on February 

28, 2013. Once again, we fully cooperated and we provided the 

DOL with contact information for ten moms who had participated 

as consigner volunteers. We assumed that once DOL spoke with 

these women and recognized that they were participating on a very 

limited basis for their own benefit, DOL would naturally determine 

that they should not be considered employees. 

Unfortunately, the question was not so easily settled. Instead, 

DOL officials requested all of our payroll records going back two 

years, submitted formal questions that required more legal assistance to respond, and they showed up at one of our events to conduct interviews. Every consigner volunteer interviewed assured 

them they voluntarily chose to participate in order to help their 

families and they expected no compensation for doing so. 

In spite of this, DOL determined that the moms should be considered employees. Incredibly, DOL even sent letters to our 

consigner volunteers suggesting they had the right to sue Rhea 

Lana’s for backpay. None of our volunteers took such action against 

us, despite DOL’s encouragement to sue us. But DOL officials 

would not be deterred. Without a formal hearing or other procedural safeguards, the DOL arbitrarily determined that Rhea Lana’s 

had violated the Fair Labor Standards Act. 

In August 2013, the DOL sent us a determination letter citing 

legal provisions that our attorney estimated penalties could reach 

$3.6 million. Receiving this letter was terrifying. It was then I decided I had to fight back and we challenged the DOL in court. The 

DOL initially won in district court, arguing that we could not challenge the agency’s determination because it was not a final agency 

action. However, in a ruling last June, the D.C. Circuit Court reversed and held that DOL’s action could be challenged in court. 

The D.C. Circuit’s ruling was the first positive step in 4-1/2 years 

of fighting to protect the future of my small business. 

So we’re continuing to fight for a mother’s right to use her personal time as she sees fit to help her family. And if we lose, Rhea 

Lana’s will no longer be able to provide its valuable service to families in need. 

Meanwhile, the Department of Labor has also aggressively been 

trying to apply broader joint employment liability to all small businesses. Some have minimized the joint employment concerns of 

franchise business owners, but expanded joint employment liability 

means more operating costs, more legal costs, decreased value of 

business, less compliance assistance, and less growth for locally 

owned franchise businesses. 

Mr. Chairman, no one can assure any franchise business owner 

that their business may not unintentionally violate a broad liability 

standard that is based on indirect and even unexercised control. 

We need the new DOL to rescind the January 2016 interpretation 

and return to the preexisting joint employment test. But we also 

need Congress to clarify a definition of employer that thinks better 

of the motivations of franchise business owners. 

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Mr. Chairman, I never intended to be a businessperson, but I 

have been sincerely thankful for the opportunity to build and grow 

a business that helps so many families have what they otherwise 

could not afford, but we need Congress’ help to achieve fairness in 

our ever-evolving economy. 

Thank you for your leadership on behalf of all small businesses, 

and I would be happy to answer any questions. 

[The statement of Ms. Riner follows:] 

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Chairman BYRNE. Thank you, Ms. Riner. 

The chair now recognizes Mr. Stettner for five minutes. 

TESTIMONY OF ANDREW STETTNER, SENIOR FELLOW, THE 

CENTURY FOUNDATION, WASHINGTON, D.C. 

Mr. STETTNER. Good morning, Chairman Byrne, Ranking Member Takano, and other members of the committee. 

I’m a senior fellow at The Century Foundation, an independent 

nonpartisan think tank with offices here in Washington and in 

New York City. Thank you for the opportunity to speak today to 

the Committee about the changing nature of the economy and the 

need to modernize our wage and hour laws. 

For decades, Americans have been afflicted by stagnating wages 

and a rise in low-wage work. Since 1976, as Mr. Takano said, workers have increased their productivity by 73.4 percent, but hourly 

paychecks have only gone up by 11 percent. 

Next slide, please. 

The manufacturing sector has shrunk dramatically. In its place, 

working Americans have turned to what I call fast-growing 

RASHH sectors of the economy. These RASHH jobs—retail, administrative, social assistance, hospitality, and health care—pay less 

than $15 per hour and offer less than 30 hours per week. The Fair 

Labor Standards Act could be a powerful lever against this crisis 

of wage stagnation. 

In the 1960s, the minimum wage was equivalent to half of the 

average weekly wage. Today, it is just a third. An increase in the 

minimum wage to $12 an hour, phased in by 2020, would provide 

raises of $2,300 per worker to 35 million working Americans. This 

increase too can eliminate the discriminatory subminimum wage 

for tip workers. 

Meanwhile, the number of workers guaranteed overtime rights 

with a salary threshold plummeted from 12.6 million protected in 

1979 to 3.5 million by 2014. The rule promulgated by the Labor Department to restore the salary threshold would deliver raises of 

$1.2 billion and cement overtime protections for 13.1 million workers. The rules would have had the added benefit of providing a 

bright-line test that distinguishes those salary workers eligible for 

overtime. 

Now, the Department of Labor only has 1,000 investigators to enforce the law at 7.3 million establishments. Targeted enforcement 

focuses on industries where research has surfaced high levels of 

violations where the changing economy makes certain groups more 

vulnerable. This is the only way for the Department of Labor to use 

its resources to recover significant amounts of unpaid wages while 

moving industry practices. Using these targeted methods, the Department of Labor increased the amount recovered per investigation from $785 per worker in 2009 to $1,000 in 2016. But more 

must be done. 

The twentieth century economy was dominated by large firms 

who used traditional employment relationships to control every aspect of production. Now, the twenty-first century management 

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selves of their employment law responsibilities. The rise in subcontracting, use of third-party administrators, franchising, and staffing firms leaves workers’ heads spinning when they try to find out 

who is ultimately responsible for their pay. 

The Department of Labor’s Administrator’s Interpretation on 

joint employment went a long way to clarifying what courts have 

said repeatedly. Those joint employers who have economic control 

over employees must ensure that wage and hour laws are followed. 

This is already causing welcome change. For example, the Department of Labor and Subway agreed to a voluntary program of compliance education and software-based flagging of possible violations 

at their locations. 

Now, as many as 30 percent of all workers are misclassified as 

independent contractors, forfeiting their wage and hour rights. The 

reality is that employers have moved millions of Americans into 

1099 status who should not, by law, be paid that way. Too often, 

workers are misclassified as independent contractors based on one 

element, such as owning their own tools, even though they are not 

in business for themselves. The Department of Labor’s recent AI on 

worker misclassification was put in place to give employers numerous examples of such cases to avoid. 

Now, there is much talk about the need for workplace flexibility. 

I assert that the Fair Labor Standards Act is a very flexible piece 

of law already that can be adapted to innovations in business, including telecommuting and, yes, the gig economy, without sacrificing workers’ rights. 

Now, in this context of the need for strengthened wage and hour 

enforcement, the nomination of Mr. Andrew Puzder for Secretary 

of Labor raised deep concerns about the future ability of the Department of Labor to implement much-needed wage and hour reform. Every past Republican nominee for Secretary of Labor 

pledged to Congress that they would uphold the unique mission of 

the Department of Labor to enforce the Fair Labor Standards Act, as well as 180 other laws entrusted to the Department. Whoever 

Mr. Trump picks to replace Mr. Puzder should share that same 

commitment to fundamental employment laws and the rights of all 

workers, regardless of race, gender, or immigration status. 

In conclusion, in order for tens of millions of additional workers 

across the country to share in our Nation’s economic prosperity, 

Federal wage and hour laws need to be strengthened and vigorously enforced. 

Thank you for your attention. 

[The statement of Mr. Stettner follows:] 

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Chairman BYRNE. Thank you, Mr. Stettner. 

Mr. Brantley, you are recognized for five minutes. 

TESTIMONY OF ANDY BRANTLEY, PRESIDENT AND CEO, COLLEGE AND UNIVERSITY PROFESSIONAL ASSOCIATION FOR 

HUMAN RESOURCES, KNOXVILLE, TN 

Mr. BRANTLEY. Good morning, Chairman Byrne, Ranking Member Takano, and distinguished members of the subcommittee. 

Thank you for holding the hearing today and for the opportunity 

to testify. 

CUPA-HR serves as the voice of higher education human resources, representing more than 22,000 human resources and other 

professionals on campus and almost 2,000 colleges and universities 

across the country. Higher ed employs over 3.9 million employees 

with colleges and universities in all 50 States. 

My testimony today will focus on higher ed’s concerns with the 

Department of Labor’s recent revisions to the FLSA, the overtime 

pay requirements, and our suggestions for moving forward. To say 

that these changes have been top of mind for higher education and 

higher education institutions would be an understatement. Before 

I explain why the overtime changes have garnered so much attention from higher ed, let me say that CUPA-HR and other higher 

education associations that advocated on this issue believe that an 

increase in the minimum salary threshold is due and that the DOL 

must update salary levels and regulations from time to time to ensure compliance and that the exemptions are not abused. The current salary threshold of $23,660 is overdue for a much- needed increase, but more than doubling the threshold to $47,476, 

as was proposed by President Obama’s Department of Labor, would 

have had a tremendous negative impact for employers and employees across the country. 

As we outlined for the DOL, professionals in thousands of higher 

education positions that clearly met the duties test for exemption 

are paid less than $47,476. Positions that require bachelor’s degrees and master’s degrees, such as residence hall managers, academic advisors, mental health counselors, admissions counselors, financial aid counselors, student life professionals, alumni development professionals, and many athletics positions typically pay early 

and mid-career and sometimes even later career professionals annual salaries of less than $47,000 per year, particularly at smaller 

institutions in more rural parts of the country. 

Increasing the threshold by over 100 percent will increase annual 

expenses and lead to the reduction in services and positions. A 

quick sample from just 35 CUPA-HR member institutions estimated a cost of nearly $115 million to implement the rule in the 

first year alone. These institutions also shared with us that such 

an increase in expenses would trigger tuition hikes and reductions 

in services. 

When DOL issued the final rule, employers were just given six 

months to comply. Participation in our webinars that we held on 

this issue regarding the new regulations far surpassed any participation in CUPA-HR history. Also remarkable were the number of 

comments. For example, in just one webinar, over 400 content 

questions on things that you would think most human resource 

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professionals would know, but to add to the complexity of things 

like tracking time, salary calculations, comp time, part-time employees, and more. 

Although proponents of the rule argue that these changes could 

be made with the flip of a switch, the increased interest in our 

webinars, the extraordinary use of our resources that we created 

and the feedback that we received from across the country is evidence to the contrary. 

So what is a reasonable salary threshold? In a July 2015 survey 

we conducted, the majority response shows a salary survey level of 

either $29,172, which, by the way, is the current level, adjusted for 

inflation, or $30,004, the salary level if the DOL applied the same 

formula used to update the salary threshold in 2004. Eighty-eight 

percent of the respondents indicated that a threshold over $40,352, 

which is the median of all wage and salary workers combined, 

would be too high. These salary levels were not picked randomly, 

but according to the notice of proposed rulemaking, the DOL actually considered these as part of their proposed update. 

Finally, while we are pleased with the court’s injunction, the 

temporary injunction, it was issued just a few days before the December 1 implementation date. In an early December survey of our 

members, 28 percent had already implemented changes, while 71 

percent either implemented some changes or delayed others or delayed all changes. 

As an example, one large public institution spent over a million 

dollars changing services, holding positions vacant, just to adjust 

their payroll cycle to move formerly exempt employees to nonexempt status. This institution is now facing significant challenges 

on working hours and services performed for those employees impacted. 

We need your help to create and implement a more reasonable 

salary threshold as quickly as possible. 

Mr. Chairman, thank you again for the opportunity to testify and 

offer CUPA-HR support for the Committee’s focus on modernizing 

Federal wage and hour policies. I’ll be happy to answer any questions from you or other members of the Committee. Thank you. 

[The statement of Mr. Brantley follows:] 

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Chairman BYRNE. Thank you, Mr. Brantley. 

Ms. Walters, you are recognized for five minutes. 

TESTIMONY OF CHRISTINE WALTERS, SOLE PROPRIETOR, 

FIVEL COMPANY, WESTMINSTER, MD, TESTIFYING ON BEHALF OF THE SOCIETY FOR HUMAN RESOURCE MANAGEMENT 

Ms. WALTERS. Thank you. 

Good morning, Mr. Chairman, Ranking Member Takano, and 

Committee members. I am Christine Walters, sole proprietor of 

FiveL Company in Westminster, Maryland, where I serve as an 

independent human resources and employment law consultant. I’m 

appearing before you today on behalf of the Society for Human Resource Management, or SHRM, where I’ve been a member for 18 

years. 

I thank you for holding this hearing to examine Federal wage 

and hour policies under the FLSA. While this statute is a cornerstone of employment law, it is out of step with our modern technology-based economy, creating unnecessary regulatory burdens 

and hindering the ability of employers to be flexible and address 

contemporary employee needs. And let me explain just some of 

those challenges. 

Employers of all sizes work to classify employees correctly and 

remain in compliance with the FLSA. However, classification decisions for positions can be particularly challenging, because the statute includes both objective and subjective criteria. Therefore, an 

employer acting in good faith could mistakenly misclassify employees as exempt who, in reality, could be nonexempt or vice versa. 

Moreover, administrator’s interpretations, or AIs, on both joint employment and employee versus independent contractor classification under the FLSA have contributed to this complexity. 

The AIs rely on a broad economic realities test, which is open to 

various interpretations and gives employers no objective criteria on 

which to rely. In order to provide more clarity, SHRM believes 

these AIs should be withdrawn and the Department of Labor 

should reinstate Department opinion letters as well as provide examples in regulatory text. Opinion letters and examples enable employers to understand the Department’s view on how regulations 

might apply to their own actual and practical workplace situations. 

The stakes in improperly classifying employees are high. If an 

employer is determined to have misclassified employees, then the 

organization is required to award up to three years’ backpay for 

overtime to those employees, plus attorneys’ fees. That’s why employers do work hard to ensure that employee classifications are in 

compliance with the FLSA. Many of the small businesses and nonprofits with whom I work have limited budgets and very tight margins, and so it’s imperative that these organizations avoid lawsuits. 

Simply put, the FLSA has not kept pace with the realities of the 

twenty-first century workplace or its workforce. Today’s modern 

technology allows many employers to perform job duties when and 

where they choose. And frankly, Mr. Chairman and Committee 

members, a growing number of employees have come to expect and 

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motely after work hours. But because nonexempt employees must 

be paid for all hours worked, those hours must be closely tracked 

in order to remain in compliance with the FLSA. As a result, employers may implement policies to restrict the employees’ ability to 

work from home because of the challenges associated with tracking. 

Additionally, the FLSA makes it very difficult for employers to 

offer nonexempt employees the flexibility of a biweekly workweek. 

Because employers are required to pay overtime for hours worked 

over 40 in a workweek, an employer’s ability to offer employees the 

flexibility of, say, working 45 hours in the first week of a pay period and then 35 hours in the second week, for a total of 80 hours 

in that pay period, is not an option without incurring overtime liability. 

Private sector employers are also prohibited under current law 

from offering nonexempt employees the option of paid time off or 

comp time in lieu of overtime pay for hours worked over 40 in a 

workweek, even though public sector employees have enjoyed that 

flexibility for more than the last 30 years. 

Finally, let me turn to FLSA overtime regulations that were finalized in May of last year. SHRM continues to have serious concerns with the final overtime rule that, as we heard, more than 

doubled the salary threshold to over $47,000 and included automatic increases every three years. Throughout the rulemaking 

process, SHRM noted that a salary update was warranted, but a 

more than 100 percent increase was simply too much too fast and 

would curtail the workplace flexibility to which many employees 

have grown accustomed. 

Thankfully, the November 22 preliminary injunction brought relief to many employers who were inundated with questions and 

complaints from exempt employees about how the conversion would 

impact them. Going forward, SHRM believes the Trump administration should reexamine the overtime rule and utilize previous 

methodologies in a new rulemaking to determine a more reasonable 

salary threshold. 

In conclusion, Mr. Chairman and Committee members, because 

the FLSA was crafted for a different time, it must be reevaluated 

to ensure it still encourages employers to hire, grow, and better 

meet the needs of employees in this twenty-first century workplace. 

So I thank you again for allowing me to participate in this important discussion, and I also welcome any questions. Thank you. 

[The statement of Ms. Walters follows:] 

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Chairman BYRNE. Thank you, Ms. Walters. And I thank all of 

you. Those were great statements. 

We’re now going to go to the question part of this proceeding, 

and we will start with a question from our distinguished Chairwoman, Ms. Foxx. 

Ms. FOXX. Thank you, Mr. Chairman. 

And I want to thank all of our witnesses here today. You’ve made 

some wonderful comments and shared very useful information with 

us, and I want you to know I appreciate your being here. 

Mr. Brantley, I’d like to know a little bit more about the kinds 

of employees at institutions of higher education who would be affected by implementation of the overtime rule. Actually, I think I 

know something about it, having worked in an institution of higher—several institutions of higher education, but some others may 

not. 

You mentioned resident directors in your written testimony as 

particularly unsuited to classification as hourly workers. Would you 

elaborate a little bit on that, and how would the services they provide to the students be negatively affected? 

Mr. BRANTLEY. Thank you, Chairwoman Foxx. So most of us in 

this room have spent some time on a college campus, and as all of 

us know, the students don’t exactly work on an 8 to 5 schedule. So 

as we think about the services that are provided to these students 

24/7/365, no position is more impacted than a position like a resident director, who typically has a master’s degree, may supervise 

a number of graduate assistants, a number of resident assistants, 

maintenance staff, office staff, et cetera. This person typically has 

an apartment or some other residence that’s with the students, the 

idea being that this person has that integral connection to the students outside of the classroom. 

If we implement the new regulations with a salary threshold of 

$47,476, the majority of our resident directors are paid a salary 

below that. One of the challenges with the current regulation is it 

doesn’t include room and board, so all of that cannot be included 

as part of the compensation for our resident directors. 

Also, as we encourage these individuals to have to track hours, 

is a casual conversation in the hallway with a student working 

hours? Is having a meal with students in the residence hall or in 

the dining room, is that working hours? The complexity is there. 

Asking these individuals to track their hours is all but impossible. 

Ms. FOXX. Thank you very much. 

Ms. Riner, as you’ve testified, entrepreneurs like yourself are 

being impacted by costly regulatory requirements. Time and resources have gone into ensuring compliance with regulatory requirements instead of growing businesses and creating jobs. Would 

you reflect on that a little bit more for us and for the folks listening? 

Ms. RINER. Yes, Chairwoman Foxx. My own personal journey has 

been very discouraging, quite honestly. I have been trying to protect my business from the Department of Labor’s regulations that 

they have applied to me. We believe it’s been—they used the wrong 

standards in the Fair Labor Standards Act. And they actually used 

the independent contractor test, which, actually, they should have 

used the precedent set forth in the Supreme Court, which says that 

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you look at the economic reality of the situation and we use our 

common sense to look at the whole work activity. 

So it has been very discouraging for me personally. It has hurt 

our ability to create business opportunities for our franchise owners. It’s been a big distraction. It’s cost us a lot of time and money. 

I’m a small business owner. I have three full-time employees in my 

office, also some part time. And so it’s been quite a burden to bear 

to continue to operate our business and continue to grow. 

Ms. FOXX. We understand that your attorney has estimated the 

penalties for repeated or willful violations could reach $3.6 million 

for your small business. Is that correct? 

Ms. RINER. Yes, ma’am, that is correct. And it was a terrifying 

number to receive, quite actually. It would put us out of business. 

And so it has been worth fighting for, though, not only for my business, but for moms who I represent. I represent thousands of families, not only in Arkansas but across the country, who love our consignment events. It saves families a lot of money. And also, just 

small business owners. Honestly, I hear a lot of stories of small 

business owners that are experiencing this overregulation to the 

point of being put out of business, because a lot of them can’t fight 

back. 

Ms. FOXX. Well, bless you for exercising your civic responsibility 

in doing what you have done. And let’s hope we can see some 

changes so that small business people like you will not be harassed 

by bureaucrats with too much time on their hands. Thank you very 

much. 

I yield back. 

Chairman BYRNE. Thank you, Chairwoman Foxx. She yields 

back. 

Mr. Takano, you’re recognized for five minutes. 

Mr. TAKANO. Thank you, Mr. Chairman. 

It’s curious to me that several witnesses and some of my Republican colleagues have said that the Fair Labor Standards Act is an 

outdated law from the 1930s that needs to be updated to reflect the 

modern workforce. 

To me, it’s no surprise, Mr. Stettner, that—well, I strongly supported the administration’s updated overtime rule, but I want to 

make sure the Committee has an understanding of why an update 

to the salary threshold was long overdue. 

What was the original purpose of the maximum hour provision 

in the Fair Labor Standards Act? Can you just review that for us? 

Mr. STETTNER. First, to create more jobs. When you limit to 40 

hours, rather than having so much overtime, you can create more 

jobs. Second, to allow for the balance between work and family. 

And third, to protect the workers’ health. 

Mr. TAKANO. So basically, when someone has to be paid overtime 

at time and a half or whatever, the employer has a choice: Do I 

pay this person overtime or do I hire another person to do that job? 

Mr. STETTNER. That’s correct. 

Mr. TAKANO. That was the intent behind the law, was that, you 

know, you legally mandate that they get paid more for overtime, 

and then the employer has to decide whether that employee is— 

you know, it’s worth it to that employer to keep that employee on 

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the job longer or hire someone else. Obviously, it will create more 

jobs if we have a standard. 

Mr. STETTNER. That’s correct. And I think it was during the 

Great Depression when there was a need for more employment. So 

let’s put this into place. And I think that was the same hoped effect 

of the overtime—the new overtime rule was to, you know, inspire 

more employment. 

Mr. TAKANO. So, you know, it’s fair to say that, you know—so it’s 

my understanding that the threshold used to be updated quite frequently, once every two to nine years between 1938 and 1975. But 

it’s only been updated twice since 1975. Do you think that Congress 

envisioned only two updates to that threshold in 40 years? 

Mr. STETTNER. No. The idea was for it to keep pace with only 

those employees to be exempted that are truly bona fide executive, 

administrative, and professional employees. To date, having a salary threshold of just $23,000, by any means and common sense, 

does not include individuals that are bona fide administratives and 

executives. 

Mr. TAKANO. So administrators and executives, we have kind of 

tests to figure out and determine who those folks are, truly people 

who are managers, not people who are called managers who are actually doing, you know, work, so that we can tell the difference between somebody who’s a manager and someone who’s a line worker. 

What effect, in your opinion, has that long delay had on the 

threshold’s ability to accomplish the purpose of the FLSA? 

Mr. STETTNER. I think the effect has been that many workers, 

particularly our young workers, aren’t even familiar with the concept that they have a right to be paid time and a half. It’s been 

so eroded that the overtime protections really have lost their value 

in the economy. 

Mr. TAKANO. You mean to tell me, Mr. Stettner, that there’s a 

whole generation of Americans out there, millennials, who don’t 

know that they have a right to overtime pay? 

Mr. STETTNER. Often they’re told in their very first job, you’re on 

a salary, you’re being paid $28,000 per year, and you’re not eligible 

for overtime. So it’s just not a reality. The salary designation is 

used to avoid people’s right to overtime, and it’s created a generation of overworked Americans. 

Mr. TAKANO. My God, if I were a millennial or part of this whole 

group of people that wasn’t aware of this, because the law was not 

updated and I never felt the benefit of this updated threshold, I 

would begin to think that the economy was rigged against me. That 

the rules not being enforced meant that I as a little worker, that 

the rules somehow not being enforced, I mean, now that I’m awakened and know that, hey, this law has not—the threshold hasn’t 

been updated, that the Obama administration was really trying to 

unrig this rigged economy that’s rigged against the wage earner or, 

actually, in this case a salaried worker who, you know, doesn’t 

meet that threshold anymore. 

So, to me, enforcing the FLSA and regularly updating the law 

would have meant that many, many people, workers would have 

felt the benefit of being protected by these overtime protections. 

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The last update to the salary came in 2004. Do you believe, Mr. 

Stettner, that the 2004 update brought the salary threshold back 

to its intended level? 

Mr. STETTNER. It was far below what had been in 1979, the last 

time it had been significantly updated. So that the update that was 

promulgated and is now enjoined really is getting towards the previous purchasing power of that update. It’s by no means the maximum. The level has actually been much higher in the past. And 

really importantly, one of the policies that we really can do to help 

those middle income earners who are having the hardest struggle. 

Mr. TAKANO. Well, thank you, Mr. Stettner. My time has run 

out, and I appreciate your responses. Thank you. 

Chairman BYRNE. Thank you, Mr. Takano. 

I now recognize myself for five minutes. 

I’m going to give you a test like you had in college. It’s going to 

be a one-word response and it’s one of two words, agree or disagree. 

Okay. Listen to the statement and tell me if you agree or disagree 

with this. 

Many of us have argued over the years that the rules and regulations implementing Federal wage and hour protections are outdated and overly complex and, as a result, undermine the strength 

and competitiveness of the American workforce. 

Ms. Riner, agree or disagree? 

Ms. RINER. Agree. 

Chairman BYRNE. Mr. Stettner, agree or disagree? 

Mr. STETTNER. Disagree. 

Chairman BYRNE. Okay. Mr. Brantley, agree or disagree? 

Mr. BRANTLEY. Agree. 

Chairman BYRNE. Ms. Walters? 

Ms. WALTERS. Agree. 

Chairman BYRNE. Okay. See, you all did well. You did well in 

college. 

Ms. Riner, I understand legislation was introduced last week in 

the House and Senate to amend the Fair Labor Standards Act to 

clarify that volunteers of certain children’s consignment events are 

not employees under the law. Do you believe legislation is necessary to provide your business with the certainty it needs to operate without the threat of litigation going forward? 

Ms. RINER. I do, Chairman. We’re very thankful to Senator Boozman, Senator Cotton, and Congressman Hill for reintroducing the 

Children’s Consignment Event Recognition Act for us. And we’re 

very grateful for it. 

We do have a case going on in court right now that we’re battling, but we feel that for long term, we really do need the protection for the industry. It’s been growing. This industry has been 

around, actually, for 30 years, and it’s serving thousands of families. And we feel that in order to protect what we do and what families love, that we do need this legislation in place. 

Chairman BYRNE. When you had your meetings with the people 

with the Wage and Hour Division, did you tell them, this is going 

to put me out of business? 

Ms. RINER. Well, no. Well, I did say that I felt like it was unfair. 

Chairman BYRNE. What did they say when you said it’s unfair? 

Ms. RINER. That I needed a lobbying group. 

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Chairman BYRNE. A lobbying group? 

Ms. RINER. They asked me if I had one, actually. 

Chairman BYRNE. So let me get this straight. A Federal agency 

recommended that you get a lobbyist? 

Ms. RINER. Well, they just asked if I had support. And at the 

time, it was myself. And so I realized that if I wanted to protect 

my business and protect the industry, that I really had no choice 

but to fight. 

Chairman BYRNE. Ms. Walters, can you talk more about the burdens that small businesses face in trying to ensure that they have 

properly classified their workers? 

Ms. WALTERS. I think I can, Mr. Chairman. How many minutes 

do I have? 

Chairman BYRNE. A minute and a half. 

Ms. WALTERS. Gosh, burdens come from a variety of perspectives. 

First is, as some folks have mentioned here today, just getting the 

initial classification of whether someone is an independent contractor versus an employee is tantamount and preliminary. We 

have IRS guidance, Department of Labor’s Administrative Interpretation. And many States—I hale from Maryland. Our Department 

of Labor, Licensing, and Regulation doesn’t follow either of those. 

They use their own test. 

Then next, trying to, again, properly classify as exempt or nonexempt. We have at least 14 States today, I believe, that have their 

own white-collar or EAP regulations. So you have to do that analysis under Federal as well as State analyses. And hopefully, if you 

get that right, then there are myriad, under the FLSA, challenges 

of compliance with regard to travel time, idle time, training time. 

Then we have State laws of sick pay and just a whole lot of compliance issues when it comes to properly classifying in the first place 

and paying in the second place. 

Chairman BYRNE. And most of these small businesses don’t have 

a designated single person that just does human resources for 

them. They can’t afford to have that. Is that your experience? 

Ms. WALTERS. That’s what I find, yes, sir. It’s sort of the office 

manager, payroll clerk, HR administrator, and perhaps several 

other hats. 

Chairman BYRNE. So that person has to pull away from their 

other duties—first of all, understand this ever-changing law that 

gets more complex by the day, and then figure out, all right, how 

do I apply that in my workplace setting? That’s got to detract from 

productivity at that company and their ability to grow. 

Ms. WALTERS. It likely does not enhance it, yes, sir. 

Chairman BYRNE. Mr. Brantley, very quickly, the Department’s 

overtime rule has a provision that indexes the salary threshold for 

exempt employers, which will likely increase the threshold every 

three years. In your judgment, does the Department of Labor have 

the statutory authority to index the threshold, and what practical 

problems would automatic updates cause for colleges and universities? 

Mr. BRANTLEY. Our opinion is that they do not have the authority to index and make changes every three years. As we think 

about the changes that are going on in not just the economy but 

for employers overall, we really strongly believe that any change to 

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the threshold should be vetted and that we should be given the opportunity to provide comment and feedback as to what that impact 

might be for not just colleges and universities but employers overall. 

Chairman BYRNE. Very quickly, because we’re actually out of 

time, but give me just real quick, what would be the effect on colleges and universities if we continue to do that? 

Mr. BRANTLEY. The effect on colleges and universities with tight 

budgets and decreasing funding from public institutions, et cetera, 

could mean additional funds that are just not available to dedicate 

to a salary threshold that really is not applicable in most circumstances. 

Chairman BYRNE. Thank you. 

I now would turn over for five minutes to the distinguished lady 

from North Carolina and my cochair of the HBCU Caucus, Ms. 

Adams. 

Ms. ADAMS. Thank you, Chairman Byrne and Ranking Member 

Takano. 

And thanks to our witnesses for—thank you for your testimony 

today. 

Women make up half of the country’s workforce, yet the Census 

Bureau reported that the gender wage gap between full-time yearround working men and women, women make only 80 percent of 

the median wage men earn. While working women may have had 

great strides since 1967, when they earned only 58 percent of what 

men earned for full-time year-round work, there’s still a long way 

to go before true pay equity is achieved. 

Mr. Chair, I’d like to enter into the record a letter from the nonpartisan National Women’s Law Council, which details the challenges that women face in the workplace. 

Chairman BYRNE. Without objection, so ordered. 

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Ms. ADAMS. Thank you. 

According to a study by the National Women’s Law Center, African-American women typically are paid only 63 percent, Native 

American women only 58 percent, and Latinas only 54 percent of 

the wages typically paid to white non-Hispanic men for full-time 

year-round work. Researchers cite conscious and unconscious 

stereotypes about working women and the overrepresentation of 

women in low-wage jobs, including minimum wage and subminimum wage positions, and underrepresentation in high-wage ones. 

Nearly two-thirds of minimum wage workers and tipped workers in 

the United States are women. 

Congress should introduce and pass the Paycheck Fairness Act, a commonsense solution that would help employees to uncover and 

challenge pay discrimination, prohibit retaliation against employees who discuss their salaries, improve remedies for employees who 

have been discriminated against, ensure employees are provided 

with effective incentives to comply with the law, and to ensure 

equal pay. 

Ms. ADAMS. In addition to an increase in minimum wage, legislators should prevent prospective employers from asking applicants 

to disclose their prior salary on a job application, as it often perpetuates prior discrimination and it compounds gender and racial 

wage gaps. 

Mr. Stettner, as more and more women participate in the workforce as either primary breadwinners or supplements to their family’s income, what are the income impacts of systematically low 

wages for women? And what are some initiatives that Congress 

should support to reduce or eliminate pay disparities among 

women and individuals of color? 

Mr. STETTNER. Women and people of color are disproportionately 

impacted by the growth in the low-wage service sector and would 

be more likely—are the predominant beneficiaries of an increase in 

the minimum wage. 

As the Congresswoman mentioned, strengthening the ability of 

women to be able to assert the right to equal pay, having the same 

rights around discrimination that there are in race-based cases, 

and the nondisclosure of salaries—these are all steps that can be 

taken to decrease the gender and racial pay gap. 

Ms. ADAMS. Thank you. 

So do you support protections for workers who choose to disclose 

and discuss their salaries with coworkers? And if so, can you explain why? 

Mr. STETTNER. In order to defend your right to equal pay, you 

need to know what your colleagues are working. And many firms 

have kept that data away from other employees, and this makes 

it impossible for women workers to assert their rights. 

Ms. ADAMS. Thank you very much for your responses. 

And, Mr. Chairman, I yield my time back. Thank you. 

Chairman BYRNE. Thank you. 

And the chair now recognizes for five minutes Ambassador Rooney. 

Mr. ROONEY. Thank you, Mr. Chairman. 

Ms. Riner, your heart-moving story of bureaucratic abuse reminds me of something President Ford said years ago, where he 

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said a government that’s big enough to give you everything you 

want is big enough to take away everything you have. And it 

sounds like the Department of Labor has tried assiduously to do 

that to you. 

I’m moved by that, and I wonder if you could just give a quick 

comment on what that out-of-control, abusive bureaucracy says 

about America right now and whether the word ‘‘opportunity’’ still 

exists for us average Americans trying to build up a great country. 

Ms. RINER. Well, you know, I grew up the daughter of an infantry Army officer. I love our government, I love our country. And so 

I was very surprised as this process rolled out with me. We were 

very cooperative with the Department of Labor. And so I will tell 

you that it has been very disheartening and discouraging, personally, to me and to my family, to my franchise owners. A franchising 

system is really like a family, and so, as they have watched me 

walk through this and try to protect our company, it has been very 

disappointing and discouraging. 

And, you know, also, as we have the issue of joint employer, 

that’s a whole other battle that we’re fighting that we’re discouraged about. It really creates confusion and, again, discouragement, 

because it creates this confusing liability for a franchisor, as we potentially could be responsible for all of the employees of our 

franchisees—in my case, even my consignor volunteers. 

So it has been discouraging, but it also, in some ways, has been 

encouraging. As I have fought, so many people have come along beside us and encouraged us and supported us. Still no one has ever 

complained against our company. Thousands and thousands of 

families love our business model. Many moms and grandmoms and 

dads love what we do. 

Mr. ROONEY. Thank you very much. 

Ms. Walters, we have 20,000 unfilled computer programming 

jobs in the State of Florida right now. This law, the FLSA, was 

passed in 1938 in an era of surplus labor, manufacturing and farm 

economy where people didn’t move. And now we have, in 2016, 

scarcity of labor, rapidly mobile employment base, and a service 

economy. 

So I’d like you to elaborate just a tad bit on that last comment 

you made about how obsolete and backward-looking the FLSA is 

relative to the conditions that we face now and that our young people are going to face in the future. 

Ms. WALTERS. Well, thank you for the question. 

I think an example that comes to mind is we have a lot of employees that, again, enjoy the flexibility that they have today to 

work from home, telecommuters—great example—and how do we 

track the time that they are or are not working. We need to track 

it. They need to be paid. I think we all agree with that. If you provide work for us, we need to pay you for that time. The question 

is how do we capture that information. 

In real life, an employer has a large percentage of their employee 

population work from home. Other employees coming into work 

every day is a more traditional model. And research shows employee engagement increases productivity. We’ve talked about increased productivity. Face-to-face interaction with our employees is 

very important. 

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So the employer asked the telecommuters, ‘‘Would you come into 

the office once a week so we can have a team meeting and stay in 

touch?’’ Those employees said they want to be paid for the time 

that they traveled from their home office to the regular office. The 

other employees said, ‘‘Well, that’s not fair. We don’t get paid for 

that time. Portal-to-Portal Pay Act. We get paid only after we arrive at the first office.’’ And so the regulations currently are not 

clear whether that time should be paid or should not be paid. 

So there’s a lot of dialogue I think we can have, should have, and 

need to have to figure out how to strike a really, really good balance on this. 

Mr. ROONEY. Thank you. 

I yield back my time. 

Chairman BYRNE. Thank you, Ambassador. 

Ms. Shea-Porter, welcome to the subcommittee. And you are recognized for five minutes. 

Ms. Shea-Porter. Thank you very much. It’s an honor to be back. 

And I thank all the witnesses today. 

Enforcement in industries with high rates of violations is an efficient use of the Department’s resources and ensures that workers 

who do not have the resources to bring a claim are protected. 

Mr. Chair, I’d like to enter into the record a letter from the nonpartisan National Employment Law Project. 

Chairman BYRNE. Without objection, so ordered. 

Ms. Shea-Porter. Thank you. 

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Ms. Shea-Porter. As this letter explains, during the Obama administration, Department of Labor directed its Wage and Hour enforcement investigations towards industries with vulnerable workers. These industries include hotel and motel work, agriculture, 

janitorial services, garment manufacturing, and the restaurant industry. 

And I’d like to stop for a second and say that I worked in many, 

many restaurants through high school and college, and I can assure you that we did not receive proper wages in so many of those 

places, and we didn’t get our breaks either. So this does happen, 

and that’s why we need to be vigilant. I recognize that sometimes, 

you know, there’s overstepping, but we do have a problem, and 

there are a large number of people in this country who suffer because of this. 

This is especially critical for workers who may be afraid to come 

forward or may not know. The Department of Labor successfully 

rescued over $1.5 billion in back wages for 17 million workers between 2009 and 2015. In fiscal year 2015 alone, the Wage and 

Hour Division investigations resulted in more than $246 million in 

back wages and helped over 240,000 workers. And we’re talking 

about workers who really must have this income to take care of 

themselves and their families. 

Under the Obama administration, the average back-wage recovery per worker increased from $785 in fiscal year 2009 to $1,000 

per worker in fiscal year 2015. And over 51 percent of those rescued wages were returned to 16,902 working families in the retail 

fast-food industry. Yet these recoveries are only a fraction of the estimated $3 billion lost annually by workers due to wage theft. 

Since the New Deal, the Department of Labor has challenged 

itself to foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of United States, improve working 

conditions, advance opportunities for profitable employment, and 

ensure work-related benefits and gains. 

So, Mr. Stettner, my questions are for you. What does strategic 

enforcement by the Department of Labor mean to workers? 

Mr. STETTNER. Thank you, Ms. Porter. 

What it means is that we’re focusing not just on the minuscule 

number of workers that the Department can reach but really trying 

to change those industry practices. In fact, there’s research that 

documents it works. If there’s one investigation against a fast-food 

restaurant in a ZIP code, compliance increases at all the neighboring restaurants. 

So that’s the idea, to shift industry practices and make sure that 

all Americans get the pay that they deserve. 

Ms. Shea-Porter. Thank you. 

And do you believe that the Department of Labor’s enforcement 

agencies are adequately staffed, given the millions of employers in 

workplaces around the country? 

Mr. STETTNER. No. They’re woefully understaffed. 

Ms. Shea-Porter. And one last question: Throughout the previous 

administration, we saw the Wage and Hour Division focus enforcement on low-wage industries. Can you talk about why that practice 

is important? 

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Mr. STETTNER. So wage and hour violations are not equally distributed. They’re really concentrated in some of the industries you 

mentioned: fast food, agricultural, janitorial services. Unfortunately, many of the businesses in this sector, part of their business 

model is keeping labor costs so low that they routinely break the 

law. We need to change that practice. 

And, in fact, if there are minuscule price increases that happened 

on your burger, that would be worth it to make sure that the working families that work there get a fair pay. 

Ms. Shea-Porter. Thank you. 

I think a lot of people don’t realize, because they didn’t work in 

an industry like that, that there is a lot of difficulty, that they 

bring workers in and they make the effort, they pay the bus fare 

or whatever it is to get there, the gasoline, and then they’re told 

they’re not needed or come back in three hours. And these are 

working conditions that a lot of us would not accept. So I want to 

thank you for highlighting this. 

And I yield back. 

Chairman BYRNE. Thank you. 

The gentlewoman yields back. 

The gentleman from Wisconsin, Mr. Grothman, is recognized for 

five minutes. 

Mr. GROTHMAN. Ms. Walters, I wanted to talk to you a little bit 

more about the overtime rule that caused the workers who were 

previously exempt from overtime to be included in overtime. 

I always like to repeat a story. A buddy of mine back home, his 

daughter got a job, probably earning in this—you know, under this 

amount. He told her, always be the first one at work in the morning and the last one to go home at night. You know, be a hard 

worker and you’re going to move up, and she was a hard worker 

and moved up. 

What impact would this have on your business or the businesses 

that you advise, I guess, if some employee wanted to work extra 

hard and really, you know, go all out? 

Ms. WALTERS. So if the employee—and I think many, many employees want to work extra hard. The question is, what does that 

get you? So if we’re talking about more money, that may not be the 

result. Even the Department of Labor, when the final regulations 

came out, the DOL provided examples where an employer could 

prohibit overtime and might not do that— 

Mr. GROTHMAN. As a practical matter, you’d get in trouble with 

your boss for working hard, wouldn’t you? 

Ms. WALTERS. I’m sorry. Say again? 

Mr. GROTHMAN. If you define working hard as putting in another 

half-hour at the end of the day or do something extra, you’d get in 

trouble with your boss because they would have to pay you more, 

right? 

Ms. WALTERS. Well, if you’re nonexempt, then, yes, the employer 

has to pay for that time. 

Mr. GROTHMAN. Right, right, right. Okay. So it would be a problem. 

I think in some jobs you can be in a position—usually, I think 

of a salaried job—in which you’re supposed to complete something 

by the end of the day, maybe complete a report or something. Well, 

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what if at the end of the day you don’t feel you’ve done a good job 

on the report? Aren’t you kind of stuck in a situation where either 

you have to turn in a not-very-good report or hang around an extra 

hour if you want and finish things? 

What would you do if you were an employee and it’s five o’clock 

and you’d like to spiff this up a little bit more or do a little bit of 

work? You know, so you could either turn in the report, which you 

don’t think is adequate, at 5:00 or hang around at 5:30 and get in 

trouble with your boss because they’ve got to pay for you for a halfhour of overtime. What would you do in that position? 

Ms. WALTERS. You know, it’s interesting. We often find the stories, I often hear it’s the star employee, it’s the star performer who 

says, ‘‘No, no, no, I don’t mind, I’ll do this extra work without pay.’’ 

And you can’t. Obviously, we’ve said an employer has to pay for 

that time. 

So what would I do? I’d have to talk to my boss and say, do you 

want my quality or do you want my time? And then we figure it 

out from there. 

Mr. GROTHMAN. I like the rule was put together by somebody 

who likes to golf all the time. Yeah. 

Okay. Next question. Mr. Brantley, can you give us any suggestions—you spoke about the overtime rule—any other suggestions 

you have for changes in the wage-and-hour policy? 

Mr. BRANTLEY. Absolutely. One of the key challenges with the 

policy as currently constructed relates to how we characterize parttime employment. 

So let’s take the example of an accountant who’s a CPA who has 

been working full-time for years who we make an accommodation 

so that person can be at home part-time to spend with a newborn 

or with an elderly parent. If that salary of that CPA professional 

staff member goes below $47,000, all of a sudden we are no longer 

able to consider that person as an exempt employee. 

The same could be true for a fundraising development professional who is ready to retire, and we’d like to provide a stipend so 

that person could actually provide some services to our college or 

university. If that looks anything like part-time, that person could 

all of a sudden be characterized as nonexempt and be required to 

complete a timesheet for the first time in his or her career. 

Mr. GROTHMAN. Okay. It makes things a little bit more difficult. 

Ms. Riner, a question for you. We’ll get you all. You expressed 

frustration in your testimony, the way the Department treated 

your company. Has the Department worked with you in any ways 

to ensure that small businesses which are franchised can succeed? 

Ms. RINER. No, sir. Unfortunately, we’ve really had an adversarial relationship, to the extent that we’ve had to take them to 

court to protect our business. So we had hoped in the beginning 

that we were working together, we hoped that we were educating 

them as to our model, but, unfortunately, that didn’t happen. So 

we’re in court, trying to bring resolution and protect our industry. 

Mr. GROTHMAN. Okay. 

This is a more sensitive question. Are any of you familiar with 

the EEO-1 form? 

Mr. Brantley, you’re familiar with it? 

Mr. BRANTLEY. Yes. 

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Mr. GROTHMAN. Yeah. How long have you been familiar with the 

form, or how long have you been familiar with organizations that 

have to fill out that form? 

Mr. BRANTLEY. Well, as a human resource professional my entire 

career, I have a long history of completing that form. 

Mr. GROTHMAN. Okay. To make things turn out right in that 

form, do you or people like you advise people who should be hired, 

who should be promoted? 

Mr. BRANTLEY. Well, most employers that have Federal contracts 

have to have an affirmative action plan. So, in turn, as part of that, 

you have goals and expectations in terms of your recruitment efforts. 

Mr. GROTHMAN. Does it ever change who’s hired or promoted because you want the numbers to work out right on that form? 

Mr. BRANTLEY. Well, obviously, the perspective of any employer 

should be that we’re hiring the right person for the job. It’s just, 

as it relates to our recruitment efforts, the types of things that 

we’re doing to attract a more diverse applicant pool. 

Mr. GROTHMAN. Does it affect that—you know, if you have two 

people applying for a job or three people applying for a job, you 

may pick somebody different than you would otherwise? 

Mr. BRANTLEY. The guidance is, if both positions are equal, if 

both individuals are equal, that you would defer to someone from 

a minority status. 

Mr. GROTHMAN. Okay. 

Thank you. 

Chairman BYRNE. The gentleman’s time has expired. 

The Chair does want to recognize the presence of Mr. Scott, the 

Ranking Member on the full Committee. 

I understand you don’t have any questions, but you’re always 

welcome here, and we love seeing you. 

Mr. SCOTT. Well, thank you, Mr. Chairman. I had three other 

meetings at the same time. I apologize for being late. But I appreciate your leadership and the Ranking Member. Thank you. 

Chairman BYRNE. Thank you, sir. Glad to have you. 

Now we call on Mr. DeSaulnier for five minutes. 

Mr. DESAULNIER. Thank you, Mr. Chairman. I want to thank you 

and the Ranking Member and the witnesses. 

And these are odd hearings for me, when we went through the 

rule last session, because, as somebody who managed and owned 

restaurants for almost 35 years, someone who was once a registered Republican but has a difference of opinion, and just from 

my life experience and my work experience—and it may be just 

that northern California is different. Clearly, it’s different. But, Mr. 

Stettner, some of my questions are directed at just the economic 

benefits. 

So, when I owned restaurants, I liked to go by the Ford rule, that 

I wanted a product but also an income, that my employees could 

afford the product. Now, recognizing what the business owners 

have said here and in other hearings, there’s a struggle when your 

costs go up. I always felt like I could make that struggle work and 

pass it on to my customers, even though they were struggling as 

well. 

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But I found that if you paid more—and I always thought it was 

sort of outrageous that I looked at my leases and I wanted to make 

sure they were—the landlord wanted to make sure it was indexed 

for inflation but minimum wage isn’t indexed for inflation, although that’s about to change in California. 

So my question is more directed—it strikes me that, coming from 

northern California, coming from a business ownership, having 

looked at schedules—and I can’t remember a time where I didn’t 

have to pay an hour if I had split-shifts, I didn’t have to pay overtime if we went over—it is less than 40 hours in California. So I 

had to manage that, and I had to have my managers manage that, 

and it worked. 

Also, in California, we have a flexible work schedule, that if a 

majority of the employees vote to have a flexible work schedule, 

they can have it. It’s fairly easy to access through the State workforce development website. And it’s an important thing. 

As Ms. Walters, as you said, there are a lot of good employees, 

I’ve had good employees, who have said, ‘‘I’ll work an extra hour. 

I don’t want to spend an hour and a half in traffic. And you need 

somebody to do this.’’ But I would always say, ‘‘I’m required to pay 

you overtime, and I will do that.’’ But it worked. And given that 

all my competitors, who were complying legally, had to do the same 

thing, it seemed to work out. 

So my question, Mr. Stettner, is, in the Bay Area, which is part 

of California that’s the fifth-largest economy in the world, in 2015 

our GDP grew by almost 12 percent. We protect consumers, we 

have very stringent consumer laws, very strict worker enforcement 

laws, stricter than the ones that we are debating today, strict environmental laws, but the economy works. And we clearly have challenges. Our housing costs are a big challenge for us. 

So if you could help me a little bit about why it works in some 

areas and why businesses flourish, but there’s this theory that in 

other areas in the country, if you do this, businesses will not be 

able to sustain and have the kind of benefits we have in California, 

in the urban areas. 

Mr. STETTNER. So, when workers have more in their pocket, 

they’re able to spend more, and it goes directly into the hands of 

businesses. When workers are paid more, they’re more likely to 

stay at a firm, more likely to gain a skill and help that firm become 

more productive. 

It’s no coincidence that Walmart, which is all over the country, 

including the South, recently increased their wages of their associates, explicitly because that’s what they needed to compete more on 

quality, as there was much more competition from other retaliators 

offline and online. And, in fact, some of the best low-wage retail 

businesses pay good wages. 

Mr. DESAULNIER. So the transition part, so if you’re in another 

part of the country and, say, you want to start to have the economy 

grow faster than one or two percent, and you believe this research, 

how do you help businesses transition to that? Or is it just, as in 

my case, you accepted it and you realized that, through your own 

business experience, that you could struggle for a while—a matter 

of months, in my case—but, ultimately, as you said, the research— 

and my life experience bore out the research that you allude to. 

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Mr. STETTNER. So most of the costs are businesses, like the overtime rule. Although that $1.2 billion in pay raises is significant, it’s 

less than .1 percent of all wages paid in the country. So, right now, 

in general, corporations have taken the most of that growth. The 

first step to making it work better is to have more of it shared. And 

that’s going to help lift all boats. 

Mr. DESAULNIER. I’ll just conclude, Mr. Chairman, I would like 

to submit a letter from similar business owners from my experience 

and my view, from the Businesses for a Fair Minimum Wage for 

the record, if that’s acceptable. 

Chairman BYRNE. Without objection, so ordered. 

[The information follows:] 

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Mr. DESAULNIER. And just say it’s troubling to me when I see— 

not to vilify CEOs of publicly traded companies, but, for instance, 

publicly traded fast-food restaurants have gone up in compensation 

by almost 1,000 percent since the 1970s, while workers wages have 

raised about 11 percent but their productivity has gone up 70 percent. It strikes me that we all should really have a reflective period 

to talk about that and balance it. 

And I know both parties share the desire to raise wages and the 

ability to have a quality life for middle-income and lower-income 

people. But it seems like there could be a legitimate discussion 

around these issues since we have different parts of the country 

that have different problems and address them in a different way 

with different results. 

Thank you, Mr. Chairman. 

Chairman BYRNE. Thank you. 

The gentleman yields back. 

Well, we’ve come to the end. I would like to again thank our witnesses for taking the time to testify before our subcommittee today. 

I know you took a lot of time to prepare to be here and you had 

to travel to be here, and we want to thank you for that time and 

for the considerable testimony you’ve given us. Very helpful to the 

subcommittee’s work. 

Mr. Takano, do you have any closing remarks? 

Mr. TAKANO. I do, Mr. Chairman. 

Chairman BYRNE. You are recognized. 

Mr. TAKANO. Thank you. Thank you. 

Well, I’d like to also thank all the witnesses for coming to the 

Committee today to share their views. 

As we all know, there was supposed to be another hearing this 

morning across the Capitol. The Senate HELP Committee was 

scheduled to hold a hearing on Andy Puzder’s nomination to be 

Secretary of Labor. In a victory for working families, Mr. Puzder 

has now withdrawn his name from consideration. 

This administration ran a campaign that promised to defend 

working people, but the nomination of Andy Puzder, a fast-food 

CEO with a history of minimum-wage and overtime violations and 

a declared opposition to efforts to raise wages for working people, 

was a betrayal of working people across this country. Andy Puzder 

chose to make a profit by cutting corners and breaking the law. 

Through his words and actions, Mr. Puzder repeatedly demonstrated his disdain for working people. 

We heard today about how workers in low-wage industries like 

fast food are repeatedly cheated out of their fair pay. These workers deserve a Secretary of Labor who will fight to recover their 

hard-earned pay. 

I urge the President to keep his promise to support working families and nominate a Secretary of Labor who is better suited to 

meet the mission of the Department of Labor: to foster, promote, 

and develop the welfare of wage earners, improve their working 

conditions, and advance their opportunities for profitable employment. 

But no matter who heads the Department of Labor in the Trump 

administration, the members of our Committee must insist that the 

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Department of Labor does its job by holding employers accountable 

for misclassifying their workers and stealing their pay. 

The American people are counting on us, and we cannot let them 

down. Mr. Chairman, I hope that we can agree that Federal wageand-hour policies for the twenty-first century should put America’s 

families first. 

But before I yield back, I would like to ask unanimous consent 

to submit for the record letters from Jobs With Justice, the Economy Policy Institute, and the National Partnership for Women and 

Families, and the American Sustainable Business Council. As these 

letters from business representatives— 

Chairman BYRNE. Without objection, so ordered. 

Mr. TAKANO. Thank you. 

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Chairman BYRNE. Have you concluded? 

Mr. TAKANO. Mr. Chairman, I have concluded my statement. 

Chairman BYRNE. Thank you, Mr. Takano, and look forward to 

working with you and the other members of the subcommittee. 

We are going to make America great again, but we’re not going 

to make America great again if we don’t make the lives of the 

hardworking people of America great again. 

The average person in this country wakes up every morning, 

hurriedly gets himself ready to go to work, and they go to work and 

they work hard. A lot of them are doing that while they’re raising 

children, which is its own job, a very hard job. 

And as I travel around my district and go to see the places where 

people work—and I’m from lower Alabama; we don’t have very 

many big businesses—I talk to the people that work there, and I 

hear what they tell me. And there are so many times when the 

Federal Government is in the way. In some cases, Ms. Riner, we’re 

worse than in the way; we’re actually harming the ability of people 

to do what they want to do to make their lives better. 

I don’t think that most of us in the Federal Government intend 

to be in the way. Sometimes the one law we pass up here the most 

is the law of unintended consequences. And sometimes we pass 

these laws to promulgate these regulations thinking they’re going 

to have one effect and they have another. 

I know this, that if you go around the workplaces that I’ve been 

to over the last three years, they don’t look like the workplaces 

that I started in as a teenager during the 1970s—washing cars and 

making wooden slats for shutters, sandblasting the oil storage 

tanks. That’s the kind of stuff I had to do, like most young people 

had to do. The workplace is so different. 

I don’t think our laws have kept pace with that change, and, 

worse, I think our laws and the way we’re trying to apply them are 

actually getting in the way. So I hope that what we can do, with 

the good help of you who came here today to give us this testimony, 

I hope what we can do is to figure out a way where we can work 

together to make the lives of these hardworking Americans great 

again. 

I believe the vote last fall was an urgent plea from them: Please 

help us. Give us the sort of freedom and flexibility in our lives, including our lives where we work every day, so that we can do what 

we want to do and become who we want to become. That’s the 

American Dream. 

So I appreciate so much all of you being here and your testimony. I appreciate so much all the members of the subcommittee 

who came here today. 

There being no further business, the subcommittee stands adjourned. 

[Additional submissions by Mr. Byrne follows:] 

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[Extensive material was submitted by Ms. Riner. The submission 

for the record is in the committee archive for this hearing.} 

[Whereupon, at 11:30 a.m., the subcommittee was adjourned.] 

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