THE IMPACT OF FEDERAL LEGISLATIONS ON LABOUR UNIONS

The impact of Federal legislations on public labor unions

The Impact Of Federal Legislations On Public Labor Unions

Introduction

The Fair Labor Standards Act (FLSA), enacted in 1938, sets both the minimum wage and overtime premium in the United States. The initial purpose of the law was to shorten work weeks and to increase employment. Under the FLSA, eligible workers receive time-and-a-half pay for every overtime hour worked.

There has been limited variation in the Federal overtime laws over the past 60 years, and as a result, little empirical evidence exists to guide policy reforms. In a recent paper, Hamermesh and Trejo (1998) use limits on daily hours worked for women to study the effects of a law change in California that required payment of overtime for more than 8 hours of work a day. A second research strategy exploits the rules about which types of workers are "covered" by FLSA, i.e., which workers are actually eligible for the overtime premium. For example, Trejo (1991) uses coverage variation to look at private sector changes in the 1970's. Costa (1999) uses similar coverage changes in the FLSA in the 1930-1940's and finds that hours of work were reduced when a mandatory overtime premium was imposed on the retail trade sector.

This paper studies a policy change that extended overtime coverage to state and local government employees in 1985-one of the few major changes in the FLSA overtime provisions in the post-war period. In 1979, local bus drivers sued the San Antonio Transit authority for overtime pay, with the case reaching the Supreme Court in 1985. In its decision in Garcia v. San Antonio Metropolitan Transit Authority, the Supreme Court changed the legal standard by which eligibility for overtime coverage was determined, ruling that state and local workers were eligible for overtime pay. In response, Congress passed amendments to the Fair Labor Standards Act in 1985, which allowed overtime to be compensated with either cash payment or vacation time.

Estimates by the Department of Labor indicate that before the Supreme Court decision and subsequent FLSA amendments, 401,000 non-supervisory state and local government workers were eligible for overtime; after the law, almost 8 million state and local public sector workers were covered (Department of Labor, 1985; 1988).

This paper takes on added significance in light of two recent Supreme Court decisions that specifically address the applicability of federal overtime restrictions to state and local government workers. In Alden vs.Maine (1999), the court held that the state of Maine had "sovereign immunity" from being sued by local employers for FLSA violations (119 S.Ct.2240). This decision essentially limits one major avenue by which employers could seek redress when an alleged FLSA violation occurred. In a second recent decision, Christensen vs. Harris County, the Supreme Court ruled that public sector employees can be forced to take compensatory time in lieu of overtime pay by their employers (120 S. Ct. 1655). These controversial decisions have largely been viewed as strengthening the rights of states while weakening the position ...