CLIENT ALERT: Please read this special message.

The Future of Fair Labor

The New York Times—Jefferson Cowie

SEVENTY-FIVE years ago today, President Franklin D. Roosevelt signed the Fair Labor Standards Act to give a policy backbone to his belief that goods that were not produced under “rudimentary standards of decency” should not be “allowed to pollute the channels of interstate trade."

The act is the bedrock of modern employment law. It outlawed child labor, guaranteed a minimum wage, established the official length of the workweek at 40 hours, and required overtime pay for anything more. Capping the working week encouraged employers to hire more people rather than work the ones they had to exhaustion. All this came not from the magic of market equilibrium but from federal policy.

For decades afterward, Congress brought more people under the law’s purview and engaged in perennial struggles to maintain or increase the minimum wage. Fifty years ago this month, John F. Kennedy signed its most important amendment, the Equal Pay Act, which guaranteed women and others equal pay for equal work.

Despite this noble history, today the act faces an uncertain future, thanks to a series of disconcerting shifts in the way we think about work in America.

The problem is indicative of the moral and political slipperiness of our time. A large and growing number of employers willfully classify their employees as “exempt” from the law by shifting their jobs, but not their pay, to administrative, executive and professional categories. Being exempt allows employers to ignore pesky things like overtime or minimum wages, since these are salaried, not hourly workers. Lawsuits over back overtime pay resulting from misclassifications have gone through the roof.

If the line between exempt and nonexempt workers has become unfairly blurred, the line distinguishing employee and independent contractor has faded to near invisibility. We are moving toward the “1099 economy,” named after the tax form provided to independent contractors, a classification that often walks the line of legality.

For some workers, being a 1099’er means more flexibility, creativity and control over their work. However, there are many more reluctant 1099 workers who want regular jobs but find themselves locked out of the system by employers looking for an easy way to buck their responsibility to their employees.

And then there is the most infamous classification hustle: the internship. For bright, young (and typically affluent) interns at America’s top corporations there is no actual job, so there are no fair labor standards to apply. That means no minimum wage and no maximum hours. There is often no pay at all.

A recent decision by the Federal District Court in Manhattan declaring that the hard-working “interns” involved in making the 2010 film “Black Swan” for Fox Searchlight were really employees is encouraging, and may well have long-range implications. It’s a hopeful sign that we may yet be able to re-establish an idea that is as old-fashioned as it is good: work and you get paid. ...

                                             *            *            *