Summary: H.R.2 — 101st Congress (1989-1990)All Information (Except Text)

Bill summaries are authored by CRS.

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Conference report filed in House (05/08/1989)

Fair Labor Standards Amendments of 1989 - Amends the Fair Labor Standards Act of 1938 (the Act) to increase the minimum wage per hour from $3.35 in 1989 to: (1) $3.85 in FY 1990; (2) $4.25 in FY 1991; and (3) $4.55 in FY 1992 and thereafter.

Provides for annual adjustments of the minimum wage. Directs the Minimum Wage Review Board (established by this Act), by January 1, 1992, to review current economic data on wages, prices, and other economic indicators and determine how the minimum wage rate should be adjusted. Directs the Board, by October 1, 1992, to transmit to the Congress a recommendation to adjust the rate, including an estimate of the economic effects of doing so. Directs the Board to conduct such reviews and transmit such recommendations annually.

Establishes the Minimum Wage Review Board, composed of five members appointed by certain congressional officers.

Increases the small business exemption by revising the definition of an enterprise engaged in commerce for purposes of coverage under the Act ("the enterprise test"). Exempts from such coverage those businesses whose annual gross volume of sales or business is less than $500,000 (currently $362,500), effective October 1, 1989. Requires employers who were covered in 1988, but who are exempt under the new threshold, to continue to pay the $3.35 per hour minimum wage (and continue to be covered by overtime and child labor provisions of the Act).

Removes the Virgin Islands from coverage by provisions for special industry committee minimum wage determinations and orders, including those involving employment under special certificates for learners, apprentices, and messengers and for students. Adds references to American Samoa under such provisions (American Samoa is currently covered by such provisions through references under other special minimum wage provisions). Removes references to Puerto Rico under such provisions, but continues and revises the special minimum wage treatment of Puerto Rico as follows: (1) in addition to designated types of employees (Federal, hotel, motel, restaurant, and food service) entitled to receive the full Federal minimum wage, employees in industries averaging $4.65 or more per hour would be so entitled; (2) employees in industries averaging from $4.00 to $4.64 per hour would receive the full rate by October 1, 1993, after a four-year period of gradual increases; (3) employees in industries averaging less than $4.00 per hour would receive the full rate by October 1, 1994, after a five-year period of gradual increases; and (4) employees of the Commonwealth of Puerto Rico, or a municipality or other governmental entity of the Commonwealth, in categories averaging less than $4.00 per hour and covered by 1985 amendments to the Act, would receive the full rate by October 1, 1995, after a six-year period of gradual increases.

Increases the tip credit under the Act from 40 percent to 45 percent for FY 1990 and to 50 percent for FY 1991 and thereafter. (The tip credit deems the amount paid to a tipped employee, for minimum wage purposes, to be increased by an amount determined by the employer, but not by an amount in excess of the specified percentage of the applicable minimum wage rate.)

Allows employers to pay a training wage at less than the minimum wage rate. Allows such training wage to be paid only: (1) until the employee has been employed a cumulative total of 60 days by all employers who are required to withhold payroll taxes for such employee; and (2) while such eligible employee is engaged in on-the-job training which is at least 30 days in duration. Prohibits payment of such training wage to migrant or seasonal agricultural workers or nonimmigrant aliens. Makes the individual responsible for providing proof of previous periods of employment with other employers. Allows such training wage to be paid only during the period from October 1, 1989, to September 30, 1992. Sets such training wage at: (1) not less than $3.35 per hour during the year beginning October 1, 1989; and (2) beginning October 1, 1990, not less than $3.35 per hour or 85 percent of the minimum wage, whichever is greater. Prohibits layoffs or termination of employment or reduction of the number of regular employees because of the training wage. Prohibits employee hours at the training wage during any month from exceeding one-fourth of all employee hours in the establishment. Sets forth notice requirements and enforcement provisions. Directs the Secretary of Labor (the Secretary) to report to the Congress by July 1, 1992, on the effectiveness of the training wage.

Exempts from overtime provisions of the Act up to ten hours in any workweek if during such time the employee is receiving certain remedial education.

Expresses the sense of the Senate that the rights and protections of the Act should apply to employees of the Senate or any office thereof. Directs the Senate Committee on Rules and Administration, within 180 days after the first minimum wage increase under this Act, to report a resolution which applies such rights and protection to Senate employees and establishes the scope of such coverage and remedies, enforcement, and other necessary procedures.

Applies the rights and protections under the Act to any employee in an employment position in, and any employing authority of, the House of Representatives, or under the Architect of the Capitol, using remedies and procedures under the Fair Employment Practices Resolution.

Adds civil penalties for repeated or willful violations of specified provisions of the Act.

Directs the Secretary, within 90 days, to promulgate regulations that interpret a specified professional exemption from overtime provisions under the Act to include computer systems analysts, software engineers, and other similarly skilled professional workers, even if such employees are compensated on an hourly basis, as long as they are compensated at an hourly rate at least six and one-half times greater than the minimum.

Directs the Minimum Wage Review Board to contract with the Secretary to provide for the Bureau of Labor Statistics to conduct: (1) a study of the impact of increasing the Federal minimum wage on rural areas and high unemployment areas; and (2) specified surveys and research on the characteristics of minimum wage employment and the impact of modification of the scope of coverage and minimum wage levels under the Act. Directs the Board to submit to specified congressional committees the results of such studies and surveys, which are to be completed by specified deadlines.