Deregulation Works Best When Regulation Is Needed Least

I happened today upon a mention of a small bill I hadn’t heard of, the Working Families Flexibility Act.  It’s a GOP bill, and upon first glance it actually seems like a great idea.  Today, when federal employees work overtime they get paid time-and-a-half, like private sector workers – but employees have the choice of turning down the excess pay and turning it into vacation time instead, called “comp time”.  The Working Families Flexibility Act would allow private-sector workers to have the exact same option.  On the face of it, this seems like a pretty sweet option to have, because to a lot of people a marginal hour of personal time is much higher than the marginal half-hour of pay for overtime.

My first reaction to this was that this is a rare example of the GOP attempting to tackle subjects that will actually help people’s lives.  Instead of yet another tax incentive targeted at “small business job creators” or rolling back EPA protections, it is an attempt to remove some regulations that actually impede flexibility that both employers and employees would like.

Upon thinking it through further, I’ve realized there’s a huge problem with it – looser regulation doesn’t work in a low-trust and unsupervised environment.  For skilled workers with a stable relationship with their employer and generally-honored work contracts, this is a great idea – but it relies on two things: employers keeping honest time records, and employers honoring time-off requests.   Unpaid overtime is already a huge subject of work-related disputes, as many employers rationally assume they can screw over low-skilled labor.  This isn’t likely to change, but instead becomes more open to chicanery.  With this new provision, employers can force employees to “voluntarily” take the “comp time” option instead of overtime and then deny them their ability to use the comp time.

This could be remedied either by a high degree of mutual trust between employees and employers, or vigorous enforcement.   “Comp time” would likely work well if employees and employers could be trusted to not take advantage of it – say a combination of high-skilled workers with relatively scrupulous employers. Of course, that is not the situation of the vast majority of wage workers in the US.  It could also work well if labor law was more vigorously enforced, but that seems like a long shot.  The National Labor Relations Board has been chronically understaffed for many years, mainly because business would prefer to see its operations grind to a halt.  In short, this provision as written seems likely to lead to large-scale abuse.

Also worth noting – this type of “workplace flexibility” rhetoric is naturally suited to appeal to writers, thinkers, and politicians, even those of a liberal bent.  Opinion leaders generally come from a high-skill career background in which deregulation would work really wellCongresswoman Roby, who sponsored the bill, is a former lawyer and would no doubt have loved the chance to take extra personal time from her accomplished career, and could count on her firm to honor her vacation.  I doubt she’s ever been screwed over by an employer Wal-Mart style.  The potential for abuse may simply not occur to many politicians who come from a background totally alien to the subject at hand.

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