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                  Office of the Press Secretary
                      (Nashville, Tennessee)                           

For Immediate Release June 24, 1996
                        PRESS BRIEFING BY           
                          GENE SPERLING
                 Tennessee Performing Arts Center
                       Nashville, Tennessee                            

9:45 A.M. CDT

MR. MCCURRY: All right, let me get started. I'm happy to have Gene Sperling here who can answer questions that you might have, or lay out in a little greater detail the proposal the President will make in his remarks this morning concerning both extending, expanding and deepening the Family Medical Leave Act; and then also adjusting our Fair Labor Standard Acts Requirements to provide for flexible time compensation for those who work overtime.

Gene, thanks for bailing me out.

Q Excuse me, Mike, before you step aside, do you want to comment on the Supreme Court ruling that it will hear the case --

MR. MCCURRY: Yes. As to the Supreme Court's decision to grant cert -- Mr. Bennett, the President's attorney, will have a lengthier statement -- but the White House is pleased that the Court has recognized the merit in the petition put forward by the President's attorneys. We're pleased that the Court will hear these very important constitutional issues.

Q Are you also pleased that it might move the case past the November election?

MR. MCCURRY: No comment on that.

Q Has the President been informed --

MR. MCCURRY: The President was going to be informed right during the break here, because he was obviously in the hall.

MR. SPERLING: I can do my best to try to answer any questions. If there's particular details that one needs clarification that I don't have, I can get them for you shortly.

Basically, the President today is announcing two specific legislative provisions that are designed to increase the ability of family members to balance the difficulties of being both a worker and parent and family member.

The first thing is an expansion of the Family Medical and Leave Act. We recently received the bipartisan commission's study on the Family Medical Leave Act, which was chaired by Senator Dodd and Republican Senator Craig. Very positive, nine and ten employers saying that they found the law very or somewhat easy to administer, not having impact on cost. I think that this provides strong justification for expansion. The expansion we have would go not less to more exceptional or crisis situations, but more to ensuring that a worker can take time off for a few of the routine but vital things that a parent or an adult child at times needs.

The three things that explicitly -- the provision is participating in school activities directly related to the educational advancement of a child, such as a parent-teacher conference. Second is accompanying a child to routine medical procedures or doctor's appointments. And, then, finally, accompanying an elderly relative to routine medical appointments or professional services or such matters as helping a parent or an older relative perhaps select a nursing home or move from one nursing home to the next.

This would be limited to 24 hours a year. This is to both ensure that the average person would have enough leave to cover these areas, but also not to open it up so that there is any potentials for abuse. We keep it flexible at 24 hours a year. This could mean that a parent who needed three or four hours for a doctor appointment would have that ability six times a year; somebody who needed eight hours at a time to help a grandparent or a great uncle or a father move from one nursing home to the other could also take this time without fear that they could be penalized by their workers. This would be, as I said, a legislative expansion of the Family and Medical Leave Act.

The second proposal does amend the Fair Labor Standards Act, and it would allow employer and employee, together, to work out a situation where they could have up to a limit of 80 hours of flex time, paid flex time. So, in other words, for every hour of overtime, every hour that you work over 40 hours under the Fair Labor Standards Act, the employer must pay one hour and a half in overtime. That is the existing law. This would allow, if the employer and employee chose, for that our and a half to be taken as paid flex time. And we would allow that to be accumulated up to 80 hours, up to an 80-hour limit.

The important part about our provision is one has to understand that the original purposes of the Fair Labor Standard Act was the belief that, you know, there was a need to protect workers, particularly workers who did not have a tremendous amount of power in the work place, from being in any way abused or work to excessive amounts, or from employers to preventing hiring additional workers when that was the right thing. And as a disincentive towards those abuses, they said that there should be an hour and a half of overtime for every pay for every hour of overtime worked.

Now we are trying to branch out and allow more flexibility. But the key is, can you do that while still making sure that it is employee choice and that there is real protections against coercion, and that there really is financial protections if the company were to go bankrupt. Some of these issues are not issues that have to be worried about, particularly bankruptcy, in the public sector. But in the private sector they are very important.

And what we and the President is trying to show today is that he believes that we can make this major expansion, make this major reform in allowing for flex time, but that we can do so in a way that does allow for employee choice that makes sure, or at least does everything we can to minimize the potential for coercion of the employee at the work force.

This is a fairly sharp contrast to many of the provisions to the Republican bill that's up there right now. We list some of these in the handout we gave. But one, for example, is the fact that under our provision there must be a written agreement. In other words, we do not want to allow for the situation where the employer simply tells an employee he has to take something in comp time and it is simply the employer's word against the employee -- there's just one word against the other. By having a written agreement, that provides a significant protection against coercion for the employee.

Obviously, also, this time could also importantly interact with our first provision if somebody needed to take paid time off for a parent-teacher conference. These two could be used together. That could not be the case under the Republican alternative. Very importantly under ours, once the employer agrees to do the comp time -- excuse me, what we call the flex time -- the employee, once they give two weeks notice, can use that flex time as they want -- once they give the two weeks notice. If they give less than two weeks notice, the employer can object if he feels so -- he or she feels it would unduly burden their business.

It is important to note that under the Republican provision the ultimate control always rests with the employer. The employee can choose to work overtime believing they're going to use it for flex time, and the employer is allowed to renege at any time by saying that taking the flex time would be an undue burden -- no matter how much notice is given. They could repurchase back and decide that they had changed their mind and wanted to give it in overtime instead of comp time. Our provision, again, ensures that the employee maintains ultimate control and can decide with two weeks notice when to use it. Employees can cash out their flex time with two weeks notice at any time. And, as we say, we keep an 80-hour limit.

Again, in the public sector it can be two 40-hour, there's not much fear that the federal government or any other government is generally going to have a bankruptcy problem. However, that is a very major problem in the private sector, where there are fly-by-night companies. And so we keep an 80-hour limit.

We also would make sure that any of the hours that are used -- that if somebody chooses hours to be taken in flex time, they cannot be penalized for that in terms of how the unemployment benefits are distributed or how overtime is considered in the future. So we have a general provision that in anything related to unemployment benefits or future overtime, a worker will not be worse off because they chose the flex time over overtime.

The other thing I wanted to stress is that this is not just a proposal for next year, we are drafting legislation, we are working with members of Congress. John Hilley is working with members of Congress as we speak right now. We are working on legislation expeditiously and hope to have it this week or next. So this is something that we believe we would like to try to pass right now, if not, for a second term.

MR. MCCURRY: Thank you, Gene Sperling -- living proof that you must have a sufficient balance between work time and family time in your life. (Laughter.)

MR. SPERLING: I am here as a briefer, not a role model. (Laughter.)

Q Gene, you might have explained this, but is there addition -- what's the tax burden if you take flex time? Do you still pay taxes on what the overtime would be?

MR. SPERLING: Yes. It would count the same. So it would be an hour and a half of compensation. So it would not have any effect on one's payroll taxes. The problem that it could have is imagine that you work 10 hours of overtime and you took your overtime pay -- well, let's say you took 40 hours of overtime, you took your overtime pay.

But then you came to a situation where you were laid off. If you had already taken your 40 hours of overtime pay, then the day you were laid off you would start to become eligible for unemployment benefits. We wouldn't want somebody to say, well, because you still have comp time built up, you have to wait until that comp or flex time is used. Those are ways that people would be penalized for using the flex time. So what we do is in each of those provisions just make sure the worker is no worse off for choosing the flex time.

Q Gene, would the President veto the Republican version of this bill?

MR. SPERLING: I think that we would -- I think he strongly opposes it. We hope that it will not -- that we will be able to get our reforms our way. I think he'd very, very strongly oppose the bill and I think that there would at least be recommendations for a veto from Secretary Reich and others, if it came up in the current form.

But our policy from the President is not to, you know, comment on the hypothetical bills that are coming up as much and to see if we can be successful in convincing people, including moderate Republicans, that it is much better to have an employee choice bill -- an employee choice bill. We feel once this is on the table we hope this can be a consensus bill that would draw bipartisan support.

Q Gene, what is it in the Republican bill that makes it objectionable?

MR. SPERLING: We think that just down the line the Republican bill puts the ultimate control in the employer's hand, it has very little protections against coercion. We're trying to strike a balance here. The Fair Labor Standard Act was designed to prevent unfair coercion in the workplace. In realizing the difficulties of a modern economy you now want to realize that that well-intentioned bill also may be too rigid in some degrees in not allowing that flexibility.

In opening up the flexibility, you want to strike a balance. We feel that the Republican bill does not strike that balance. And if you create place after place in the workplace where it is simply the employer's word against, perhaps, a junior employee's word -- if there's no written agreement, if they can renege at any time, if they can choose when they want to give the flex time and when not -- then we feel that this is a bit of a wolf in sheep's clothing and we want to be very rigid on each of these provisions in saying why not make it -- if you're really serious about employee choice, you should use our provisions.

And I encourage anybody to look at the article on the front page of the Wall Street Journal today, the lead story there, which makes very clear how widespread the abuse on overtime is even now and how very real it is to have these kind of protections against coercion and insurance that it's truly an employee choice bill.

Q How are you going to enforce this? Will you have to add more people to the Labor Department?

MR. SPERLING: In the fiscal year 1997 budget the Secretary of Labor has already asked for up to 300 more people. Now, some of that is to enforce their new obligations to prevent against illegal immigration. But I know that Secretary Reich wants to use some to do more on this, and I know that the President is interested in hearing recommendations from the Secretary on how to prevent some of the abuses that are discussed in the Wall Street Journal today.

So there could be a need for even more help on the enforcement side. I think a compelling case of that is made today.

Q Gene, under the President's plan, what is the penalty if an employer reneges?

MR. SPERLING: There is double damages for violations against overtime that an employee would have earned, but was not permitted to work because the worker wanted to earn pay rather than flex time. So there could be up to double -- there could be double damages. And we would not seek to put in an overly burdensome, intentional willful violation standard that would be impossible for an employee to ever establish.

Q Why do you not cover or make allowance for sporting events, kids sporting events at school?

MR. SPERLING: Well, first of all, we are drafting the legislation now and we will be working -- I think that with all of these things, as there is a balance between giving more flexibility and preventing against coercion, we also want to draw a balance against giving more flexibility but preventing abuses. And I think in drafting the legislation you do not want to have it so broad that it could lead to time off for things that people did not think were legitimate.

So I think we wanted to focus on educational activities. I think that there could be some room for broadening that, but I think that is what they're working on in the legislation right now.

Q If you wanted to basically have the employee have as much freedom as possible and you limit them to 24 hours, why not let them choose how to use that 24 hours?

MR. MCCURRY: Why don't we take some of these questions later, because I think some people need to hear President Clinton. Gene can be around and talk to some of you individually.


END 10:02 A.M. CDT