Fair Labor Standard Act: A Case Study

The Fair Labor Standards Act has been amended many times and is virtually an ever-changing law, however, it does not cover all employees. There are several classes of “exempt” employees, including salaried employees in the executive/managerial, administrative, and professional areas. Outside salespeople are also considered exempt. One of the issues facing companies today is knowing which employees are exempt and which are non-exempt. There are tests to determine if an employee is exempt. In 2004 the tests changed to a standard test, which is whether or not the employee’s salary is $455/week or greater and the duties test, which allows for exempt status if more than 50% of the work performed by an individual is “exempt work.” (Pass and Broadwater) Exempt employees do not receive overtime pay, which can be a substantial cost savings to a company. My previous employer required that an exempt manager close the center each night even though we had non-exempt team leads who acted as managers in most capacities. The reason was to avoid overtime costs.

For centuries, there has been a common relationship between employers and employees. Over the course of that time, the workplace and the jobs within it have evolved as new jobs were created, ways to execute tasks became more advanced and laws were enacted to put into place fair employment for those in the workforce. In 1938, congress would pass and President Roosevelt would sign the Wages and Hours Bill, more commonly known as the Fair Labor Standards Act of 1938 (FLSA). This federal statute introduced a 44 hour, seven day work week, established the national minimum wage, guaranteed overtime pay in specific types of jobs at a rate of “time and a half”, and it defines oppressive child labor, which prohibits most employment of minors. The FLSA applies to those employees engaged in interstate commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage.

Concerning the wage rate, the United States government has intervened to maintain a lower limit on the hourly wage rate of a worker’s labor by implementing a price floor known as the minimum wage rate. This legal floor on the market price of labor sets a minimum hourly pay rate for workers in the United States. Effective July 24, 2009 the federal minimum wage rate is $7.25; in states that also have minimum wage laws the employee may be subject to both federal and state minimum wage laws, in which case they are entitled to the higher minimum wage rate (U.S. Department of Labor Wage and Hour Division, 2011). Since the Fair Labor Standards Act (FLSA) was created in 1938 the federal minimum wage rate has gradually increased from $0.25 in 1938 to $7.25 present (U.S. Department of Labor Wage and Hour Division, 2011). Although continuing to increase the minimum wage rate may include potential positive factors, it would hinder the U.S. economy overall.

How will the new FLSA laws affect you? If you are making $47,476 a year or less, the new FLSA laws require your employer to pay you overtime after you work over forty hours in a week. If you are making over $47,476 a year you will not be paid overtime because your are considered overtime exempt. Being overtime exempt means you make enough money for your employer to legally not pay you overtime.

There have been similar proposals of this type of legislation throughout history. The first type of similar legislation passed was the Fair Labor Standards Act of 1938 (FLSA) which was signed by President Franklin D. Roosevelt (Grossman, 1978). This act applied to about one-fifth of the labor force but set a minimum wage to twenty-five cents an hour (Grossman, 1978). The minimum wage has increased many times since the initial passing of the FLSA. In 1949, “the minimum wage was raised from 40 cents an hour to 75 cents an hour for all workers and minimum wage coverage was expanded to include workers in the air transport industry” (U.S. Department of Labor, 2015, “Wage and Hour Division”). The federal minimum wage has been increased 22

If you own a business that has employees (other than yourself), you may, at some point, need the help of a Fair Labor Standards attorney. The Fair Labor Standards Act (FLSA), enacted in 1938, established minimum wage, overtime pay, recordkeeping and child labor standards affecting full- and part-time workers in both the private and public sectors. As an employer, you must adhere to the provisions of the FLSA or face these legal or criminal actions that only an experienced Fair Labor Standards attorney can assist you with:

The new regulation was not implemented on a nationwide basis due to an emergency motion given by the Eastern District of Texas. The salary threshold will remain the same it has been. Employees fall under exempt or no-exempt classifications when it comes to overtime standards. Exempt employees are not subject to the Fair Labor Statistics Acts overtime regulations. Most employees that are exempt employees are “white collar” exemptions. This mostly includes employees who are in administrative, professional or executive positions. For non-exempt employees, comp-time systems are illegal. Overtime does not need to be paid to exempt employees by employers to begin with so comp time arrangements are usually worked out well, as long as the base salary of pay is not interfered with. Public agencies are allowed to have comp-time systems. However, they are under statutory requirements

The Fair Labor Standard Act (FLSA) is very important to everyone not just human Resources. This Act was established to help define jobs, pay minimum wage, overtime pay, child labor, and equal pay for equal work. As time progressed so did this Act, it has been updated has minimum wage rises and new incidents happen in the workforce. The FLSA is in place to protect the employee against employers that have a motive to cheat his employees. Yet, it still needs to be more precise.

The first acknowledgment of an employer is ensuring compliance with the FLSA is to ensure all employees are classified correctly either under exempt or non-exempt. When a liability by curtailing claims for not accurately compensating employees for any overtime worked. Additionally, an employer should make sure to train their management team to be able to determine exactly what employees are considered exempt and non-exempt (SHRM,

According to dol.gov, The Fair Labor Standards Act of 1938, passed by President Roosevelt, placed restraints on how many hours an individual can work per week, child labor, and overtime. To be considered full-time, a person must work 40 hours per week. If an individual works any less, they are considered part-time. The law also introduced minimum wage, a flat line rate that all employees must get paid. Currently in the United States, minimum wage is set at $7.25. Each state can have the option to pass a law to increase it. For instance, the state of New York passed a law that will increase minimum wage in the state to $15. As if this moment, Florida’s minimum wage is $8.05. With all of the

According to Elizabeth Sykes’ PowerPoint (2017), employees in Ontario are currently required to work forty four hours a week before they can begin to receive overtime pay. Meanwhile, Americans covered by the FLSA enjoy having to work four hours less before overtime kicks in (US DoL, 2017). In the proposal for the new ESA, employees would be entitled to a forty-hour minimum before overtime. This would effectively bring us up to par with America’s Overtime Laws. This potential change would surly benefit employees, especially the ones who enjoy their job and never minded overtime in the first

"FLSA And The Minimum Wage: Employee Friend Or Foe". Journal of Legal, Ethical and Regulatory Issue 14.01 (2011): n. pag. Print.

Along with the NLRA was the Fair Labor Standards Act (FLSA) during President Roosevelt’s second term in 1938. The Act would have been approved sooner but it took multiple tries for the to get passed. The FLSA further regulates hourly wages, child labor, and regulated the maximum workweek at 44 hours. It did require or regulate individual vacations for employers. Nor did it include sick pay, meal periods, weekend or holiday pay regulations, raises, or reasons for termination. The FLSA included the private, state, government, federal employees as well as those employed with the Tennessee Valley Authority.

One major aspect of the Fair Labor Standards Act as of December 2016 is the overtime

Currently, those that earn more can only qualify for overtime pay if they don’t fall under the EAP exemption. What does this mean? In a very vague definition, the exempt employees are those that are executive, administrative, professional, outside sales, and computer employees. This is referred to as EAP or “white collar” exemption. As it stands today, all of us, especially the middle-class, are working longer hours and are more productive, yet wages have been stagnant since the mid-1970s. According to the Economic Policy Institute’s (EPI) Estimating the Number of Workers Directly Benefiting, the inflation adjusted real hourly wage for a median worker increased just 6.1 percent between 1979 and 2013, even though the overall productivity growth was 64.9 percent. The primary reason for this is that millions of middle-class workers are not getting paid for the overtime hours they are working. In 1978, 65 percent workers were automatically entitled to receive overtime pay. With the proposed changes, 40 percent of the workforce will be entitled. Still less than what it was in the past but much