Fair Labor Standards Act Of 1938: The Case Of Wells Fargo

As the United States endured the hardships of the Great Depression, the struggles of the working class grew and employers were able to take advantage of desperate workers by overloading hours and shrinking wages. In 1938, President Franklin Roosevelt, in his New Deal legislation, saw the opportunity to attend to the issues concerning workers involved in interstate commerce. The Fair Labor Standards Act was passed, and the President described it in the following way “Except for the Social Security Act, it (the FLSA) is the most far-reaching, far-sighted program for the benefit of workers ever adopted here or in any other country.” (Nordlund). The FLSA, as it is known, set a maximum number of

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.

Additionally, Section 8 proscribes federation fraudulent labor procedures, which include, in accordance to legal interpretation, failure to provide a reasonable representation to all participants of the bargaining constituent. (Office of the General Counsel, National Labor Relations Board, 1997)

Taking a closer look at the Fair Labor Standards Act of 1938, American workers were struggling to find jobs following World War 1 due to the number of immigrants. Yet, still today, American workers are struggling to find high paying jobs which are still partly due to the number of immigrants and refugees coming into this country daily. Relatively speaking, the minimum hourly wage over the past 70 years has not increased greatly, MacLury (1998) in 1938 it was of .25 cents and upon reaching the latest of 7.25 dollars in 2009. Over the years, lawmakers continue to change the verbiage of the FLSA, with former President Obama, Lee (2015) mad a challenge to congress, which is to live on 15,000 dollars a year. Additionally, in order

Wells Fargo fired 5300 employees. The employees took millions in fees by regularly opening new

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

Appellee violates the federal fair labor standard acts by designating an employee as a “manager” who is entitled to overtime pay when that employee’s primary job responsibilities do not require supervising other employees or exercising independent judgment, but do require day to day maintenance activities as well as retail sales.

The Taft-Hartley Act was passed in 1947 to protect the employee’s rights from the union and their unfair practices ("1947 Taft-Hartley Substantive Provisions | NLRB," n.d). The ACT changed the language of the Wagner ACT, to protect the employees who did not want to participate in union activities but they were required to become a member as one of the conditions when they were hired ("1947 Taft-Hartley Substantive Provisions | NLRB," n.d.). Another change made to protect the employees was stopping the union from overcharging the dues and fees. The amendment also noted that unions had an obligation to all members to bargain in good faith ("1947 Taft-Hartley Substantive Provisions | NLRB," n.d.).

Congress as part of the Fair Labor Standards Act (FLSA) instituted minimum wage back in 1938. The first minimum wage was at $0.25 per hour and the last minimum wage increase occurred in 2007. Over the past 65 years the minimum wage has varied considerably in inflation-adjusted buying power. It has averaged $6.60 an hour in purchasing power in 2013 dollars, but it has ranged from a low of $3.09 an hour in late 1948 to a high of $8.67 an hour in 1968. Today’s minimum wage buys somewhat more than the minimum wage has historically, although it remains over a dollar an hour below its historical high. In addition to the federal minimum wage, nearly all states within the United States have their own minimum wage laws with the exception of South Carolina, Tennessee, Alabama, Mississippi and Louisiana. Sixteen states have a minimum wage that is higher than the federal minimum wage. The first moves to legislate wages did not set minimum wages, rather the laws created arbitration boards and councils to resolve labor conflicts before the recourse to strikes.

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

The Fair Labor Standards Act was the legislation passed in 1938 which granted exceptions for the agricultural industry regarding workplace health and safety. As the text states, the act led to less wage protection, permissible child labor with exposure to even more hazards, and exemptions to small farms from federal insight on housing and sanitation. Basically, this act made it where migrant workers were not guaranteed the same protections that OSHA and HIPPA grant to U.S. citizens. Migrant workers often do not speak about this treatment out of fears of immigration. Thus, they endure it. However, I wonder if they recognize the toll these conditions are having on their health.

President Franklin D. Roosevelt signed 121 bills on Saturday, June 25, 1938 to avoid pocket vetoes 9 days after Congress adjournment. A landmark law in the nation’s social and economic development was among those 121 bills. This bill was titled Fair Labor Standards Act of 1938. The minimum hourly wage was set at $0.25, and the maximum work week at 44 hours. President Roosevelt also warned the day before the signing to not let any executives with a $1000.00 a day income cry catastrophe; that an $11.00 a week wage will have a disastrous effect on the American industry (1938). Oddly, a well-known news commentator made almost the exact response forty years later as President Roosevelt. That same emotion can be felt today when it comes

On September 8 2016, the Consumer Financial Protection Bureau (CFBP) announced that it was taking an enforcement action against Wells Fargo Bank . Wells Fargo is a Fortune 100 company and one of the "Big Four Banks" of the United States. Investigations conducted by the Bureau revealed that employees of the bank created unauthorized deposit and credit card accounts across the country to meet sales goals. Over the years, the bank’s employees opened over 1.5 million fraudulent bank accounts and 0.5 million fake credit card accounts for customers, to meet sales targets and obtain bonuses. The affected consumers, were being harmed by the associated charges and fees for these accounts. The fees include insufficient funds or overdraft fees for the deposit accounts and annual fees for credit card accounts.

Along with the consequences that it would have on urban areas. Goldschmidt also felt that “the regulations of the Labor Relations Act should be applied to the agricultural sector and that unions should not only be allowed to develop, but should be encouraged”. (Goldschmidt).

Scandals in the business world are not an uncommon topic to appear in new headlines. Recently Wells Fargo has fired over 5,000 employees for creating over 2 million fake accounts. New bank and credit card accounts were created without prior knowledge from their customers. The accounts that were created resulted in those customers inquiring fees such as overdraft fees. These fake accounts have been created over a five-year timeframe.