The Fair Labor Standards Act of 1938 (FLSA), , ch. 676, , June 25, 1938, is a United States labor law that creates the right to a minimum wage, and "time-and-a-half" overtime pay when people work over forty hours a week. It also prohibits employment of minors in "oppressive child labor".See and . It applies to employees engaged in interstate commerce or employed by an enterprise engaged in commerce or in the production of goods for commerce, unless the employer can claim an exemption from coverage. The Act was enacted by the 75th Congress and signed into law by President Franklin D. Roosevelt in 1938. The FLSA is considered the last legislation of the New Deal.
Clauses of the Act
Minimum Wage Since 2009, the Federal Minimum Wage has held steady at $7.25 per hour. However, depending on the state in which someone lives, the minimum wage can be higher to compensate for the cost of living in that area.
Child Labor The Fair Labor Standards Act specifically states the ages at which someone is able to begin working. Generally, this is between the ages of 14 and 15. However, there are specific exemptions for people working in non-hazardous occupations such as the entertainment industry. In these cases, children are allowed to work at ages younger than fourteen with strict regulations regarding schooling and hour limits.
Overtime Pay Overtime pay pertains to an increase in pay for every hour worked above the 40-hour full-time workload. This means that anyone who works more than 40 hours per workweek for a single employer is entitled to one and a half times their hourly pay for each hour worked above this limit. This provision applies solely to workers who are non-exempt under the language of the act.
Record Keeping The Fair Labor Standards Act gives specific guidance on how long employers are required to maintain records on each of their employees. These records contain items like timesheets, overtime records, and other things specifically applicable to the employees.
Practical application The Fair Labor Standards Act applies to "employees who are engaged in interstate commerce or in the production of goods for commerce, or who are employed by an enterprise engaged in commerce or in the production of goods for commerce" unless the employer can claim an exemption from coverage. Generally, an employer with at least $500,000 of business or gross sales in a year satisfies the commerce requirements of the FLSA, and therefore that employer's workers are subject to the Fair Labor Standards Act's protections if no other exemption applies. Several exemptions exist that relieve an employer from having to meet the statutory minimum wage, overtime, and record-keeping requirements. The largest exceptions apply to the so-called "white collar" exemptions that are applicable to professional, administrative and executive employees, though exemptions also exist for jobs such as movie theater workers. Exemptions are narrowly construed, as an employer must prove that the employees fit "plainly and unmistakably" within the exemption's terms.
The Fair Labor Standards Act applies to "any individual employed by an employer" but not to independent contractors or volunteers because they are not considered "employees" under the FLSA. Still, an employer cannot simply exempt workers from the Fair Labor Standards Act by calling them independent contractors, and many employers have illegally and incorrectly classified their workers as independent contractors. Some employers similarly mislabel employees as volunteers. Courts look at the "economic reality" of the relationship between the putative employer and the worker to determine whether the worker is an independent contractor. Courts use a similar test to determine whether a worker was concurrently employed by more than one person or entity; commonly referred to as "joint employers". For example, a farm worker may be considered jointly employed by a labor contractor (who is in charge of recruitment, transportation, payroll, and keeping track of hours) and a grower (who generally monitors the quality of the work performed, determines where to place workers, controls the volume of work available, has quality control requirements, and has the power to fire, discipline, or provide work instructions to workers).
In many instances, employers do not pay overtime properly for non-exempt jobs, such as not paying an employee for travel time between job sites, activities before or after their shifts, and preparation central to work activities. If an employee is entitled to overtime, the employer must pay them one and a half times their "regular rate of pay" for all hours they work over 40 in the same work week.
Employees employed in a ministerial role by a religiously affiliated employer are not entitled to overtime under the act.
During World War II, the Army-Navy "E" Award for excellence in war production required maintaining the fair labor standards established under the Act.
Exemptions The Fair Labor Standards Act sets minimum wage, overtime pay, recordkeeping, and child labor standards, but certain employees may be exempt. The exemptions include executive, administrative, professional, computer employee, and outside sales exemptions.
Exemptions are determined using multiple factors. However, one of the most prominent factors about whether or not an employee is exempt comes from how the specific employee is paid. If the employee is paid a salary, rather than an hourly compensation, that employee is exempt because their pay does not depend on the number of hours worked. Therefore, they can work above the 40-hour full-time limit, and still not receive overtime pay.
Tipping Under the Fair Labor Standards Act, an employer has to pay each employee the minimum wage, unless the employee is "engaged in an occupation in which the employee customarily and regularly receives more than $30 a month in tips". If the employee's wage does not equal minimum wage, including tips, the employer must make up the difference. However, the employee must be allowed to keep all tips, either individually or through a tip pool.§ 531.54 Tip pooling. :: PART 531-WAGE PAYMENTS UNDER THE FAIR LABOR STANDARDS ACT OF 1938 :: CHAPTER V-WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR :: Title 29 - Labor :: Code of Federal Regulations :: Regulations :: Law :: Justia. Law.justia.com. Retrieved on 2013-08-12. A tip pool may also contain only "employees who customarily and regularly receive tips". "The phrase 'customarily and regularly' signifies a frequency which must be greater than occasional, but which may be less than constant."
While the nomenclature of a job title is not dispositive, the job of "busboy" is explicitly validated for tip-pool inclusion by an authoritative source. "A busboy performs an integral part of customer service without much direct interaction, but he does so in a manner visible to customers. ... Thus, for a service bartender to be validly included in a tip pool, he must meet this minimal threshold in a manner sufficient to incentivize customers to 'customarily and regularly' tip in recognition" of his services (though he need not receive the tips directly).
Legislative and administrative history
1938 Fair Labor Standards Act The Fair Labor Standards Act was originally drafted in 1932 by Senator Hugo Black, whose proposal to require employers to adopt a thirty-hour workweek met fierce resistance.
In 1938, a revised version of Black's proposal was passed. The revised version was instrumentally supported by a number of notable people, including Frances Perkins, Clara Mortenson Beyer from the Bureau of Labor Standards within the United States Department of Labor, as well as Congresswoman Mary T. Norton.Ware, Susan. (2004). Notable American Women: Completing the Twentieth Century. Beyer, Clara Mortenson. The revised proposal adopted an eight-hour day and a forty-hour workweek and allowed workers to earn wage for an extra four hours of overtime as well. According to the act, workers must be paid minimum wage and overtime pay must be one-and-a-half times regular pay. Children under eighteen cannot do certain dangerous jobs, and children under sixteen cannot work in manufacturing or mining or during school hours. Though it did not cover executives, seasonal employees, and some other groups, the Fair Labor Standards Act gave raises to 700,000 workers, and US President Franklin Roosevelt called it the most important piece of New Deal legislation since the Social Security Act of 1935.
1947 Portal-to-Portal Act In 1946, the US Supreme Court ruled in Anderson v. Mt. Clemens Pottery Co. that preliminary work activities controlled by the employer and performed entirely for the employer's benefit are properly included as working time under the FLSA.
In response, Congress passed the 1947 Portal-to-Portal Act, which narrowed the Supreme Court's decision.Starks, Louis. "Gives His Reasons: Truman Approves Portal Suit Bar". The New York Times. May 15, 1947. p. 1. It specified exactly what type of time was considered compensable work time. In general, as long as an employee is engaging in activities that benefit the employer, regardless of when they are performed, the employer has an obligation to pay the employee for that time. The act also specified that travel to and from the workplace was a normal incident of employment and should not be considered paid working time.
The act stated that employees had two years of performing the work to file a lawsuit for uncompensated time. Upon signing the act, President Harry Truman urged Congress to increase the minimum wage from 40 cents per hour to 65 cents per hour.
1949 Fair Labor Standards Amendment The full effect of the FLSA of 1938 was postponed by the wartime inflation of the 1940s, which increased (nominal) wages to above the level specified in the Act. On October 26, 1949, President Truman signed the Fair Labor Standards Amendment Act of 1949 (ch. 736, , , ).Leviero, Anthony. "Truman Signs Pay Rise Bill; Drive for $1 Minimum Starts: Truman Signs Minimum Wage Bill; Drive for Rise to $1 an Hour Starts". The New York Times. October 27, 1949. p. 1.
The act defined an employee's "regular rate" of pay for purposes of computation of overtime pay.Crowther, Rodney. "Truman Signs Minimum Pay Legislation: 75-Cent Wage Base Law To Become Effective After 90 Days". The Baltimore Sun. October 27, 1949. p. 2. The act specified that employees were covered by the Fair Labor Standards Act if they are "directly essential" to production of goods for interstate commerce. The act increased the minimum wage from 40 cents to 75 cents per hour, effective January 24, 1950. The act prohibited oppressive child labor in commerce or in the production of goods for commerce. The act also included a few new exemptions for special worker classes.
1955 amendment In 1955, President Eisenhower urged Congress to amend the FLSA in order to increase the number of employees who are covered by minimum wage laws and to increase the minimum wage itself to 90 cents per hour.Loftus, Joseph A. "Eisenhower Urges Wage Law Spread: Subordinates Minimum Pay Increase to Coverage for More Workers". The New York Times. April 28, 1955. p. 23.Knighton, William, Jr. "President Signs Bill Setting Minimum Pay At $1 An Hour". The Baltimore Sun. August 13, 1955. p. 4. At the time, retail workers and services workers were not covered by minimum wage laws.
Congress passed an amendment to the FLSA, and President Eisenhower signed it on August 12, 1955. The amendment increased the minimum wage from 75¢ per hour to $1 per hour, effective March 1, 1956. Despite a push by some members of Congress, retail workers, service workers, agricultural workers, and construction workers were still not required to be paid at least the minimum wage.
1961 amendment