The History of the Fair Labor Standards Act (FLSA)
Employment and labor laws are essential in every country to build a relationship between employees and employers. The United States has federal, state, and local labor laws. Federal labor laws contain Acts that aim to protect employees’ rights, such as the right to equal salary pay, medical and pregnancy leaves, and safety. Employees are shielded in case of discrimination against races, gender, or religions, among other negative workplace challenges (Griffith, 2018). In the United States, President William Howard signed the act of establishing the Department of Labor, which was initiated by a campaign of laborers through ‘’Voice in the Cabinet.’’ A movement aimed at promoting and developing the welfare of the workers to advance their working environments and increase their prospects for profitable employment. Initially, the Department consisted U.S. Conciliation Service, which mediated labor disputes within various institutions.
In 1933, President Franklin D. Roosevelt appointed Frances Perkins, who successfully led a campaign to convince the nation that a pension system would be humanitarian and help prevent future depressions (Nordlund, 1988). Under her tenure, the Social Security Act passed in 1935, and she revived U.S. employment services by establishing national wide employment offices. The fair and Labor Standards Acts (FLSA) became law in 1938, despite opposition from the American Federation of labor and the National Association of manufacturers.
The FLSA of 1938 originated in the new deal of President Franklin Roosevelt from 1933 to 1945, a landmark piece of legislation resulting in a significant impact on the labor movement in the U.S. The law set countrywide standards for workers of companies involved in interstate commerce, public agencies, and operation of a particular size (‘‘[Usc02] 29 USC Ch. 8: Fair labor standards’’ n.d.). The law is still active today, affecting millions of part-time and full-time employees in local, state, federal government, and private sectors. Under FLSA, the first minimum wage was developed as 25 cents per hour, with a workweek limited to 44 hours per week. In 1940 minimum wage was revised to 40 hours per week (‘‘Wages and the Fair Labor Standards Act,’’ n.d.). Following the law, standards were created to keep records of hours worked and wages paid, allowing employers to track overtime owed to workers who exceeded the standard workweek. FLSA banned child labor by limiting the working age with exceptions for family businesses and the agricultural industry. Children under eighteen were not allowed to work in some factories, mining, and any hazardous jobs.
Changes to FLSA
In 1963, FLSA was amended through Equal Pay Act that prohibited variations in pay depending on sex. Initially, men were paid higher wages for the same position as women. The Equal Pay Act leveled the uneven work field, making women compete with men for similar jobs and the same pay. Most of the amendments that have been made to FLSA have aimed at increasing the minimum wage from 25 cents to $5.25 in 1998. The U.S. Department of Labor’s (DOL) employment standards administration wage-hour division is responsible for enforcing FLSA standards. However, since 1979 Equal Employment Opportunity Community has enforced the Equal Pay Act.
In September 2019, the DOL issued a new rule known as a final rule: overtime that took effect on January 1, 2020. The final rule posed salary increments where nonexempt workers benefit from FLSA overtime protections. Under the final law announced in September 2019 to update the FLSA regulations, three criteria must be satisfied to qualify as exempt from overtime as below (‘‘Wages and the Fair Labor Standards Act,’’ n.d.). The first criteria entail a salary basis test where professionals in positions must be paid based on salary. Secondly, the salary level must be at least $35,568 annually or $684 per week as the minimum salary requirement or salary level test. Lastly, workers’ job duties must primarily entail executive, professional, and administrative duties as defined by the Department of labor regulations as the duties test. The final rule also entailed increasing the highly compensated worker threshold, increasing the threshold automatically, and counting incentives and bonus payments toward up to 10% of the new salary level.
Furthermore, in 2020 and 2021, DOL accomplished a series of rulemakings to update its laws to protect tipped workers by addressing 2018 legislative amendments to section 3 (m) together with other sections of FLSA to bar workers deliberately from keeping workers’ tips. The department updates also addressed dual jobs regulations. Workers were permitted to take partial credit against their minimum wage obligations depending on the dividends received workers. In July 2021 final rule was announced, rescinding the Joint Employer Status under the FLSA final rule.
Administration of the Law in the Workplace
The FLSA creates employment standards for youths, recordkeeping, overtime pay, and minimum wage. The law influences workers in the local, state, and federal governments as well as the private sector. In the workplace, nonexempt employees covered are entitled to a minimum wage of not less than $7.25 per hour, which was effected in July 2009 (‘‘Fair Labor Standards Act of 1938,’’ 2017). After 40 hours of work in a workweek, employees are entitled to overtime pay at a rate not less than one-half times the regular pay rate. Effective July 2009, the federal minimum wage was $7.25; however, the majority of states have their minimum wage laws (‘‘Wages and the Fair Labor Standards Act,’’ n.d.). According to FLSA minimum wage, an employee subject to federal and state minimum wage laws is entitled to a higher minimum wage.
Based on FLSA overtime, nonexempt workers covered are entitled to receive overtime pay for working hours that exceed forty per workweek. The overtime pay rate must be more than one and one-half times the standard pay rates. In any workweek, employees who are 16 years or older are not limited to the number of hours they may work. FLSA describes hours worked ordinarily to entail all the time during which a worker is at a prescribed workplace or is needed to be on the employer’s premises on duty. In the workplace, employers must outline and display posters officially underscoring the prerequisites of the FLSA and keep pay and time records of employees (‘‘Fair Labor Standards Act of 1938,’’ 2017). The provisions on child labor are designed to protect the educational chances of minors and prevent their employment in jobs that are unfavorable to their well-being or health.
Updating the Law
To update the law in the workplace, it is required that positions are evaluated for compliance with the Department of labor’s new overtime rules. All positions below the proposed salary threshold must be reviewed, and those that need adjustment must be ascertained to comply with a new threshold to allow the positions to remain exempt. Before making decisions on increasing employees’ rate of pay, the administration must review the position profile and salary grade of workers. To ensure increment is on both inside and within the assigned range for experience, skills, and performance of workers, no employee is moved to a new threshold. In addition, consideration must be made of collateral influence on internal salary equity to mitigate salary compression. It is also vital to prepare a budget to estimate the change’s effect in the workplace and consider a response on productivity, morale, and necessary procedures and processes.
References
[Usc02] 29 USC Ch. 8: Fair labor standards. (n.d.). Web.
Fair Labor Standards Act of 1938. (2017). SHRM. Web.
Griffith, K. L. (2018). The fair labor standards act at 80: Everything old is new again. Cornell L. Rev., 104, 557.
Nordlund, W. J. (1988). A brief history of the fair labor standards act. LAB. LJ, 39, 715.
Wages and the Fair Labor Standards Act. (n.d.). U.S. Department of Labor. Web.