Academic journal article Journal of Legal, Ethical and Regulatory Issues

FLSA and the Minimum Wage: Employee Friend or Foe

Academic journal article Journal of Legal, Ethical and Regulatory Issues

FLSA and the Minimum Wage: Employee Friend or Foe

Article excerpt

INTRODUCTION TO FLSA

The Fair Labor Standards Act ("FLSA" or "The Act), which is referred to as the "wage and hour law," establishes the federal minimum wage and hour standards for covered employees (29 U.S.C. [section] 201 et seq). The FLSA requires that employers pay employees at least the hourly minimum wage, which is currently $7.25 per hour (The Wall Street Journal, 2009). In addition to minimum wage standards The Act addresses several other employment issues such as overtime pay of one-and-one-half the rate of regular pay for hours worked in excess of 40 hours in a workweek (29 U.S.C.). Most jobs are governed by the FLSA, but some are not. In addition to jobs specifically excluded by the FLSA, such as many agricultural employees, there are many jobs covered by other specific labor laws such as railway workers being covered by the Railway Labor Act and truck drivers being covered by the Motor Carriers Act (29 U.S.C. [section] 213(a) (6)).

Although the FLSA was put in place to help workers, the protections it attempts to provide are limited and flawed. In addition to the large number of employees not covered by the FLSA an employee that the FLSA classifies as "exempt" has virtually no rights at all under the FLSA overtime rules. About all that an exempt employee is entitled to under the FLSA is to receive the full amount of base salary for any work period during which the employee performs "any" work. Nothing in the FLSA prohibits an employer from requiring an exempt employee from clocking in and out or to work a particular schedule or to make up time lost to absences. The FLSA also does not limit the amount of work time an employer may require or expect from an employee on any schedule. In addition the coverage of the FLSA can be confusing to workers and employers alike. This statute, however, is the subject of a voluminous amount of litigation, including large class-action lawsuits. Needless to say, these lawsuits are costly to businesses. It is vitally important for employers to grasp the rules provided by the FLSA and to correctly classify its employees when these classifications are not easy or intuitive. Many employers are finding that having a good human resources professional and/or inside or outside counsel versed in the FLSA is an expense worth having in the long run.

According to the U.S. Department of Labor, "All employees of certain enterprises having workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials that have been moved in or produced for such commerce by any person are covered by FLSA." (Vance, 2006). Despite this the FLSA is not all-inclusive and does still permit employers and employees to negotiate when it comes to many elements of their employment agreement. The FLSA does not regulate time off for vacations, holidays, or breaks for meals (Vance, 2006). The Act also does not control sick pay, extra pay for holidays and weekends, pay raises or benefits (Vance, 2006). The Act does not even attempt to regulate how many hours a day or days a week an employer can require his employees to work, yet for some reason Congress has decided through the act to set an artificial floor on the value of labor (Vance, 2006).

Although the FLSA addresses additional issues such as overtime pay, its key function is to control the minimum wage. The Act has been amended several times to increase the minimum wage with the most recent changes passing in 2007 when the federal minimum wage stood at $5.15 (Filion, 2009). The 2007 amendments provided for a three-tiered increase in the minimum wage with the final bump raising the minimum rate from $6.55 to $7.25 per hour on July 24, 2009 (Filion, 2009). While these amendments were proposed in an effort to aid workers on the lower rungs of the employment ladder, the timing could not have been worse for business or employees. The new minimum wage provided workers with an additional $1. …

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