The FLSA and Overtime Pay

By Crampton, Suzanne M.; Hodge, John W. et al. | Public Personnel Management, Fall 2003 | Go to article overview

The FLSA and Overtime Pay


Crampton, Suzanne M., Hodge, John W., Mishra, Jitendra M., Public Personnel Management


Early federal legislation covering employees' work hours and wages was limited to employees who worked on government contracts or in specific industries. During the Great Depression, unemployment was in the double digits and people were searching for any kind of work to earn money. Employers saw the vast supply of people seeking work and took advantage of the situation. The exploitation of workers was commonplace.

Congress, seeing the exploitation by employers, decided that the workers needed protection. In answer to cries for help, the Fair Labor Standards Act (FLSA) was passed in 1938. This piece of legislation set new employment guidelines. The FLSA was designed to establish a standard 40-hour work week, set minimum wages, create child labor standards and provide provisions to pay overtime at time-and-a-half for any work done over 40 hours. Employers were required to pay higher wages for time worked over the standard period, which, in turn, was expected to encourage employers to hire more people. Considering the FLSA to be a very important piece of legislation, President Roosevelt stated, "Except perhaps for the Social Security Act, it [FLSA] is the most far reaching, far sighted program for the benefit of workers ever adopted here or in any other country."

An Overview of the FLSA

History and Purpose The FLSA, commonly referred to as the Wage and Hour Act, was passed in 1938 and since then has been amended many times. Though it has been amended over the years, the FLSA continues to deal with four main areas: minimum wages, overtime pay provisions, child labor, and equal pay for equal work (note that the Equal Pay Act is a 1963 amendment to the FLSA). In addition, the FLSA has been viewed as the foundation for other federal legislation regulating working conditions, such as OSHA (Occupational Safety and Health Act), ERISA (Employee Retirement Income Security Act), and the ADEA (Age Discrimination in Employment Act).

Two court cases were the key forces leading to the passage and constitutional acceptance of the FLSA. The federal government's initial attempts to regulate wages and hours occurred with the passage of the National Industrial Recovery Act (NIRA) in 1933. The NIRA attempted to improve work conditions during the Depression by specifying minimum wages to be paid, maximum hours to be worked, and limitations on child labor. However, in 1935 the Supreme Court held that the NIRA was an unconstitutional delegation of congressional power in the Schecter Poultry Corp. v. U.S. case. (1) While the Court recognized the need for employee protection from employers who would take advantage of employees' lack of bargaining power, the Court was also concerned with allowing the free market to prevail.

As a result of the NIRA ruling, Congress passed the Walsh-Healy Act in 1936, which set minimum standards for wages for government contractors and required that hours worked in excess of 40 per week be paid at an overtime rate of time-and-a-half the regular rate of pay. The Walsh-Healy Act was very limited in its coverage--employees who are classified as administrative, professional, office, custodial, maintenance, beginners or disabled were not included in the provisions.

In 1937, a minimum wage provision for women in the state of Washington was challenged and subsequently presented before the Supreme Court in the West Coast Hotel Co. v. Parrish case. Despite the fact that the Supreme Court had struck down the NIRA, the Court ruled that some regulation of working conditions was a valid exercise of government power. After the West Coast Hotel decision, President Roosevelt informed Congress that "All but the hopelessly reactionary forces will agree that to conserve our primary resources of manpower, government must have some control over maximum hours, minimum wages, the evil of child labor and the exploitation of unorganized labor." (2) Encouraged by the Court's decision and recognizing the need to provide protection to more employee groups, the federal government moved to directly regulate hours and wages in general by passing the FLSA on June 25, 1938. …

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