FLSA

Definition

The Fair Labor Standards Act (FLSA) is a federal law established in 1938 that sets minimum wage, overtime pay, recordkeeping, and youth employment standards. It is crucial in distinguishing between exempt and non-exempt employees, thereby determining eligibility for minimum wage and overtime pay protections, which are essential for ensuring fair labor practices across various industries.

5 Must Know Facts For Your Next Test

1. The FLSA applies to both private and public sector employers and covers employees engaged in interstate commerce or in the production of goods for commerce.
2. The current federal minimum wage under the FLSA is $7.25 per hour, but many states have enacted higher minimum wage laws.
3. Overtime pay is required for non-exempt employees who work more than 40 hours in a workweek at a rate of one and a half times their regular pay.
4. Certain categories of workers, like independent contractors and some seasonal workers, may not be covered by the FLSA’s provisions.
5. The FLSA includes specific regulations regarding the employment of minors, restricting their working hours and the types of jobs they can perform.

Review Questions

• How does the FLSA define exempt versus non-exempt employees, and what are the implications of this distinction?
  • The FLSA defines exempt employees as those who do not qualify for overtime pay based on their job duties and salary level, typically including executive, administrative, and professional positions. Non-exempt employees are entitled to receive minimum wage and overtime pay for hours worked over 40 in a week. This distinction is crucial because it affects how workers are compensated and helps ensure that non-exempt employees receive fair payment for their work.
• Discuss how the minimum wage provisions of the FLSA impact both employers and employees in various industries.
  • The minimum wage provisions of the FLSA set a baseline for compensation that employers must adhere to, impacting budget decisions and labor costs across industries. For employees, these provisions help ensure a basic standard of living and reduce income inequality. However, some employers argue that minimum wage laws can lead to increased labor costs, potentially affecting hiring practices or leading to layoffs if businesses struggle to meet wage requirements.
• Evaluate the effectiveness of the FLSA in protecting workers' rights since its enactment in 1938 and propose potential improvements for future labor regulations.
  • Since its enactment, the FLSA has been effective in establishing basic labor protections like minimum wage and overtime pay; however, challenges remain regarding enforcement and coverage. Many workers are still misclassified as exempt or may not be aware of their rights under the law. Future improvements could include increasing the federal minimum wage to reflect living costs better, expanding coverage to more types of workers such as gig economy employees, and strengthening enforcement mechanisms to ensure compliance with labor standards.

Related terms

Exempt Employees:

Employees who are not entitled to overtime pay under the FLSA, typically including those in executive, administrative, and professional roles.

Non-Exempt Employees: Employees who are entitled to minimum wage and overtime pay as mandated by the FLSA, usually covering hourly workers.

Minimum Wage: The lowest hourly wage that an employer can legally pay their employees, as determined by federal or state law.