Fair Labor Standards Act Case Study

The Fair Labor Standards Act has been amended many times and is virtually an ever-changing law, however, it does not cover all employees. There are several classes of “exempt” employees, including salaried employees in the executive/managerial, administrative, and professional areas. Outside salespeople are also considered exempt. One of the issues facing companies today is knowing which employees are exempt and which are non-exempt. There are tests to determine if an employee is exempt. In 2004 the tests changed to a standard test, which is whether or not the employee’s salary is $455/week or greater and the duties test, which allows for exempt status if more than 50% of the work performed by an individual is “exempt work.” (Pass and Broadwater) Exempt employees do not receive overtime pay, which can be a substantial cost savings to a company. My previous employer required that an exempt manager close the center each night even though we had non-exempt team leads who acted as managers in most capacities. The reason was to avoid overtime costs.

What is the Fair Labor Standards Act? The Fair Labor Standards Act is better known as the FLSA. The FLSA established a maximum hour work week, a minimum wage pay, overtime pay, and child labor laws. Many people are aware of the basic FLSA parts but big changes have come.

8. Weekly overtime pay g. Amount & nature of exempt pay h. Weekly overtime pay

Section 1197.5 automatically exempted certain gender wage differentials related to payments based on a seniority system, a merit system, quantity or quality of production, or any bona fide factor other than sex. SB 358 amends Section 1197.5 to require that an employer must now affirmatively demonstrate these differentials, and further that each underlying factor relied upon is applied reasonably, together accounting for the entire wage differential.

The salary rates the business is presently paying for the individual positions fall well within the wage cure; however, modifications will be as followed:

In the 1930’s a huge factor lead to the passage of income continuity, the Great Depression. During the Great Depression scores of businesses failed, and many workers became chronically unemployed (Martoccho, 2015). The Great Depression brought the demise of smaller businesses and forced many to work in the larger factories. Subsequently, these conditions lead to the passage of the Fair Labor Standards Act of 1938 (FLSA). Since 1938 the federal government has broadened the scope of the FLSA in 1947 twice through the passage of two acts: Portal-to-Portal Act of 1947 and the Equal Pay Act of 1963 (Martoccho, 2015). These acts are depicted to address the child labor provisions, minimum wage, and overtime pay.

The Fair Labor Standards Act of 1938, as amended is also referred to as "the Act" or "FLSA". The Act provides for minimum standards for both wages and overtime entitlement, and spells out administrative procedures by which covered work time must be compensated. FLSA also include provisions related to child labor, equal pay, and portal-to-portal activities. A general overview of FLSA is that it establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local government. In 1974 the Fair Labor Standards Act began applying to employees of the United States Federal Government. ( para.1, 2,”

The Fair Labor Standards Act (FLSA) is administered by the United States Department of Labor Wage and Hour Division.

The Fair Labor Standard Act is also known as FLSA established in 1938. President Franklin D. Roosevelt signed this bill to protect employees during the Great Depression (Perez, 2015). The sole purpose of this bill was to establish minimum wage, overtime pay, recordkeeping, and youth employment standards affecting full-time and part-time workers in the private sector and Federal, State, and local governments (Bernardin & Russell, 2013). Before this act, there was no formal written law regarding standard minimum wage, overtime compensation, adequate timekeeping for hours worked as well as the proper age limit regarding the workforce personnel.

In 1938 the Fair Labor Standard Act (FLSA) was created to counteract the abuses production line workers encountered in

As per to the Fair Labor Standards Act (FLSA), employees must get overtime pay for extra hours worked over the 40 hours per week requirement. The law also indicates that those who are exempt from the overtime pay must have an annual minimum salary of USD 23, 660 ("Overtime Pay", 2017). Two years ago the United States Department of Labor (DOL) started updating a new rule on the overtime pay which would have seen the minimum annual exempt salary doubled to USD 47, 000 (Merritt, 2017). However, the law failed to take effect after 21 states filed petitions to halt the implementation of the law and a federal judge in Texas stopped its implementation (Nagelle-Piazza, 2016). In July 2017, the U.S Department

Employers are required to pay at least one and one-half times an employee’s regulation rate of pay for each hour worked in excess of forty in a workweek according to the FLSA. While there are no limit on amount of hours employees can work, however, the FLSA limits the amount of hours that minors could work. The FLSA does however require employers a financial incentive to limit overtime because those hours of work must be compensated at a premium (Walsh, 2013). The FLSA does, however, exempt certain categories of “white collar” workers—including certain executive, administrative, and professional employees—from its minimum wage and overtime requirements (Bloom & Dellatore, 2015). This regulation or rule has not been changed for well over 40 years, with a few adjustments that was made by then President Bush in 2004.

The Fair Labor Standards Act was established in June of 1938 in order to protect workers from abuse, overworking, and child labor as well as to ensure that employees are at least making minimum wage (Perez, 2015). The FLSA is always being tweaked and updated in order to keep up with the ever changing world. It was updated numerous times for minimum wage in order to allow citizens to attempt to become part of the middle class, then updated again to distinguish how many hours are allowed in the work week as well as equal pay for women (Perez, 2015). All together this act was put in place to protect and aid the working class and to allow them what is right and fair.

The very low salary level for the exemptions as currently constructed has at least two serious negative consequences for employees and employers beyond the direct effect of excluding millions of workers from the FLSA’s protections. First, it facilitates misclassification of workers as exempt who should be receiving overtime. Because the overwhelming majority of salaried employees are paid more than the current salary level for the exemptions, some employers may want to avoid the payment of overtime by trying to shoehorn into the exemption relatively low-paid employees who were never intended to be exempt from overtime and who do not meet the duties test. For the same reason, the low salary level encourages employers to manipulate employees’

Those employees lucky enough to receive salary rises during 2016 are likely to see a smaller increase than in previous years, with just 10 per cent of respondents expecting salary increases of two per cent or more. This is a reduction of more than 40 per cent on 2015 responses to the same question. Despite all of the cuts within the sector, it’s positive to see more than half of RPs across the country expecting salary levels to increase over the next 12 months, but the sector is clearly more cautious than in previous years and this is understandable.