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Wage and Hour Laws
The Fair Labor Standards Act of 1938, as amended, (FLSA) governs the method and rate of pay to be given to virtually all employees in the workforce, including those who are members of unions. An employer is required to comply with the FLSA if it is covered by the act on either an enterprise or individual basis.
Under the FLSA, a covered employer is required to pay a minimum wage regardless of whether the employee is paid hourly, by the job, by piece, by incentive or by any other basis. The mere fact that an employee is paid a salary, or is crowned with an impressive title, does not mean that the FLSA does not apply.
If state law requires a higher minimum wage than the FLSA wage, the state law minimum wage must be paid. The minimum wage requirement is not static, but may change with circumstances over time. The FLSA also requires that all covered employees, unless they are categorized as exempt from this requirement, receive overtime pay for hours worked in excess of forty hours per workweek at a rate not to fall below one-and-a-half times their regular rate of pay. The regular rate of pay for an employee under the FLSA is defined as all remuneration, including production bonuses, shift differentials, and attendance bonuses, divided by the total hours of work in the workweek. The following employees are categorized as exempt from the overtime pay requirement, so long as their salaries meet the statutory minimum amount:
- Professionals who have specialized training for their job;
- Employees whose work directly relates to the business /management operations of the employer;
- Employees who work with computers (if their hourly rate meets the statutory minimum amount);
- Employees who work in outside sales; and
- Employees who are engaged in creative or artistic endeavors.
The FLSA requires employers to keep records on wages, hours, and other information as set forth in the Department of Labor's recordkeeping regulations. Although the FLSA requires that this information be kept, it does not require that it be recorded in any particular manner, or on any particular forms. With respect to a typical employee who is subject to both minimum wage and overtime pay provisions, the following records must be kept:
- Personal information such as the employee's name, home address, occupation, sex, and birth date (if under 19 years of age);
- Information regarding hour and day when workweek begins;
- Data on the total hours worked each workday and each workweek;
- The employee's total daily or weekly straight-time earnings;
- The regular hourly pay rate for any week when overtime is worked;
- The total overtime pay for the workweek;
- Information regarding deductions from or additions to wages;
- The total wages paid each pay period; and
- The date of payment and pay period covered.
The FLSA does not provide a broad protection for employees. It does not cover, regulate, or require vacation, holiday, severance or sick pay, rest periods, premium pay for weekend and holiday work, pay raises or fringe benefits, discharge notices, paystubs or income tax W-2 forms. Individual state laws, however, may cover these areas or they may be bargained for terms between the employer and the employees or the employee representative. The FLSA also does not limit the number of hours in a day, or days in a week, that an employee may be required or scheduled to work, provided the employee is at least sixteen years old. If the employee is under eighteen, there are child labor laws under the FLSA that may apply to limit the nature of work that the employee can be required or requested to perform. State laws may limit the hours that employees older than sixteen years of age can be required to perform.
The Wage and Hour Division of the Department of Labor enforces the FLSA. Investigators, as authorized representatives of that division, have the authority to conduct investigations and gather data on wages and other employment conditions or practices, in order to monitor compliance with the FLSA. Where violations are found, they also may recommend changes in employment practices in order to bring an employer into compliance with the FLSA. Employees who are adversely effected by the failure of the employer to follow the FLSA may recover back wages for underpaid work and/or unpaid overtime wages, provided the Secretary of Labor has not already commenced a suit on their behalf. An employer who violates the FLSA may be criminally prosecuted and fined. The level of the fine depends on the nature of the violation and the employer's history of compliance with the FLSA. The FLSA also prohibits the shipment of goods in interstate commerce that were produced in violation of the Act.
In addition to governing minimum wages, the FLSA also contains equal-pay provisions that prohibit sex-based wage differentials between men and women employed by the same employer, who perform jobs that require equal skill, effort, and responsibility and that are performed under similar working conditions. The Equal Employment Opportunity Commission enforces this portion of the FLSA, and other equal-pay provisions.
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