Brief over view
Congress enacted the Fair Labor Standards Act on 25th June 1938. The prime aim
of the act was to exterminate "labor conditions detrimental to the maintenance
of the minimum standards of living necessary for health, efficiency and
well-being of workers". The act instituted maximum working hours of 44 a week
for the first year, 42 for the second and 40 thereupon. Minimum wages of 25
cents an hour were firmly incorporated for the first year, 30 cents for the
second and 40 cents over a period of the next six years. The Fair Labor
Standards Act also restricted child labor in all industries working in producing
goods in inter-state commerce. The act set the minimum age at 14 for engagement
outside of school hours in non-manufacturing jobs, at 16 for employment during
school hours, and 18 for dangerous occupations.
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Introduction
The Fair Labor Standards Act, adopted in 1938 is old, confusing, and no longer
serves the purpose for which it was originated. At the time of enactment, the
nation was passing through the aftereffects of the Great Depression, so Congress
gave “protection to those who toil in factory and on farm to obtain a fair day’s
pay for a fair day’s work.” At that time it was a needed and effective part of
legislation. In the midst of immense changes in the workplace, the law and the
regulations no longer serve their objective. Over the years, more and more
workers have moved from assembly line piecework to exercising independent
judgment, earning more in the process. The Act has not kept gait with these
redefined occupations and employment milieu, and this has led to exceptional
results.
The Act
The Fair Labor Standards Act of 1938 incorporates the issue of overtime pay,
minimum wage and child labor protection, and prohibits pay discrimination on the
basis of sex.
The Act applies to companies that have employees who are involved in nationwide
commerce, producing goods for nationwide commerce, or handling, selling or
working on goods or materials that have been moved in or produced for nationwide
commerce. For majority of the firms, an annual dollar volume of business test of
$500,000 applies, that is those firms under this dollar amount are not covered.
Where as the following are covered:
• Hospitals
• Institutions primarily engaged in the care of the sick, aged, mentally ill or
disabled who reside on the premises
• Schools for children who are mentally or physically disabled or gifted
• Preschools, elementary and secondary schools and institutions of higher
education
• Federal, state and local government agencies
Employees of firms that do not fit the $500,000 annual dollar volume trial may
be separately covered in any workweek in which they are separately engaged in
nationwide commerce, the production of goods for nationwide commerce, or an
activity which is closely related and directly essential to the production of
such goods. Further, domestic service workers, such as day workers,
housekeepers, chauffeurs, cooks, or full-time babysitters, are also covered if
they receive at least $1,000 in cash wages from one employer in a calendar year,
or if they work a complete 8 hours a week for one or more employers.
An enterprise that was covered by the Act on March 31, 1990, and that stops to
be covered as the increase in the annual dollar volume test to $500,000, as
required under the 1989 amendments to the Act, pursues to be subject to the
overtime pay, child labor and record keeping requirements of the Act.
Some employees are excluded from the Act's overtime pay clause or both the
minimum wage and overtime pay clause under special privilege provided in the
law. The following are exempt from both the minimum wage and overtime pay
requirements:
• “Executive, administrative and professional employees
• outside sales employees,
• certain skilled computer professionals
• Employees of certain seasonal amusement or recreational establishments;
• Employees of certain small newspapers and switchboard operators of small
telephone companies;
• Seamen employed on foreign vessels;
• Employees engaged in fishing operations;
• Employees engaged in newspaper delivery;
• Farm workers employed on small farms (i.e., those that used less than 500
"man-days" of farm labor in any calendar quarter of the preceding calendar
year);
• Casual babysitters and persons employed as companions to the elderly or
infirm.”
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The following are employees exempt from the Act's overtime pay requirements
only:
• “Certain commissioned employees of retail or service establishments;
• Auto, truck, trailer, farm implement, boat or aircraft salesworkers, or
parts-clerks and mechanics servicing autos, trucks or farm implements, who are
employed by non-manufacturing establishments primarily engaged in selling these
items to ultimate purchasers;
• Railroad and air carrier employees, taxi drivers, certain employees of motor
carriers, seamen on American vessels, and local delivery employees paid on
approved trip rate plans;
• Announcers, news editors and chief engineers of certain non-metropolitan
broadcasting stations;
• Domestic service workers who reside in their employer's residence;
• Employees of motion picture theaters;
• Farm workers”
Particular employees may be partly exempt from the Act's overtime pay
requirements, includes
• “Employees engaged in certain operations on agricultural commodities and
employees of certain bulk petroleum distributors;
• Employees of hospitals and residential care establishments which have
agreements with the employees to work a 14-day work period in lieu of a 7-day
workweek (if the employees are paid overtime premium pay within the requirements
of the Act for all hours worked over 8 in a day or 80 in the 14-day work period,
whichever is the greater number of overtime hours);
• “Employees who lack a high school diploma or who have not completed the eighth
grade may be required by their employer to spend up to 10 hours in a workweek in
remedial reading or training in other basic skills that are not job-specific, as
long as they are paid their normal wages for the hours spent in such training.
Such employees need not be paid overtime premium pay for their remedial training
hours.”
The Act requires that employers of covered employees who are not contrarily
exempt to pay these employees a least allowance of not less than $5.15 an hour
commencing September 1, 1997. Youngsters below 20 years of age may be paid a
minimum wage of not less than $4.25 an hour while the first 90 successive
calendar days of employment with an employer. Employers may not dislocate any
employee to hire another at the youth minimum wage. Employers can pay employees
on a piece-rate base, as long as they get at least the equal of the required
minimum hourly wage rate. Employers of tipped employees may contemplate the tips
of these employees as component of their wages, but must pay a straight wage of
at least $2.13 per hour if they demand a tip credit. The Act besides allows the
employment of certain individuals at wage rates under the lawful minimum wage
under certificates issued by the Department Employers wishing to employ home
workers in certain industries are required to provide written assurances to the
Department that they will follow the Act's wage and other requirements. Firing
or in any other manner discriminate against an employee is violation of the act
and subjects to the filing a complaint under the Act.
References
U.S. Department of Labor Employment Standards Administration Wage and Hour
Division, "The Fair Labor Standards Act of 1938, as Amended," WH Publication
1318, Revised August 1991.
U.S. Department of Labor Employment Standards Administration Wage and Hour
Division, "Defining the Terms - Executive, Administrative, Professional and
Outside Sales," WH Publication 1281, Revised May 1993.
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