In an effort to protect workers, President Roosevelt signed the Fair Labor Standards Act (FLSA) in 1938. The Act, among other things, provided for a federal minimum wage and mandatory pay for overtime work. In 1938 the minimum wage was set at 25 cents. Today, the minimum wage is $6.55 an hour and that is set to rise to $7.25 per hour on July 24, 2009. However, the law does not apply to all U.S. workers.
Who is Covered by the FLSA
Many employees are protected by the FLSA, such as:
· Employees who work for employers who have more than 2 employees and who do at least $500,000 of business annually;
· Employees of the following industries: hospitals, medical or nursing care facilities, schools, preschools and government agencies. Employees in these industries are protected by the FLSA regardless of the number of employees or the dollar amount of the annual business conducted;
· Employees whose work regularly involves interstate commerce. This can potentially include any employee of a business who is involved in manufacturing, packaging or shipping goods out of state, who regularly makes phone calls or sends letters out of state or who travels out of state for business. This coverage is interpreted broadly and involves many workers.
Who is Exempt from FLSA Requirements and Protections
While it may seem that the protections of the FLSA are expansive and cover many workers, there are several notable exceptions to FLSA coverage. Those exceptions include:
- Workers with Disabilities: if a worker’s disability actually impacts their job performance then an employer can request an authorizing certificate from the Department of Labor Wage and Hour Division which would allow the employer to pay the employee a special minimum wage. The special minimum wage must be approved by the Wage and Hour Division prior to implementation and must be based on the individual worker’s actual productivity in proportion to the wages and productivity of similar workers without disabilities. Overtime pay and other FLSA provisions still apply to disabled workers receiving special minimum wages.
- Students: an employer may obtain a certificate from the Wage and Hour Division which allows the employer to pay a full time student not less than 85% of the regular minimum wage. The certificate also limits the hours that a full time student can work. If the student is a high school student who is at least 16 years old and enrolled in a vocational course then the employer can petition to pay the student not less than 75% of the regular minimum wage for as long as the student is enrolled in the vocational program.
- Employees under Age 20: An employer may pay an employee who is under age 20 $4.25 an hour for the employee’s first 90 days of employment so long as the employee’s work does not displace other workers. After the first 90 days, the employee must be paid the full minimum wage unless another exception applies to the employee.
- Employees who Receive Tips: Special rules apply to employees who generally receive $30 a month or more in tips. An employer may consider the employee’s tips as part of his or her wages but still must be not less than $2.13 an hour in direct wages. If the employee’s tips do not make up the difference between $2.13 an hour and the prevailing minimum wage then the employer must make up the difference.
It is important to note that some of the employees who exempt from FLSA provisions may be protected by other federal or state wage and hour laws.
FLSA was enacted to protect the rights of workers and to make sure that employees are paid at least a living wage for the work performed. It is an important law with very real and important consequences and one with which every employer and employee should be familiar.