FLSA (Fair Labor Standards Act)

What is the FLSA (Fair Labor Standards Act)?

The Fair Labor Standards Act was a sweeping employment rights Act signed into law on June 25, 1938 by President Franklin D. Roosevelt. The “wage and hour” law was both the culmination of decades of growing pressure for Federal employment regulation and worker protections and the genesis of the massive institution that touches virtually every public and private employer in the country. The FLSA controls many aspects of employment including maximum daily and weekly hours, limits on child labor, a minimum wage, and overtime pay.

History of the FSLA

Since the formation of the United States, reformers have pushed for employment regulation and employee protections. During the 1880s, employee rights activists focused their efforts at the state level. Proponents lobbied for a multitude of workplace protections including outlawing or significantly restricting child labor, limiting working hours, and mandating employers pay a modest minimum wage.

Child labor was common in the United States throughout the 1800s and early 1900s, despite considerable opposition. Reformers decried what they deemed as deplorable working conditions and the fact that many working children didn’t receive an education. In the century preceding the passage of the FLSA, many states passed laws that attempted to put limits on child labor.

Employers challenged most child labor laws and more often than not, courts struck them down as unconstitutional. Many of the challenges went all the way up to the Supreme Court which consistently ruled in favor of employers. Similarly, reformers lobbied state legislatures for a mandated minimum wage and limits on hours worked during the workweek.

As the labor movement gained steam despite mixed success at the state level, reformers set their sights on a Federal bill. Though the FLSA was more comprehensive than any employment regulation previously passed, it applied to far fewer businesses than supporters had hoped. Subsequent changes to the FLSA broadened the protections.

“The FLSA changed the entire employment culture of the United States and easily rivals Society Security in its importance.” Time.com

How does the FLSA affect employment?

As previously discussed, the most well-known regulations contained in the FLSA include those mandating a minimum wage, overtime pay, maximum working hours, and limits on child labor. However, there are hundreds more that govern specific job roles, industries, and types of businesses.

The FLSA established a Federal 25-cent minimum wage. Congress has periodically increased the minimum wage in the subsequent decades. In 2009, the Federal minimum wage was increased to $7.25 per hour, where it stands as of this writing. As of 2020, 29 states and Washington D.C. had set a higher minimum wage.

How does the FLSA regulate overtime pay?

The Act mandated higher pay for overtime, defined as hours on the clock worked after a 40 hour workweek. The Act set the increased rate at one-and-a-half times the worker’s standard rate. This has become known colloquially as “time and a half.” In 1940, the FLSA created an exemption for some job roles it characterized as “executive, administrative, and professional.” The “white-collar” exemption continues to have significant implications for employers because of its impact on labor costs.

What are the FLSA recordkeeping requirements?

The FLSA also has recordkeeping requirements. All employers must keep records for every employee. These include name, Social Security number, address, date of birth (if younger than 19), gender, total wages per pay period, date of payments and more. For employees who are hourly, the employer needs to maintain records that show the number of hours worked each workday. To maintain FLSA compliance, it’s important that the system employers use to track time and attendance is accurate.

What tools can help employers comply with the FLSA?

A Human Resources Management System (HRMS) can help employers comply with the FLSA. An HRMS automates many workforce management tasks and includes alerts that notify managers of an impending violation so they can take action to prevent it.

HRMS FLSA compliance features:

  • Accurate, automated employee time tracking
  • Alerts for overtime hours thresholds
  • Advanced scheduling with overtime rules
  • Automated recordkeeping and reporting
  • Employee classification (overtime exempt vs non-exempt)

See also

Additional resources

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