Fair Labor Standards Act of 1938 (FLSA)

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The Fair Labor Standards Act of 1938 (FLSA) may be one of the most challenging laws for employer compliance. This act passed in 1938 defines minimum wage, overtime pay, and child labor provisions.

Overtime

Maybe the most challenging provision of the law is the requirements for overtime payment. The FLSA provides for exemptions for paying overtime for six job categories: executive, administrative, learned professional, creative professional, computer, and outside sales. Determining eligibility to not pay overtime is complex and often leads to employers being fined. The U.S. Department of Labor, Wage and Hour Division provided Fact Sheet #17A as guidance in regard to determining exemption status.

Minimum Wage

Establishing a minimum wage may appear simple. That is until you take into consideration the financial impact on organizations, geographic differences in wages, and employee expectations. This is further compounded with federal and state regulations concerning minimum wages. Minimum wage increases also create challenges for employers, such as: how to handle salary compression, impact on pay structures, and impact on the overall budget.

Child Labor

This provision under FLSA focuses on protecting children from being overworked and working in hazardous conditions. Although employers are required to comply with the law there is limited judicial activity around compliance. More specifically, several industries targeted for enforcement initiatives in 1999 included agriculture, retail trade, restaurants, garment manufacturing, and health care.

Compensable Work Activities

The Portal-to-Portal Act of 1947 basically amended the FLSA to include what work activities are compensable. This act applies to nonexempt employees and helps in determining what activities are compensable. Table 2-3 in the Martocchio text provides some guidance on activities considered compensable. Additionally, Table 2-4 in the Martocchio text provides the U.S. Department of Labor definitions of the compensable factors.

Common FLSA Violations:

• Paying insufficient overtime
• Violating minimum wage rules
• Off-the-clock claims
• Misclassifying workers as exempt
• Unpaid internships or trainee programs
• Retaliation
• Misclassifying workers as independent contractors rather than as employees

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Learning Exercise 2.1

Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) of 1938 continues to impact compensation practices today. Noted above are seven common FLSA violations made by employers. The objective of this exercise is to research at least three of the violations noted above. Utilizing HR journals, newspapers, magazines, or websites provide the following details for each of the three selected. Consider using acceptable sources such as: professional journals, business newspapers and publications and website devoted to Human Resources. Sources should be recent, within the last three years. Document the sources and list the citations in your submission. If the source is a website, designate the URL of the website where the source is located.

• Identify the violation being addressed
• Summarize the case
• Note the financial settlement if appropriate
• Indicate any pending legislation that could impact or is related to the violation
• Summarize your reactions to the outcome and if you agree or disagree with the outcome and why.

Exercise Guidelines:

• Name and Student ID number (last four numbers) should be typed and appear at the top of the page
• Page Topic: “Learning Exerciser – 2.1 – Fair Labor Standards Act” should appear under the student name
• Minimum of one (1) page and no more than 2 (two) pages MS Word doc.
• MS Word doc., typed in an Arial 10 point font, single spaced
• Well written, no spelling errors or incomplete sentences
• If appropriate, include citations
• Answer the questions being asked in a direct and thorough manner

The quality of the response is more important than the length