5. What is the “Fair Labor Standards Act”?
The Fair Labor Standards Act (FLSA) is a law administered by the Wage and Hour Division of the Department of Labor. The FLSA places limitations and requirements on the rate and method of pay for public and private employees who are covered by the law. Specifically, it lays out the national minimum wage, age limitations, and over-time pay requirements for employees. Currently the federal minimum wage is $7.25 per hour, with a higher rate of 1 and ½ times an employee’s hourly wage for each hour worked beyond 40 hours in a given work week. The minimum wage law does not apply to certain classes of employees or certain types of jobs. Further, there are other exemptions based on ancillary benefits and privileges provided to the employee, such as meals, insurance, retirement benefits, etc. The FLSA generally prohibits minors under the age of 14 years from working for compensation outside of a family business or agriculture. It further limits the number of hours that an adolescent between the ages of 14 and 16 can work in a given workweek. It may also proscribe employing minors below the age of 18 years in certain positions (such as dangerous positions or positions charged with handling controlled substances or alcohol).
• Note: The FLSA applies to hourly employees. Salaried employees may, in some instances, work a number of hours for a rate of pay that violates minimum FLSA requirements. The rate of salaried pay for employees who are managers or supervisors that exempts these employees from overtime pay is $47,476.
The FLSA primarily provides for civil causes of action by employees or the Department of Labor against employers who violate the provisions. The FLSA also provides for an optional complaint system whereby the Department of Labor will review the complaint and determine whether to seek action or redress. Plaintiffs may file an FLSA lawsuit against an employer in federal or state court in the jurisdiction in which the employer is organized or carries on business. Any suit must commence within 2 years from the date of the claimed violation of the law. A plaintiff may seek damages in the form of any lost or back pay associated with the violation. Further, the court may asses a penalty in the amount of any actual damages, plus court costs and reasonable attorney’s fees.
• Discussion: Why do you think the Federal Government seeks to establish standards for employee work hours and compensation? Should the Federal Government (or state governments) regulate this area? Why or why not?
• Practice Question: Mark runs a small business with his business partner, Frank. His daughter, Amy, wants to make some extra money and asks her father for a part-time job. What information do you need to know about this situation to determine if Mark could face liability under the FLSA if he employs Amy?