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Fair Labor Standards Act



Definition

The Fair Labor Standards Act (FLSA) is a United States federal law introduced in 1938 that establishes minimum wage, overtime pay, recordkeeping, and child labor standards for both full-time and part-time workers in the private sector and in federal, state, and local governments. Its primary purpose is to protect employees by ensuring fair wages, reasonable work hours, and preventing the exploitation of child labor. The FLSA is enforced by the Wage and Hour Division of the U.S. Department of Labor.

Phonetic

The phonetics of the keyword “Fair Labor Standards Act” can be represented as:/feɪr ˈleɪbər ˈstændərdz ækt/ Here is a breakdown of the phonetic notation:- Fair: /feɪr/- Labor: /ˈleɪbər/- Standards: /ˈstændərdz/- Act: /ækt/

Key Takeaways

  1. The Fair Labor Standards Act (FLSA) is a federal law that establishes standards for minimum wage, overtime pay, child labor, and record-keeping for employees in the United States.
  2. Under FLSA, non-exempt employees are entitled to receive overtime pay for hours worked beyond 40 in a workweek at a rate not less than one and one-half times their regular rate of pay.
  3. The act also prohibits the employment of minors below the age of 16 in most non-agricultural industries and regulates the hours that minors aged 14-17 can work. Additionally, it prohibits employers from employing individuals under the age of 18 in jobs that are considered hazardous.

Importance

The Fair Labor Standards Act (FLSA) is a critical piece of legislation in the realms of business and finance due to its role in governing minimum wage, overtime pay, child labor, and recordkeeping for employees in the United States. By establishing these essential labor standards, the FLSA ensures the protection of workers’ rights, safeguards their well-being, and helps maintain their financial stability. Businesses must comply with FLSA provisions when setting employee compensation and work conditions, which in turn fosters an ethical and fair workplace environment while reducing potential labor disputes. Overall, the FLSA plays a crucial part in maintaining a healthy and productive workforce and contributes to a balanced, equitable economy for all.

Explanation

The Fair Labor Standards Act (FLSA) serves a crucial purpose in ensuring that employees within the United States benefit from just, equitable working conditions and remuneration. Enacted in 1938 by President Franklin D. Roosevelt, this legislation primarily functions to establish and uphold minimum wage, overtime pay provisions, and child labor standards for workers within both the public and private sectors. Through fostering reliable minimum labor conditions, FLSA aims to mitigate the detrimental impacts of unfair labor practices that can result in financial inequality and exploitation, enabling employees to maintain a reasonable standard of living and providing a foundation for workplace fairness. In addition to setting the minimum wage and overtime requirements, the Fair Labor Standards Act strives to prevent abusive labor practices by closely regulating child labor and drafting clear protective rules that stipulate the type of work that children can engage in depending on their age. The Act has evolved with time to reflect changing economic conditions, with lawmakers regularly amending the legislation to accommodate for fluctuations in inflation or emerging labor concerns. By maintaining these standards and ensuring that workplaces abide by relevant provisions, the FLSA functions as a pivotal force in supporting a balanced, equitable economy that protects and respects the rights of the American workforce.

Examples

The Fair Labor Standards Act (FLSA) is a United States federal law enacted in 1938 that establishes minimum wage, overtime pay, child labor standards, and recordkeeping requirements for both full-time and part-time workers in the private sector and certain government employees. Here are three real-world examples relating to the FLSA: 1. Minimum wage changes:In July 2009, the FLSA increased the federal minimum wage from $6.55 to $7.25 per hour. This change affected millions of workers across the United States, ensuring they received a higher base pay for their work. Employers were required to pay their workers at least the new minimum wage rate, helping improve the financial situation for low-paid employees. 2. Overtime pay for salary workers:In 2016, the Department of Labor issued an update to the FLSA’s overtime regulations, raising the salary threshold for overtime pay eligibility from $23,660 to $47,476 per year. This change meant that any salaried worker making less than the new threshold would be eligible to receive overtime pay (1.5 times their regular hourly rate) for any hours worked beyond the standard 40-hour workweek. This update aimed to provide fair compensation for employees who put in extra time and effort. 3. Child labor protections:In April 2004, the Department of Labor fined Wal-Mart $135,540 for violating child labor laws under the FLSA. The company allowed young workers to engage in activities prohibited by the act, such as operating dangerous machinery like forklifts or working beyond the allowable hours for minors. This enforcement action demonstrates the FLSA’s role in protecting young workers’ safety and well-being in the workplace.

Frequently Asked Questions(FAQ)

What is the Fair Labor Standards Act (FLSA)?
The Fair Labor Standards Act (FLSA) is a United States federal labor law that establishes minimum wage, overtime pay, recordkeeping, and child labor standards for both full-time and part-time workers in the private sector and in federal, state, and local governments.
When was the FLSA enacted?
The Fair Labor Standards Act was enacted on June 25, 1938, by President Franklin D. Roosevelt, as part of the New Deal.
What is the current national minimum wage under FLSA?
As of July 24, 2009, the federal minimum wage is $7.25 per hour. However, many states have their own higher minimum wage rates, which take precedence over the federal rate.
What are the overtime pay regulations under the FLSA?
Under the FLSA, employees who work over 40 hours per week are entitled to overtime pay at a rate of one and a half times their regular rate of pay.
Are all employees covered by FLSA standards?
No, some types of workers are exempt from the FLSA standards. Exemptions generally apply to executive, administrative, professional, and outside sales employees, as well as certain highly compensated employees if they meet specific criteria.
How does the FLSA regulate child labor?
The FLSA sets age restrictions and working hours limits for young workers. Generally, the minimum age requirement for non-agricultural employment is 14, and for hazardous occupations, it is 18. Workers under 16 are also subjected to restrictions on their working hours during the school year.
How does the FLSA apply to tipped employees?
Under the FLSA, employers are allowed to pay tipped employees a minimum cash wage of $2.13 per hour, as long as the employees’ tips combined with the cash wage meet or exceed the federal minimum wage. If the employee’s tips and cash wage do not reach the federal minimum wage, the employer must make up the difference.
How can an employee file a complaint if they believe their employer is violating the FLSA?
Employees can file a complaint with the Wage and Hour Division of the United States Department of Labor, which enforces FLSA regulations. Employees have the right to file a complaint without facing retaliation from their employer.
Are salaried employees protected by the FLSA?
Salaried employees may still be covered by the FLSA, depending on their job duties and salary level. It is important to examine each specific case to determine if FLSA protections apply.
Can states have their own labor laws in addition to the FLSA?
Yes, states are permitted to enact their own labor laws, including minimum wage and overtime regulations. If the state laws are more protective of employees, those provisions take precedence over the FLSA.

Related Finance Terms

  • Minimum Wage
  • Overtime Pay
  • Child Labor Regulations
  • Recordkeeping Requirements
  • Exempt Employees

Sources for More Information


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