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The Fair Labor Standards Act (FLSA)

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Introduction The Fair Labor Standards Act (FLSA) was passed by Congress on June 25th, 1938. The main objective of the act was to eliminate "labor conditions detrimental to the maintenance of the minimum standards of living necessary for health, efficiency and well-being of workers,"1 who engaged directly or indirectly in interstate commerce, including those involved in production of goods bound for such commerce. A major provision of the act established a maximum work week and minimum wage. Initially, the minimum wage was $0.25 per hour, along with a maximum workweek of 44 hours for the first year, 42 for the second year and 40 thereafter. Minimum wages of $0.25 per hour were established for the first year, $0.30 for the second year, and $0.40 over a period of the next six years. Other provisions set standards for overtime compensation and banned products of child labor from interstate commerce. A Wage and Hour Division (WHD) was also created by the Department of Labor. The purpose of this division was to accelerate the raising standards within an industry if, a committee recommended change. The Fair Labor Standards Act has been amended repeatedly in subsequent decades, with changes expanding the classes of workers covered, raising the minimum wage, redefining regular-time work, raising overtime payments to encourage the hiring of new workers, and equalizing pay scales for men and women. FLSA Regulations and Non-Regulations While the FLSA does set basic minimum wage, overtime pay standards, and regulates the employment of minors, there are a number of employment practices which FLSA does not regulate. ...read more.


To qualify for exemption, employees generally must meet certain tests regarding their job duties and be paid on a salary basis at not less that $455 per week. Job titles do not determine exempt status. In order for an exemption to apply, an employee's specific job duties and salary must meet all the requirement of the Department's regulations. Determining Exempt Status Each position must be evaluated using three steps: Step 1: Salary Test Does the position pay more than $455 per week? If so, the position must still pass the requirements of Step 2 and 3 (listed below). Step 2: Salary Basis Test Being paid on a "salary basis" means an employee regularly receives a predetermined amount of compensation each pay period basis. Step 3: Duties Test The position must meet the parameters of an allowed exemption category. A. Executive Exemption 1. Must be compensated on a salary basis of not less that $455 per week. 2. Primary duties must be managing the enterprise, department, and/or, subdivision. 3. Position must direct the work of at least two or more full-time employees or their equivalents. 4. Position must have the authority to hire or fire other employees, or the employee's suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees. B. Administrative Exemption 1. Must be compensated on a salary basis of not less that $455 per week. 2. Primary duties must be the performance of office or non-manual work directly related to the management of general business operations of the employer. ...read more.


1. Classification Conundrum: Avoiding Potentially Costly Exempt Vs. Non-Exempt Errors, Nonprofit Risk Management Center, by Melanie L. Herman, pages 1-5, 5/20/04, copyright 2003. 2. FLSA Overtime Rules Get Revamped, Tools to Manage and Motivate People, by G. Neil, pages 1-2, 5/11/04, www.gneil.com 3. Frequently Asked Question About the FLSA, www.flsa.com, 7/1/04, pages 1-6. 4. Modernizing the FLSA for the 21st Century, by D. Mark Wilson, The Heritage Foundation Backgrounder, July 12, 2001, pages 1-12 5. New Overtime Regs Still Speeding Toward Deadline, by M. Lee Smith, www.mleesmith.com, 5/11/04, pages 1-3 6. DOL: Be prepared to comply with new white-collar rules, by Margaret Clark, Society for Human Resource Management, 5/5/04, pages 1-2 7. Senate approves amendment to block overtime rules change, by Bill Leonard, Society for Human Resource Management, www.shrm.org, 5/11/01, pg. 1 8. U.S Department of Labor WHD: FairPay Fact Sheet by Exemption, www.dol.gov/esa, 5/27/04 9. Fair Labor Standards Act, www.infoplease.com, 6/11/04 10. Senate passes important tax bill with overtime amendments attached by Bill Leonard, Society for Human Resources Management, www.shrm.org, 5/19/04. 11. DOL issues proposal for changing overtime exemption requirements, by Staff reports, Society for Human Resource Management, www.shrm.org, 6/11/04 12. What does the Fair Labor Standards Act not Require?, by elaws, www.dol.gov/elaws, 6/11/04 13. Handy Reference Guide to the Fair Labor Standards Act, by US Department of Labor, revised 10/96, www.dol.gov/esa/public/whd_org.htm, pages 1-10. 14. Fair Labor Standards Act, www.spartacus.schoolnet.co.uk, 6/11/04 1 Fair Labor Standards Act; www.inforplease.com, June 11, 2004. ?? ?? ?? ?? 2 ...read more.

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