For most of us, work is one of the most important parts of our lives. It allows us to provide for ourselves and our loved ones, and it plays a pivotal role in our sense of value and self-esteem. Unfortunately, work is often a source of conflict as well, as workers strive to improve their lot while business owners seek to maximize profits by spending less on wages, work conditions, and benefits. As a consequence, employment generates a wide range of legal disputes.
The Fair Labor Standards Act of 1938 established a number of laws governing worker pay, including requirements for a minimum wage, as well as regulations on payment of overtime. When initially enacted, the minimum wage under federal law was $0.25 per hour—it now stands at $7.25 per hour, although certain federal employees had their minimum wage increased to $15 per hour in response to the COVID pandemic. Under current law, any employee covered by the Fair Labor Standards Act is entitled to overtime pay (at a rate of 1 ½ times normal hourly pay) for any time worked in excess of 40 hours per week. Under the FLSA, weekend or holiday work is treated as overtime only when it causes the worker to exceed 40 hours for the week or if required by a collective bargaining agreement or contract between the employee and employer.
Most states have their own wage and hour laws as well—there are currently only five (Alabama, Louisiana, Mississippi, South Carolina, and Tennessee) that do not have separate minimum wage standards. Many cities also have their own minimum wage laws. In many California cities, the minimum wage is over $15 per hour. Workers are entitled to the highest minimum wage set by local, state, or federal law.
The FLSA protects workers at companies engaged in interstate commerce (or in the production of goods that travel through interstate commerce). It also applies to companies with an annual gross volume of sales or business of $500,000 or more, and businesses involved with or engaged in the activities of a public agency.
Only nonexempt employees are entitled to receive the minimum wage, not independent contractors. For details on the definition of a “nonexempt employee,” see this related page.
Though the most blatant form of violation of minimum wage laws involves the refusal or failure to pay an hourly rate at or above the required minimum, there are other ways that employers can violate minimum wage or overtime laws:
A worker may not agree to work for less than the minimum hourly wage. Any employer who forces a worker to do so is in violation of the Fair Labor Standards Act.
The U.S. Department of Labor Wage and Hour Division (WHD)has regulatory and enforcement authority under the FLSA. To initiate a complaint, a worker must notify the Department of Labor, which may then conduct an investigation. As part of an investigation, WHD may compel witnesses to attend hearings and require employers to produce records. WHD can impose sanctions on an employer or file a civil lawsuit or even criminal charges against an employer that violates wage and hour laws.
A number of federal laws provide some level of protection for employee pension and retirement plans:
ERISA imposes fiduciary responsibility on anyone controlling or managing plan assets and also grants plan participants the right to take legal action for breach of fiduciary duty.
The National Labor Relations Act of 1935, also known as the Wagner Act, expressly grants workers the right to belong to and/or participate in trade unions and engage in collective bargaining as a union on behalf of all workers at a company. Under the Wagner Act, employees of qualified companies have a right to choose a labor organization to represent them in any collective bargaining, and an employer may not interfere with or engage in any activities that limit this right. Once a labor organization is selected to represent the workers, the employer must bargain only with representatives of the union.
For additional information regarding federal labor law, see this related page.
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