Historically, laws on labour have been put in place in order to address social problems brought on about by the present day production arrangements. In 1938, the Fair Labor Standards Act, which is also known as the Wages and Hours Act was enacted by Congress. The Act is applicable to federal workers or workers involved in commercial production of goods. It does not cover independent contractors. This Act has been said to be indispensable especially with regards to the welfare of the American workforce.
The Act establishes a federal minimum wage and set maximum hours for employment, so as to establish the bare minimum living standards for federal workers. The Act also prohibits child labour and also establishes a Wage and Hour Division in the labour sector. The Act did not initially cover certain classes of workers including: farming and regular laborers; those who handled perishable food and certain workers in industries where engaging in collective bargaining was allowed (Fair Labor Standards Act, 1938).
Having mentioned the salient features of the Act, we will delve into the major provisions of the Act and their impact on the labor industry. The Act creates two types of employees whose employment is governed by the Act; these are the exempt and non-exempt employees. Exempt employees are not paid overtime while non-exempt employees who are the majority covered by the Act are paid overtime.
The other differentiating characteristic is that employees who work in outside sales are exempt while those in inside sales are non-exempt. The other feature of an exempt employee is that he or she earns a minimum of 23,600 dollars per year. An exempt employee also has to be paid a salary and carry out exempt job responsibilities which are essentially high level duties. Exempt and non-exempt employees also have varying rights.
The Fair Labor Standards Act has been amended severally, with some changes reflecting in overtime determination, wages, and the classes of workers governed by the Act. One of the major changes was in 2004 which sought to reflect transformation more so information technology and also ways of establishing new standards for testing whether someone is eligible for overtime.
More recently there have been proposed changes to the Act. There have been recent proposals by Congress to make further amendments to the Act. It has been suggested that some of the provisions of the 73 year old piece of legislation are archaic and need to be conformed to modern standards.
This has especially been pointed out with regards the wage-hour rule (Stone, 2005). It is evident that the world has changed a great deal since 1938 and so there is need to streamline some of the provisions of the Fair Labour Standards Act with today’s world. The only setback is that there are many issues that the government is concerned with presently such as the looming economic crisis and the raising of the debt ceiling; which is taking a lot of government attention.
Some critics have even argued that since lawmakers are pre-occupied there is a chance of fashioning the Act to fit the 1938 model as opposed to a new and improved legislation. The proposed changes will mostly be of benefit to the workers in the technology world. It is however very prudent to consider the fact that labour still forms an important part of any economy and it is necessary to update the FLSA.
The Fair Labour Standards Act has for thirty eight years been a pillar of the labour industry in America and it is of significance that it is altered to fit the modern world. The major part that should however remain is the protection of the welfare of the workers.
Fair Labor Standards Act. (1938). 29 U.S.C. 201 – 219.
Stone K.V.W. (2005). Rethinking Labor Law: Employment Protection for Boundaryless Workers. Retrieved from http://ssrn.com