Fair Labor Standards Act Term Paper

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Human Resources: Fair Labor Standards Act

An Examination of the Fair Labor Standards Act of 1938 and Its Implications for American Workers Today

Although most Americans take for granted the wide range of social programs that are in place for their protection, many of these initiatives are fairly recent in origin, but one that has been around for quite some time is the Fair Labor Standards Act of 1938. The legislation established a minimum standard wage and a maximum work week of 40 hours in industries that were engaged in interstate commerce. The implications of the Act were profound, and today, in what has become a classic pattern over the years, calls for increases to the federal minimum wage are followed by impassioned cries from industry leaders that such an initiative will do more to harm business than it will to help minimum-wage workers. Rather than routinely bankrupt America's businesses, though, the federal minimum wage has served as a vehicle with which the nation can help ensure that all workers receive a living wage, but critics have consistently pointed out that the federal minimum wage has been and remains too low for this purpose (Hart, 1994). To determine how effective the Fair Labor Standards Act has been in accomplishing its original purposes and what implications this legislation had on American workers and industries, this paper will provide an overview of the Act, followed by an assessment of the impact of the legislation. Finally, an analysis of current and future trends is followed by a summary of the research in the conclusion.

Review and Discussion

Background and Overview. According to the U.S. Office of Personnel Management (OPM), the Fair Labor Standards Act of 1938, as amended, is published in law in sections 201-219 of title 29, United States Code. The Act establishes minimum standards for both wages and overtime entitlement and codifies the administrative procedures and standards whereby covered worktime must be compensated for American workers today (An Overview of the Fair Labor Standards Act, 2005). According to the OPM, "Included in the Act are provisions related to child labor, equal pay, and portal-to-portal activities. In addition, the Act exempts specified employees or groups of employees from the application of certain of its provisions" (An Overview of the Fair Labor Standards Act, 2005, p. 2). OPM's current FLSA regulations are published in part 551 of title 5, Code of Federal Regulations; changes to the Code of Federal Regulations are published in the Federal Register. According to Marcus, Minifie, Natarajan, and Wilson (1997), the FLSA was enacted in 1938 to help eliminate conditions that were detrimental to the nation's commerce and the general welfare of workers; it was reasoned that by vesting the Secretary of Labor with broad investigative and enforcement powers, it would be possible to both prevent employee subrogation and to improve labor relations and the flow of commerce in the process (Marcus et al., 1997).

Broadly speaking, the FLSA prohibits an employer from:

Failing to pay minimum wage or overtime compensation to an employee;

Failing to keep individual work records for each employee;

Discriminating on the basis of sex by paying different wages for equal work;

Using oppressive child labor;

The FLSA makes it illegal for an employer to discharge or to discriminate against an employee due to the employee's filing of a FLSA complaint or institution of a FLSA proceeding;

The FLSA prohibits the transport and sale of products manufactured by employees subjected to certain unlawful practices; and The FLSA includes a "hot goods" ban that makes it an offense to purchase goods from an establishment where a FLSA violation has occurred, unless the purchase was made in good faith and without knowledge of the business's violations or unless the purchaser is the ultimate consumer (Marcus et al., 1997).

Furthermore, a cause of action brought under the protections provided by the FLSA preempt all other criminal statutes; as a result, the prosecution of employers for violations covered by the FLSA may proceed only under the FLSA provisions, and only penalties provided in the statute may be sought; however, Marcus and her colleagues add that state wage statutes are enforceable if they are not in conflict with the applicable FLSA provisions. In addition, the FLSA stipulates that its minimum wage provisions represent the floor rather than the ceiling, and its provisions do not in any way excuse an employer who violates a state or federal law which may set a higher minimum wage or a shorter work week (Marcus et al., 1997).

While most American workers take their present 5-day, 40-hour schedule of weekly hours for granted, this regimen was first introduced in the United States during the 1920s. The concept of a 40-hour week received support in 1926 when Henry Ford decided to convert his automobile plants from a 6-day to 5-day week. The 8-hour day, which Ford employees received a decade earlier along with the $5/day minimum wage, remained in effect; such progressive thinking was doomed to be short-lived though. In response to the worst depression in U.S. history and the demands of social movements that government provide substantive help, policymakers in the New Deal era looked to assist the type of American citizen President Franklin Roosevelt had called the "forgotten man at the bottom of the economic pyramid"; this assistance was to be provided in the form of regulatory labor policies and redistributive social policies that would previously have been forbidden within institutions of the national government (Mettler, 1998). Perhaps no other period in American history would even have resulted in such a set of progressive -- and in many cases largely unconstitutional -- federal initiatives that were targeted at the nation's most marginalized citizens.

The Fair Labor Standards Act of 1938 (hereinafter, FLSA or the "Act") was enacted by Congress in 1938 as a response to the enormity of the economic conditions that existed in the midst of the Great Depression. The purpose of the FLSA was to help protect workers from substandard wages and oppressive working hours and conditions that were detrimental to the "health, efficiency, and general well-being of workers"; in this regard, the FLSA was "designed to give specific minimum protection to individual workers and to ensure that each employee covered by the Act would receive [a] fair day's pay for a fair day's work and would be protected from the evil of 'overwork' as well as 'underpay'" (Walter, 2002, p. 79). The Act was targeted at protecting the most vulnerable workers such as children and low-paid "sweatshop" employees; however, the Act did not apply to public agencies and the FLSA regulations initially issued by the United States Department of Labor ("DOL") did not envision the Act being applied to public agencies (Walter, 2002).

For the purposes of enforcement, the FLSA defines an employer as being "any person acting directly or indirectly in the interest of an employer in relation to an employee . . . ." (29 U.S.C. Sections 203(d). In United States v. Rosenwasser (323 U.S. 360, 363), the Supreme Court further defined "employer" for purposes of FLSA jurisdiction as being the "broadest . . . that has ever been included in any one act" (1945, n. 3). Therefore, for the purposes of FLSA enforcement, an employer can be considered any "individual, partnership, association, corporation, business trust, legal representative, or any organized group of persons" (Marcus et al., 1997, p. 459). Further, besides a corporation itself, a corporate officer with operational control is also considered an employer and can be held jointly and severally liable under the FLSA for unpaid wages; these corporate officers are liable in their individual rather than their representative capacities though (Marcus et al., 1997).

The FLSA provisions also apply to both individual employers and to employers that represent any type of "enterprise" (Marcus et al.,. 1997). Here, the commerce clause becomes relevant for enforcement of the provisions of the FLSA when the employers are involved in interstate commerce; of course, Congress has sought to expand the interstate commerce concept to include virtually anything that involves a business transaction and therefore the provisions of the FLSA are applicable to individual employers in those "industries engaged in commerce or in the production of goods for commerce" (Marcus et al., 1997). Liability applies to individual business entities if they constitute an "enterprise" when related activities are performed through a unified operation or where there exists common control for a common business purpose; the authors report that a significant amount of litigation has been devoted to determining which businesses constitute enterprises within the meaning of the Act (Marcus et al., 1997).

As discussed further below, the definition of employer for the purposes of FLSA enforcement also encompasses public agencies but labor organizations are not included, except when acting in their capacity as an employer, or any person acting as an officer or agent of a labor organization (Marcus et al., 1997). Like the situation with monopolies and professional baseball leagues in the United States, the situation with the labor…[continue]

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