The Fair Labor Standards Act (FLSA) was first enacted in 1938 (dol.gov) by President Franklin D. Roosevelt. It was initially created to establish a structure to the social and economic systems in America. The Act has taken on different forms since its inception but the common denominator has been to protect the best interests of citizens in relation to employment and child labor.
FLSA has been instrumental in shaping the wage and employment system as a measure for businesses and corporations to follow. When it was first devised in 1938, the minimum wage was 25 cents and no one could work more than 44 hours per week (dol.gov). This resulted in a decrease of 5% in the number of hours employees could work weekly. Additionally, the South was the most impacted by the FLSA, causing a reduction in the number of hours that could be worked by 43% (Costa, 2000). Child labor was also banned as part of the Act. The FLSA was devised with two goals in mind, to decrease the amount of hours worked to preserve the health, and well-being of workers and also to increase jobs by essentially minimizing overtime so more people could be put to work (Costa, 2000).
The FLSA was just the beginning of decades of obstacles and challenges that it presented. Almost immediately upon its issuance, President Roosevelt drafted the National Industrial Recovery Act (NRA) that curbed anti-trust laws and worked to raise wages and create more jobs. The Supreme Court stepped in to overrule on the NRA in 1935 (dol.gov) when it disarmed it claiming unconstitutionality on the premise of it solely appealing to private interests. Through a series of federal court cases, the Supreme Court ruled many of the State and Federal labor laws were unconstitutional as well.
The FLSA works in today’s society to regulate wages, overtime pay, child labor laws, and recordkeeping at the Federal, state, and local levels (dol.gov). Any full-time employee that is eligible for overtime pay is protected under the FLSA (hr.ofm.wa.gov). As an addendum to the FLSA, the Fairpay Overtime Initiative (FOI) was enacted in 2004, giving employers more authority in how overtime pay would be regulated (Honorée & Wyld, 2006). This initiative made a huge difference in how some employees would benefit. For example, sales reps typically have not be eligible for overtime pay because their income is predominately commission-based. This gave employers the ability to determine how to classify outside sales reps in regards to overtime pay in order to meet the needs of this growing niche of employees in the workforce.
As a whole, the FLSA has been largely successful in regulating wages and overtime pay according to its guidelines. However, many would argue that the minimum wage is well below what it should be for the current economy and does not meet the minimum poverty level in the United States. In this regard, more could be done to increase the minimum wage. Workers across the nation are currently rallying for $15/hour in order to try and make ends meet. Companies claim this would put many of them out of business. This is but one example of the failings of sorts of the FLSA and how it has done less to serve workers and more to benefit corporations and big business. The other aspect that cannot be ignored is that the FLSA’s initial claims for implementation was to create jobs and increase wages. Neither have been successfully mandated. Within the United States, the unemployment rate is at an all-time high and wages are still considered too low to keep up with the demands of inflation and a broken economy. This has left many workers holding the short end of the stick on this issue. There may never be real resolve on the current issues surrounding FLSA, but having some guidelines and regulations in place is better than employers being left to their own devices.
- Costa, D. L. (2000). Hours of work and the fair labor standards act: A study of retail and wholesale trade, 1938-1950. Industrial & Labor Relations Review, 53(4), 648-664.
- Fair Labor Standards Act (FLSA). (n.d.). Retrieved July 18, 2016, from http://hr.ofm.wa.gov/compensation-job-classes/compensation-administration/fair-labor-standards-act-flsa
- Honorée, A.,L., & Wyld, D. C. (2006). The new fair labor standards act regulations and the sales force: Who is entitled to overtime pay? Compensation and Benefits Review, 38(1), 29-36,4.
- U.S. Department of Labor — History — Fair Labor Standards Act of 1938: (n.d.). Retrieved July 18, 2016, from https://www.dol.gov/oasam/programs/history/flsa1938.htm
