Fair Labor Standards Act - What's Important to Know

Article Summary

  1. The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record keeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.1 The Fair Labor Standards Act mandates that covered nonexempt workers are entitled to a minimum wage of not less than $7.25 an hour.
  2. Repeat offenders may be subject to criminal penalties.2 The minimum wage in Florida is $8.05 per hour, with a minimum wage of at least $5.03 per hour for tipped employees, in addition to tips.
  3. Employees have rights protected by the State Constitution including An employee who has not received the lawful minimum wage after notifying his or her employer and giving the employer 15 days to resolve any claims for unpaid wages may bring a civil action in a court of law against an employer to recover back wages plus damages and attorney’s fees.
  4. The Attorney General or other official designated by the Legislature may bring a civil action to enforce the minimum wage.3 In response to rising living cost and wage stagnation, communities have responded by passing local living wage laws which require private businesses benefitting from public money to pay a livable wage to their workforce.4 The living wage is based on the amount an individual needs to earn to cover the basic costs of living; it is a complete consideration of the cost of living.
  5. The factors included in calculating the basic cost of a safe and decent standard of living: MIT calculates that a living wage in Florida is $10.12 per hour for one adult, which is $2.07 per hour above the minimum wage of $8.05 per hour.

The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, record keeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments.1 The Fair Labor Standards Act mandates that covered nonexempt workers are entitled to a minimum wage of not less than $7.25 an hour. Overtime pay at a rate of not less than one-half times their regular pay is required after 40 hours of work in a workweek.

Classifying Employees:

It is important to cautiously classify whether a worker is an employee and whether that employee is exempt or non-exempt.

Incorrectly classifying a worker as an independent contractor when she’s really an employee may lead to liability for failure to pay her for hours worked.

Incorrectly classifying a non-exempt worker as exempt employee under the FLSA creates the risk of failure to pay overtime when she works more than 40 hours in a workweek.

The Fair Labor Standards Act contains exemptions from the basic standards; some which apply to specific types of businesses and others apply to specific kinds of work.

The Fair Labor Standards Act does not regulate a number of employment practices such as:

  • Vacation, holiday, severance, or sick pay
  • Meal or rest periods, holidays off, or vacations
  • Meal or rest periods, holidays off, or vacations
  • Premium pay for weekend or holiday work
  • Pay raises or fringe benefits; and
  • A discharge notice, reason for discharge, or immediate payment of final wages or terminated employees.

Who is covered?

  1. All employees of certain enterprises having workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling or otherwise working on goods or materials that have been moved in or produced for such commerce by any person.
  2. A covered enterprise is the related activities performed through unified operation or common control by any person or persons for a common business purpose and:
    • Whose annual gross volume of sales made or business done is not less than $500k; or
    • Is engaged in the operation of a hospital, an institution primarily engaged in the care of the sick, the ages, or the mentally ill who reside on the premises; a school for mentally or physically disabled or gifted children; a preschool, an elementary or secondary school, or an institution of higher education (whether operated for profit or not for profit); or
    • Is the activity of a public agency.
  3. Construction and laundry/dry cleaning enterprises
  4. Employees of firm which are not covered enterprises under Fair Labor Standards Act still may be subject to its minimum wage, overtime pay, and child labor provisions if they are individually engaged in interstate commerce or in the production of goods for interstate commerce, or in any closely-related process of occupation directly essential to such production.
  5. Domestic workers, such as housekeepers, chauffeurs, cooks, full-time babysitters, if:
    • Their cash wages from one employer are at least $1k in a calendar year; or
    • They work a total of more than 8 hours a week for one or more employers

Enforcement

The U.S. Department of Labor (DOL) enforces the Fair Labor Standards Act

Either an employee or the DOL can recover money that should have been paid to him — going back two years from the date of the lawsuit or three years for willful violations.

Can recover an equal amount in liquidated damages unless the employer can establish substantial justification for failure to comply with the law.

Any employee who makes a complaint to the DOL, assists in such a complaint, or attempts to enforce his rights is protected from retaliation and may seek damages for emotional distress, as well as punitive damages, if retaliation is shown. Repeat offenders may be subject to criminal penalties.2

Minimum Wage

The minimum wage in Florida is $8.05 per hour, with a minimum wage of at least $5.03 per hour for tipped employees, in addition to tips. The minimum wage is recalculated yearly on September 30 based on the Consumer Price Index.

The federal minimum wage is $7.25 an hour.

Employees have rights protected by the State Constitution including:

  • File a complaint about an employer’s alleged noncompliance with lawful minimum wage requirements.
  • Inform any person about an employer’s alleged noncompliance with lawful minimum wage requirements.
  • Inform any person of his or her potential rights under Section 24, Article X of the State Constitution and to assist him or her in asserting such rights.

An employee who has not received the lawful minimum wage after notifying his or her employer and giving the employer 15 days to resolve any claims for unpaid wages may bring a civil action in a court of law against an employer to recover back wages plus damages and attorney’s fees.

An employer found liable for intentionally violating minimum wage requirements is subject to a fine of $1,000 per violation, payable to the state. The Attorney General or other official designated by the Legislature may bring a civil action to enforce the minimum wage.3

Living Wage

In response to rising living cost and wage stagnation, communities have responded by passing local living wage laws which require private businesses benefitting from public money to pay a livable wage to their workforce.4

The living wage is based on the amount an individual needs to earn to cover the basic costs of living; it is a complete consideration of the cost of living.

The factors included in calculating the basic cost of a safe and decent standard of living:

  • Housing
  • Food
  • Childcare
  • Transportation
  • Healthcare
  • Taxes
  • Other Basic Necessities5

MIT calculates that a living wage in Florida is $10.12 per hour for one adult, which is $2.07 per hour above the minimum wage of $8.05 per hour. The tool calculates a living wage of $19.21 per hour for two adults and one child. (January 1, 2015)

Taking Action:

St. Petersburg- based C1 raised its “living wage” to $14 in April 2014.

Ikea and Gap, who own Old Navy, Banana republic, Athleta, Piperlime and Intermix, have voluntarily increased their minimum wages ahead of the proposes national legislation.

Quiktrip, Trader Joe’s and Costco Wholesale raised the living wage.

Why?

These companies value the workers find that underinvestment in workers can result in operational problems in stores which decrease the sales. They see the employees as assets to be maximized.

The benefit is that these stores have a better operational efficiency and customer service and these results in better sales.6

References

  1. FLSA Reference Guide
  2. Fair Labor Standards Act(FLSA), Hero: Your Employment Law Resource (2015) (http://topics.hrhero.com/fair-labor-standards-act-flsa/#)
  3. See e.g. Section 24, Article X of the State Constitution and Section 448.110, Florida Statutes
  4. Living Wage Overview, http://www.floridalegal.org/cjp/index.php/updates/living-wage
  5. See the Living Wage Action Coalition
  6. Quiton, Sophie, The Trader Joe's Lesson: How to Pay a Living Wage and Still Make Money in Retail, March 25, 2013, The Atlantic Business Journal.

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