Introduction
The USA has several labor laws that protect the interests and safety of employees in different sectors. In order to protect workers in various industries, Fair Labor Standard Act (FLSA) was primarily formulated to set a minimum wage and to abolish oppressive child labor. FLSA mainly deals with overtime and it defines two types of workers that include exempt and non-exempt. There are some jobs that are not governed by FLSA such as executives, supervisory, and outside sales. Hence, employees whose jobs are governed by the law fall under exempt or non-exempt categories where the latter are entitled to overtime pay where the former are not. The paper focuses on FLSA with regard to exempt and non-exempt employees.
Summary of the Law
FLSA is a law that was created by US federal government to provide employees with minimum wage, overtime pay, and protection of child labor (Samuel, 2000). The law does not cover some of the employees, especially those employed by small businesses, but it covers the majority of workers in the US. Non-exempt are employees who are covered by FLSA and they are entitled to a federal minimum wage and overtime pay of not less than 150% of their normal hourly rate. On the other hand, exempt employees are entitled to minimum wage, but they do not receive overtime pay no matter how many hours they work in a week.
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Employers are obligated by the law to pay non-exempt personnel at least $7.25 every hour, which was effective since 24 th July 2009. Before raising the minimum wage to $7.25, employers were expected to pay workers a minimum wage $5.15 an hour. In addition, the law also has a category of sub-minimum wage rate for tipped employees (Samuel, 2000). According to FLSA, tipped workers can be paid less than the basic minimum wage, but the sum of their cash wage and tips should be equal to at least the basic minimum wage of $7.25. The law also sets the minimum wage for youth, as it permits employers to pay not less than $4.25 an hour for workers who are below 20 years. However, the law does not allow employers to displace other employees with workers below 20 years with the intention of benefiting from the low minimum wage.
In terms of overtime, the law requires firms to pay non-exempt workers who work over 40 hours a week at least 150% of their normal hourly wage for any overtime. At the same time, the law allows nonexempt workers in the public sector to receive compensatory time off for every extra one hour work done after 40 hours in a week. Some of the employees are not eligible under FLSA. Employees in computer-related professions are exempted and they cannot benefit from minimum wage and overtime standards that are contained in FLSA (Harris, 2000). Domestic service workers who offer companionship services to private households also do not benefit from minimum wage and overtime requirements. However, there is a proposal from the US Department of labor to extend overtime pay to live-in domestic workers. Other professions that are exempted from minimum wage and overtime pay include executives, administrators, and professional workers such as teachers.
Some of the most important FLSA rules include:
Employees who earn less than $455 per week are non-exempt
An exempt employee has virtually no right under FLSA overtime rule
An employee who meets the salary level test and salary basis test is categorized under exempt only of he or she does exempt job duties
The executive job duties are exempt if an employee regularly supervises more than one worker, has management as the main duty and has genuine input into the job status.
Therefore, there is a big difference between exempt and non-exempt employees under FLSA. Generally, non-exempt workers receive more protection under FLSA law than exempt employees. The compensations of exempt workers do not change regardless of the time they spend at work while non-exempt employees are paid for working extra hours. In addition, exempt workers do not benefit from minimum wage while non-exempt employees are entitled to at least minimum wage.
Comparison with Other Statutes
Laws and regulations on wages and hours of labor are not new in the US. By the time FLSA was formulated in 1938, almost 25 states in the US had developed minimum wage regulations to protect employees from exploitation. At the same time, about 43 states had formulated minimum hour laws for certain professionals (Harris, 2000). The US Congress had also formulated maximum hours and minimum wages for some of the classes of employees. Therefore, there are a number of labor laws that have almost similar objectives as FLSA
However, FLSA differs from previously formulated labor laws in several aspects. Unlike most state laws that provide flexible wage provision, FLSA sets up absolute minimum wage hat must be strictly followed by employers. Many minimum hours laws formulated by states directly limits hours of work. Nevertheless, FLSA has no direct limits of hours of work but it only penalizes overtime work because it requires employers to pay employees on extra time worked. In addition, many state labor laws in the US are based on the principle of protection of health and morals such as need to pay workers appropriately and protect them against exploitation while the formulation of FLSA was guided by the perception that it could help in enhancing the purchasing power and reduce unemployment in the country (Harris, 2000). Therefore, the formulation of state laws and FLSA are based on different principles.
FLSA is also different from other federal and state laws based on their coverage. For instance, Hawaii wage and hour law cover all employees of local employers, but not workers subjected to federal laws. In the contrary, FLSA covers all employees of a given enterprise regardless of whether they are employed by state or federal government. FLSA also differ with other state labor laws in terms of exemptions, as workers who may not be eligible under FLSA may be eligible under local or state laws (Harris, 2000). Therefore, FLSA is a federal law that applies to all states equally, which may not be the case under state labor laws.
Nevertheless, despite many differences, there are also similarities between FLSA and other federal and state labor laws. FLSA is similar to other state minimum laws in that they are all aimed at protecting workers from exploitations. FLSA is similar to other statutes because it also ensures that employees get minimum wages and they are compensated for overtime. Like many minimum and hour laws formulated by states, FLSA also ensures that children and underage workers are not exploited by employers. Therefore, there are similarities and differences between FLSA and other laws and statutes aimed at protecting workers.
Impact of FLAS on the Workforce
Workers in both private and public sectors have the right to work based on fair labor standards. The FLSA has created a significant impact on the workforce found in various sectors of US’s economy. It has mainly regulated various aspects of labor issues such minimum wage and overtime. At the same time, the law has created some negative impacts in the workforce because it has led to discrimination of certain segment of employees. Therefore, there are both negative and positive impacts associated with FLSA (Samuel, 2000).
However, there are some negative impacts of FLSA. The implementation of FLSA has led to increased cost of labor in the workplace because of the need to adhere to minimum wage and to overtime pay. Hence, in order to reduce the cost of labor, some employers opt for exempt employees who are not entitled to the benefits of FLSA and make them work longer hours. As a result, FLSA can be associated with some level of unemployment, particularly among the non-exempt workers. It has also led to discrimination in the workplace, as some employee may worker extra hours than their non-exempt counterparts yet they do not receive compensation for overtime hours because they are not eligible to FLSA (Samuel, 2000). For instance, to increase productivity and reduce the cost of labor, some employers force exempt employees to work extra time without pay while the non-exempt workers only work within the normal time. Evidence from household time use diaries revealed that exempt workers work longer hours, as they are used by employers to enhance output (Eldridge, Manser & Otto, 2004).
Conclusion
FLSA has ensured that non-exempted employees receive minimum wage and are compensated for their overtime work. Consequently, many workers who are covered by the law get proper remuneration. But the law is unfavorable to exempt workers who are not entitled to benefits such as minimum wage and overtime pay. Therefore, the law should be modified to ensure that it covers as many employees as possible to reduce the level of discrimination between exempt and non-exempt employees in workplaces.
References
Eldridge, L. P., Manser, M. E., & Otto, P. F. (2004). Alternative measures of supervisory employee hours and productivity growth. Monthly Lab. Rev. , 127 , 1-20.
Harris, S. D. (2000). Conceptions of Fairness and the Fair Labor Standards Act. Hofstra Lab. & Emp. LJ , 18 , 19.
Samuel, H. D. (2000). Troubled passage: the labor movement and the Fair Labor Standards Act. Monthly Lab. Rev. , 123 , 32-38.
