Minimum wage – facts about the Fair Labor Standards Act…

Minimum wage.  Here are some facts to help you make a better informed decision regarding whether you are for, against, or want to see a major increase in the minimum wage.  

1. Not all employers are required to pay minimum wage.  Only those who meet these requirements:

  • The Act applies to enterprises with employees who engage in interstate commerce, produce goods for interstate commerce, or handle, sell, or work on goods or materials that have been moved in or produced for interstate commerce. For most firms, a test of not less than $500,000 in annual dollar volume of business applies (i.e., the Act does not cover enterprises with less than this amount of business). (source is from the U.S. Department of Labor)

So the big thing to take away from the above paragraph is that a business has to have $500,000 in annual sales.  I do see this as a step in the right direction, it would be better if the amount was tied to Net Sales after business expenditures (excluding payroll) or something along those lines.  While $500,000 in sales sounds like a lot, it may not be depending on the business (landscaping companies that have high overhead due to equipment, office, materials costs verses an insurance sales representative who works from their house for example).  

2. States can inact minimum wage laws of their own but an employee who is covered under the Federal Labor Standards Act is required to be paid the higher of the two amounts.  Again, this only applies to employees who meet the FLSA requirements to be covered by the minimum wage law.  For state specific laws currently in place go HERE.  There is some interesting information at the bottom of this page as well.  

3. Youth workers (those under 20) can be paid a federal minimum wage of $4.25 during their first 90 days of employment.

  • The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of not less than $4.25 an
    hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial
    employment. The law contains certain protections for employees that prohibit employers from displacing any
    employee in order to hire someone at the youth minimum wage. (See the fact sheet on youth workers here)

4. There are lots of definitions for what constitutes ‘work’ under the FLSA.  Here are a few and you can go to the source page for this information by clicking this link.

  • Employees “Suffered or Permitted” to work: Work not requested but suffered or permitted to be performed is work time that must be paid for by the employer. For example, an employee may voluntarily continue to work at the end of the shift to finish an assigned task or to correct errors. The reason is immaterial. The hours are work time and are compensable.
  • Problems arise when employers fail to recognize and count certain hours worked as compensable hours. For example, an employee who remains at his/her desk while eating lunch and regularly answers the telephone and refers callers is working. This time must be counted and paid as compensable hours worked because the employee has not been completely relieved from duty.

5. Just read this one to form your own opinion:

  • The Act also permits the employment of certain individuals at wage rates below the statutory minimum wage under certificates issued by the Department of Labor:

    • Student learners (vocational education students);
    • Full‑time students in retail or service establishments, agriculture, or institutions of higher education; and
    • Individuals whose earning or productive capacities for the work to be performed are impaired by physical or mental disabilities, including those related to age or injury.

6. Here is a long list of the types of positions that employers do not have to pay minimum wage or overtime too:

  • Executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools), outside sales employees, and certain skilled computer professionals (as defined in the Department of Labor’s regulations) 1
  • Employees of certain seasonal amusement or recreational establishments
  • Employees of certain small newspapers and switchboard operators of small telephone companies
  • Seamen employed on foreign vessels
  • Employees engaged in fishing operations
  • Employees engaged in newspaper delivery
  • Farm workers employed on small farms (i.e., those that used less than 500 “man‑days” of farm labor in any calendar quarter of the preceding calendar year)
  • Casual babysitters and persons employed as companions to the elderly or infirm

You can find more about the list above by going to this webpage

7. And lastly.  Any information that I did not cover which you are curious about fact checking, please vist: http://www.dol.gov/whd/flsa/.

I hope this helps you all as much as it helped me.  The conclusion I came up with was that we need to modify the requirement for who has to pay minimum wage.  Most employers who run their own business (i.e. mom and pop styles) are already paying way above the minimum wage requirements for the federal and state levels.  Those who don’t, well, that is where policies and laws need to be put into place to help those folks along who should be helping their hard-working employees out.  

Later folks,

Keith 

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One thought on “Minimum wage – facts about the Fair Labor Standards Act…

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