Wages, Hours, and Pay

The Fair Labor Standards Act (FLSA) establishes a federal minimum wage and requires premium pay for overtime work. It also sets out certain work-hour limitations for minors. The FLSA’s main requirements are straightforward. The law’s complexity derives from problems in applying its general provisions to the many forms that compensation takes and to difficulties in counting hours of work. Analysis of wage and hour issues is further complicated by the existence of many exceptions (exemptions) to the FLSA’s general requirements.

Under the FLSA, employers must pay employees at a rate no less than the minimum wage for each hour worked during a workweek. The federal minimum wage was increased to $7.25/hour in July 2009 and will remain at that level until such time as Congress decides to change it. Many states (and some cities), however, have established minimum wage rates well in excess of the federal minimum wage. For the majority of employees, it is state and local laws that define their minimum rate of pay.

Under the FLSA, employers must pay at least one and one-half times an employee’s regular rate of pay for each hour worked in excess of forty hours in a workweek. Other than for minors, the FLSA does not limit the number of hours employees can be required to work. Instead, the act gives employers a financial incentive to limit overtime because those hours of work must be compensated at a premium.

Pay disparities based on any protected class characteristics are discriminatory, but pay discrimination based on sex is a particular concern. A substantial gap still exists between the earnings of full-time male workers and full-time female workers. Overall, female workers had median weekly earnings that were 82 percent of men’s corresponding earnings in 2016. Many factors undoubtedly account for the persistent male-female earnings gap.