Fair Labor Standards Act

The US Fair Labor Standards Act (FLSA) is a federal legislation that determines the minimum wage, overtime payment, recordkeeping and youth employment standards for private sector and federal, state and local governments. The Fair Labor Standards Act (FLSA) was passed in 1938 to protect employees from unfair labor practices, as well as to ensure they are paid fairly. Important elements of the FLSA include the federal minimum wage, which establishes the lowest hourly wage employers can pay their employees, and overtime pay requirements, which provide that eligible employees should get payment at a rate of at least one and a half times their standard wage for hours worked above 40 in a workweek.

Example of Fair Labor Standards Act

Let us say GHI Stores is a retail chain in America. It has to follow Fair Labor Standards Act (FLSA) in its employment processes. GHI Retailers recruits hourly workers for its stores, distribution centers, and corporate offices. Under the FLSA, the employees of GHI Stores are subject to the federal minimum wage that is regularly adjusted by the U.S. Department of Labor. Furthermore, non-exempt employees who work more than 40 hours in a workweek are paid overtime compensation based on a rate of one and a half times the regular hourly wage. To guarantee compliance with the FLSA, GHI Stores keeps up-to-date records of employees' hours and payrolls. The FLSA violation can incur penalties, fines and even law suits, so GHI companies takes the necessary steps to ensure compliance with the labor standards and worker rights protection.