An Overview of Federal and State Wage-hour Laws-part I
| Publication year | 1985 |
| Pages | 384 |
| Citation | Vol. 14 No. 3 Pg. 384 |
1985, March, Pg. 384. An Overview of Federal and State Wage-Hour Laws-Part I
The notion that employees must be paid at least the minimum wage and time and a half for overtime is familiar to most employers. However, the source of these obligations and their ramifications are often not so familiar. The purpose of this article is to provide an overview of federal and Colorado law governing wages and hours. Part I addresses the federal wage-hour laws; Part II, to appear as this column in the May 1985 issue, will discuss the state laws.
The federal wage-hour statute of most general application is the Federal Fair Labor Standards Act ("FLSA"), which sets federal minimum wage and overtime pay standards.(fn1) Generally, the FLSA establishes a federal minimum wage (since January 1, 1981) of $3.35 per hour. As to overtime pay, the FLSA requires that employees be paid time and one-half their regular hourly rate for all hours worked in excess of forty hours for the work week. The FLSA also contains provisions regulating child labor, home work, equal pay and employer recordkeeping.
The FLSA has two types of coverage: employee and enterprise coverage. An employee is individually covered by the FLSA if engaged in commerce or in the production of goods for commerce.(fn2) The term "employee" is defined broadly under the FLSA as a person whose activities are controlled or directed by an employer and who works necessarily and primarily for the employer's benefit. Independent contractors are excluded from coverage.
In addition to employee coverage, all employees of a business are covered by the FLSA if the business is an "enterprise engaged in commerce or in the production of goods for commerce."(fn3) Enterprise coverage extends to all employees of a covered enterprise, including those doing purely local work. To be a covered enterprise, a business must first meet a commerce test.(fn4) For some businesses (such as laundries and dry-cleaners, construction companies, hospitals, nursing homes, schools and public agencies), the commerce test is the only prerequisite to enterprise coverage.(fn5) Other businesses must, in addition, meet a statutory minimum-dollar volume of business.(fn6)
Considering the employee and enterprise coverage standards, and the effects of inflation since the dollar standards were established, most employers, other than strictly local "Mom-and-Pop" businesses, are covered by the FLSA.
Exemptions from coverage of the FLSA are either determined by an employee's activities or are establishment-wide or industry-wide. Two of the FLSA's most important individual employee exemptions apply to "white-collar" employees (executive, administrative and professional) and to outside salespeople.(fn7) These employees are exempt from the minimum wage and overtime pay, but not the equal pay provisions of the FLSA.
The determination of whether any particular employee falls within these exemptions is largely factual in nature, based upon the employee's salary, duties and responsibilities, and must be determined in accordance with the Wage and Hour Division's highly detailed interpretative guidelines.(fn8) A number of exemptions on an industry-wide basis provide relief from the FLSA's minimum wage, equal pay and overtime pay provisions, as well as from the overtime pay-only and child labor provisions.(fn9) Learners, apprentices and students are given a partial exemption from the FLSA's minimum wage standards.(fn10)
Because overtime pay under the FLSA is based upon the number of hours worked by an employee in the workweek, there is often some question as to whether a particular activity constitutes "hours worked" for which an employee must be compensated. Generally, employees must be compensated for the time they are engaged in their principal activity or required to be on the employer's premises, on duty or at a prescribed workplace, and for the time they are "suffered or permitted" to work, whether or not they are requested to do so.(fn11)
A more difficult question...
To continue reading
Request your trial