Wage and Hour Laws

AuthorJeffrey Wilson

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The Fair Labor Standards Act, enacted by Congress in 1938 and amended numerous times since then, requires most employers in the United States to comply with minimum wage and hour standards. The law's basic requirements govern the payment of a minimum wage, payment of overtime pay for employees working more than 40 hours per work week, employment limitations for children, and mandated record keeping by employers.


At the end of the nineteenth century, the industrial age was spurring the growth of factories known as sweatshops. Sweatshops routinely employed women, children, and recent immigrants who had no choice but to accept inferior wages and harsh working conditions. Social activists pushed for laws at the state level to pay all workers, regardless of social status or gender, wages that would allow them to maintain an adequate standard of living.

Massachusetts, in 1912, became the first state to enact a law mandating a minimum wage. Other states soon followed suit. Widespread poverty during the Great Depression increased public awareness of the need for wage standards, and by 1938, twenty-five states had enacted minimum wage laws. Some states established commissions to determine the minimum wage based on what the commission perceived to be a "living" wage for employees. Some of these commissions also took into account the employer's financial conditions in determining appropriate wages. Other states simply established flat minimum wage rates for all employees in those states.

Eventually, however, the success of state wage statutes was tempered by court decisions, including a U. S. Supreme Court decision that held state minimum wage laws to be unconstitutional. According to the courts, these laws violated the rights of employers and employees to freely negotiate and form contracts over appropriate wages. President Franklin D. Roosevelt responded by attempting to enact federal legislation granting the president the authority to regulate a minimum wage as part of the federal government's right to regulate interstate commerce. The Supreme Court found President Roosevelt's first attempt at such legislation to be unconstitutional, but the Court upheld his second attempt, the 1938Fair Labor Standards Act (FLSA), as constitutional.

Fair Labor Standards Act

The FSLA requires that most U. S. workers are entitled to receive a minimum hourly wage. This feder-

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ally enacted minimum wage changes only when Congress passes a bill and the president signs it into law, which happens periodically in keeping with U. S. economic conditions. When the FSLA was enacted, the minimum wage was 25 cents an hour. In 2002, the minimum wage was $5.15 an hour.

The FSLA also requires that most U. S. workers are entitled to receive one and one half times their hourly rate of pay, even if that rate is above the minimum wage, for hours worked in excess of 40 hours per work week. This is known as overtime. The FSLA also contains child labor restrictions and mandates certain working conditions for children under the age of 18. Finally, to ensure that employers comply with the federal law, the FSLA requires them to...

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