Detailed Information on Wages in the United States

Fair Labor Standards Act (FLSA) has several important roles in the American economy. The FLSA establishes standards for the basic minimum wage and for overtime pay in the United States. It was established by the U.S. Congress in 1938, and it also sets the standards for child labor, and for recordkeeping by employers, according to Susan Healthfield, writing in about.com. The FLSA " ... affects most private and public sector employment," which includes federal government employees, state and local employment as well (Healthfield, 2015). This paper delves into how the FLSA applies to compensation in a variety of ways and situations.

The Minimum Wage -- Issues and Differences

While the FLSA sets the national minimum wage at $7.25 per hour -- that rate went into effect on July 24, 2009 -- it does not " ... provide wage payment collection procedures" for the additional wages that an employee may have been promised by his or her employer (dol.gov). However, state laws differ widely on the minimum wages paid, and in some cases an employee that has been promised additional compensation based on holiday work or other special cases may file for collection of a promised additional compensation (dol.gov).

The $7.25 minimum wage set by the FLSA (a division of the U.S. Department of Labor) and is seen to be far too low by many states and cities; hence, states may raise the minimum wage to levels that the political leadership feel is fair. For example, California and Massachusetts have a $10.00 an hour minimum wage, and the District of Columbia is the only jurisdiction with a higher minimum wage - $10.50. Alaska's minimum wage was raised to $9.75 through a ballot initiative; Vermont, Rhode Island and Connecticut have set the minimum wage at $9.60 per hour.

However, about 16 states maintain the $7.25 minimum wage and Wyoming, which appears to deviate from the FLSA law, pays just $5.15 for a minimum wage (www.minimum-wage.org). Some cities have raised the minimum wage far higher than the FLSA's guidelines: San Francisco and Oakland California now have a minimum wage of $12.25 an hour (CBS.com). The FLSA sets a different and very low wage ($2.13) for employees whose principle earnings come from tips; an employer may pay this low rate " ... if that amount plus the tips received equal at least the federal minimum wage ... and the employee receives more than $30 a month in tips" (dol.gov).

Coverage Under the FLSA

Employees may not be asked to work more than 40 hours per week " ... without receiving at least one and one-half times their regular rates of pay for the overtime hours" (Wage and Hour Division, dol.gov). "Waiting time," according to the FLSA, when the employee was "engaged to wait" it is considered work time. For example a firefighter may be playing chess or checkers while waiting for an alarm, and hence he or she is engaged to wait (and should be paid). But a person was "waiting to be engaged" -- that is, on call but not called in -- is not to be paid (Wage and hour Division, dol.gov).

Typically employees provide rest periods, 15 to 20 minutes, because they " ... promote the efficiency of the employee," and are paid as work time. However, the lunch break of around 30 minutes " ... generally need not be compensated as work time" (Wage and Hour Division, dol.gov).

There is a different minimum wage scale for youth under the age of 20; the FLSA requires these youth to be paid at least $4.25 an hour " ... during the first 90 consecutive calendar days after initial employment." Should a student under this guideline quit after, say, 60 days of summer work to return to the classroom, the 90-day eligibility period ends " ... for this employee with this employer 30 days after he/she quits"; and if the student returns to work later for the same employer, the eligibility period will have ended, and the 90-day cycle begins all over again.

Many young people are hired as temporary workers in the summer, and these guidelines generally apply to these employees. However, an employer may pay a youthful worker more than the minimum of $4.25 if that works for the employer. There are "certain protections" against the employer firing a person over 20 in order to pay smaller wages to another worker under 20; employers may not take " ... any action to displace any employee ... for the purpose of employing some at the youth age" as this would violate FLSA's Section 15(a)(3) anti-discrimination provision (Wage and Hour Division, dol.gov).

Full-Time Student Program

Students working in retail or service stores, in agriculture or on college or university campuses, can become involved in the Full-Time Student Program. An employer that hires these students is eligible to get a certificate from the Department of Labor authorizing that employer to pay students " ... not less than 85% of the minimum wage" (dol.gov). Students under this program may work up to 8 hours a day, but no more than 20 hours per week when school is in session, and 40 hours per week when school is not in session (dol.gov).