The FLSA Turns 80: A Look Behind, a Look Ahead, a Look Beyond

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The basis for this octogenarian statute, its successes, and the challenges it continues to face

 

Eighty years ago today, the US economy was in its final years of the Great Depression when President Franklin D. Roosevelt signed the Fair Labor Standards Act (FLSA) into law as part of his “New Deal” legislation. Created to provide employees the right to a minimum wage and overtime pay and place limitations on the employment of minors, the federal law affected 700,000 workers nationwide.

FLSA Rules and Regulations

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The catalyst behind the 1938 version was to strike a balance between protecting those most vulnerable to workplace exploitation while stimulating the economy. This still rings true today, but the past decades have also seen significant technological changes, and many feel the law has not kept up with the contemporary and ever-changing needs of the American workplace.

TSheets recently asked 500 business owners about FLSA, and we were met with startling statistics:

  • 43 percent admitted to not knowing what the law pertains to.
  • Only 1 percent of business owners think FLSA as easy to follow.

And that’s a lot to take in, given FLSA wage and hour lawsuits are up 417 percent, with the total back wages and fines recovered from employers is just over $2 billion. Common violations include:

  • Misclassifying employees
  • Overlooking off-the-clock work
  • Failing to pay unauthorized overtime
  • Not tracking breaks accurately
  • Keeping inaccurate or incomplete records
  • Not compensating interns or volunteers
  • Failing to stay up-to-date with regulations
Exempt versus nonexempt employees

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Even more recently, TSheets sat down with the experts — Celine McNicholas from the Economy Policy Institute and Ivo Becica from Obermayer — to get their views on how FLSA has fared over the years and what should be in-store moving forward. While the panelists may have different views depending on the lens they’re looking through, they agree on how the above-mentioned issues are and will continue to beleaguer FLSA without better rollout and enforcement processes.

It can be easy to find faults with the FLSA, but it’s important to recognize its value. Designed to catapult shared prosperity across America, the FLSA has helped raise the minimum wage from a quarter an hour in 1938 to the current $7.25, increase the average household income from $1,731 to $58,829, and reduce the workweek from 44 hours to 40.

The gap lies in a law that’s constantly playing catch-up with technology that’s erasing borders and transcending the physical working space. The very definition of “going to work” has evolved so drastically since 1938, it is simply impossible for any law to remain relevant in its entirety over time without a complete rehaul or constant revision.

The future of work is already here. Based on our research, the FLSA’s agenda must change with the times whenever the opportunities arise, or risk rendering itself archaic.

 


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Disclaimer: Please refer to a professional tax or legal advisor regarding specific requirements of the FLSA and how they impact your business. TSheets does not recommend particular employee classifications or practices and leaves those decisions to the discretion of your organization.

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