The Fair Labor Standards Act (FLSA) provides workers with minimum wage, overtime pay, and child labor protections. The FLSA covers most, but not all, private and public sector employees. In addition, certain employers and employees are exempt from coverage.
Provisions of the FLSA that are of current interest to Congress include the basic minimum wage, subminimum wage rates, exemptions from overtime and the minimum wage for persons who provide companionship services, the exemption for employees in computer-related occupations, compensatory time (“comp time”) in lieu of overtime pay, and break time for nursing mothers.
Basic Minimum Wage
• The FLSA requires employers to pay covered, nonexempt employees at least the minimum wage. In 2007, the basic minimum wage was raised, in steps, from $5.15 to $7.25 an hour. The basic minimum wage was raised to $7.25 an hour effective July 24, 2009. As of January 1, 2013, 19 states and the District of Columbia have minimum wage rates that are higher than the federal minimum wage rate.
• Basic minimum wage rates in American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI) are lower than in the continental United States. In 2007, Congress passed the Fair Minimum Wage Act of 2007 (P.L. 110- 28), which mandated annual increases of $0.50 an hour in the minimum wages of American Samoa and CNMI. In 2010, Congress temporarily suspended these increases. The minimum wage in CNMI increased by $0.50 an hour to $5.55 on September 30, 2012. In July 2012, Congress delayed the increases in American Samoa. The next minimum wage increases in American Samoa are scheduled for September 30, 2015.
Subminimum Wage Rates
• Tipped employees may be paid less than the basic minimum wage, but their cash wage plus tips must equal at least the basic minimum wage of $7.25. Employers may pay tipped workers $2.13 an hour in cash wages, provided the employees receive at least $5.12 an hour in tips. The latter amount is called a “tip credit.”
• Employers may pay special minimum wages (SMWs) to workers with disabilities. The purpose of the SMWs is to provide persons with disabilities the opportunity to work.
• The FLSA requires employers to pay at least time-and-a-half to covered, nonexempt employees who work more than 40 hours in a week at a given job.
• The FLSA allows covered, nonexempt state and local government employees to receive compensatory time off (comp time) for hours worked over 40 in a workweek. Comp time is time off with pay in lieu of overtime pay.
• The FLSA exempts certain employers and employees from the minimum wage, overtime pay, or child labor standards of the act.
• Certain employees in computer-related occupations are exempt from both the minimum wage and overtime standards of the FLSA if they meet an hourly wage or weekly salary test and a job duties test.
Domestic service workers who provide companionship services in private homes are exempt from both the minimum wage and overtime requirements of the FLSA. Under regulations proposed by the U.S. Department of Labor (DOL), minimum wage and overtime coverage would be extended to companions employed by a third party. Overtime pay would be extended to live-in domestic service workers employed by a third party.