Fair Labor Act | Fair Pay

Fair Labor Act

The Fair Labor Standards Act (FLSA) commonly known as the Fair Labor Act was originally enacted in 1938 and revised in 2004 in order to ensure that American workers receive fair pay for their labor.

For most workers, the FLSA overtime laws are fairly simple: Employees that meet all of the exemption criteria are paid a salary and are not eligible for overtime pay. These exempt employees usually include administrative, executive, or professional employees who are paid an annual salary in equal payments either by the week, bi-weekly, or monthly. Most hourly workers who do not perform managerial or discretionary duties are subject to the protection of the FLSA and are supposed to receive overtime pay.

For example, an employee who spends more than 80% of the time performing exempt duties should be classified as an exempt employee. However, anyone who spends more than 80% of the time engaged in duties that are not exempt and works more than 40 hours in a workweek should most likely receive overtime pay under the Fair Labor Act.

In general, lower wage-earning hourly employees are classified as non-exempt workers who must be paid overtime. The FairPay Overtimes Rules deal with employee classifications. However, technology has blurred the clear distinctions between manual laborers and white collar workers. Some recent cases have shown that many workers now wearing “white collars” often grind out reports or other similar types of work with little or no discretionary power or managerial duties that were once the hallmark of “white collar” workers.

Computer workers of various types have commonly not been paid overtime for the many extra hours they have spent working. Though they are often working with sophisticated equipment and programs, they are not writing code. Similarly in 2003, Starbucks was sued under the Fair Labor Act for unpaid overtime to assistant managers who they misclassified as exempt even though they spent the majority of their time making lattes just like the lower ranking baristas who were paid overtime.

Under the current Fair Labor Act guidelines, exempt employees usually include administrative, executive, or professional employees who are paid an annual salary in equal payments either by the week, bi-weekly, or monthly. These salaried employees work “off the clock” as defined by the FLSA overtime rules and do not usually receive overtime pay.

Well-compensated stockbrokers have traditionally been classified as exempt workers not eligible for overtime payment, however most stockbrokers are not salaried, receiving instead only commissions. Under the Fair Labor Act most exempt employees must receive salaries. The result was that many stock brokerages have settled with the plaintiffs even while maintaining their compliance with the law. In November of 2006 The Labor Department issued a non-legally binding opinion letter which stated that brokers are exempt under the FLSA. It remains to be seen how this will work out in the future.

The evolution of the American workplace means that many employees that were traditionally not protected under the original FLSA are now receiving deserved compensation for the many overtime hours they put in. If you think that you might have a valid claim, please complete our Case Evaluation Form as completely as possible and one of the Lore Firm’s experienced overtime lawyers will consult with you as to the merits of your case.

Fill out our quick case evaluation form for a free and confidential review of your situation.