Minimum Wage

There is an ongoing call for an increase in the minimum wage to $15 per hour. Everyone knows that the current minimum wage does not provide enough income for anyone to sustain a household. There is an ongoing battle and back and forth discussion in Congress that has delayed an increase in the minimum wage. In addition to Congress, small businesses have many concerns about a minimum wage increase and how it will affect their bottom line. There are many unanswered questions, and no one has gone to the extent to explain to small businesses how they will be affected or how they should implement an increase if and when the minimum wage increase is approved. We all know that some kind of increase is necessary, and the fact remains the same that the current minimum wage is not a “living wage.” It is not enough for employees to live comfortably.
While we do not have the answers, we must understand Fair Labor Standards and the minimum wage law, so we are prepared for whatever happens with the minimum wage.
The Fair Labor Standards Act is the primary law regulating labor and wages in the United States. In 1938, President Roosevelt introduced FLSA and enforced it as the Wage and Hour Division of the United States Department of Labor. It ensures the establishment of federal minimum wage, mandates overtime pay, creates child labor laws, and sets employer record-keeping requirements, which applies to all workers in federal, state, and local governments.
The Fair Labor Standards Act represented a shift in the labor policy. For the first time, the federal government set a minimum wage for employees, therefore, establishing a principle that people are entitled to a particular pay amount for their work. Since the establishment of the Act in 1938, 12 different presidents have raised the minimum wage more than 22 times. The federal minimum wage history is a labor conflict and political struggle, which began in Europe and carried over to the United States.
The FLSA ensures a federal minimum wage rate, which is the lowest hourly wage for employees to cover for their labor. The federal minimum wage increases periodically through a Congressional Act to compensate for the rising living costs and inflation. The federal minimum wage from 2009 until now is $7.25 per hour. It applies as a base law in all 50 states, including the District of Columbia.
Tipped Employees–Under the FLSA, a ‘tipped employee’ is a worker in any occupation who receives over $30 in tips per month. Therefore, federal law allows an employer of tipped employee claims to ‘tip credit,’ whereby an employer can pay at least $2.10 per hour in cash wages. The sum of the employees who received tips and the cash wage should be equal to or more than the applicable minimum wage rate per hour.
Students–FLSA, however, allows for certain exemptions to the minimum wage law. Students, employees, and minors who have physical or mental disabilities may receive payments under the minimum wage if the employer has a certificate from the department of labor.
Apprenticeships–Under the minimum wage, the FLSA also covers the apprentice minimum wage. Apprenticeships refer to programs where people learn skills by working. They are “earn and learn” programs. Apprenticeship programs must register with the department of labor or other federal agencies recognized by the state. It, therefore, makes the apprentices have entitlement on the federal minimum wage, which begins from their training period. As the skills of the apprentice increase, their pay also increases. The pay increase is made compulsory by federal law.
Child Labor Laws–The federal child labor laws prohibit children from working in hazardous environments such as mining sites or manufacturing explosives. The law allows children to perform jobs such as newspaper delivery, babysitting, theater or movie productions, working in a family business that is not hazardous, and minor chores in private homes. FLSA does not limit hours of work for 16 years and above, but children below 15 years can only work outside school hours. On school days, they can work for 3-hours, 18-hours for school weeks, 8-hours for non-school days, and 40-hours for non-school weeks. They can also work only between 7 am and 7 pm. Under the FLSA, employees under 20-years should receive payment of not less than $4.25 per hour.
Overtime–In overtime pay, employees should receive overtime wages for work done over 40-hours a week. The FLSA overtime regulations describe one workweek as 168-hours. However, federal law does not limit the number of hours required of a worker, although overtime must be more than 40-hours in a workweek.
Obama Overtime Law–The Obama Overtime Law was introduced to protect employees making under weekly or annual thresholds when they work more 40-hours a week. The Obama overtime law raised the salary threshold pay from $23,360 to $ 47,746 every year. The law was great news for employees since it allowed them to receive additional compensation for overtime–work outside the recommended 40-hours.
However, the Trump administration overthrew the Obama overtime law by setting new rules on overtime pay. The new rule benefitted fast-food restaurants, home health care, and lower-paid workers. However, the Trump administration rule receives criticism since it only covers few workers compared to the Obama overtime law. The labor department under the Obama administration proposed raising the threshold to over $47000, which would cover more than 5 million eligible employees. The Trump administration declined the actions to defend the rule and issued an overtime rule that lowered employee salary levels. The new overtime rule also does not provide for the regular increase of the threshold. The Obama administration proposal would have ensured the indexing of the wage growth levels, adjusting it to three years.
Overall, the topic of the minimum wage has many layers and years of government battles. Many people need an increase in the minimum wage. Many people will be affected if and when the minimum wage gets increased. We should all continue to monitor Congress for discussions on the minimum wage and plan for an increase. It will be to our benefit to prepare.