Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8The Fair Labor Standards Act (FLSA) By: Angela Davis Clark, HR Director As we prepare for the General Election in November, there are a lot of issues on the platform for our Presidential candidates. But in 1936, Wage-hour legislation was a campaign issue for the Presidential race. The Democratic platform called for higher labor standards. Franklin D. Roosevelt promised to seek some constitutional way of protecting workers. The exploitation of child labor and the undercutting of wages and the stretching of the hours of the poorest paid workers in periods of business recession was thought to have a serious effect on buying power. Therefore, on June 25, 1938, President Franklin D. Roosevelt signed the Fair Labor Standards Act (FLSA) to become effective on October 24, 1938. President Roosevelt stated that America should be able to give “all our able-bodied working men and women a fair day’s pay for a fair day’s work.” The Act banned oppressive child labor and set the minimum hourly wage at 25 cents, and the maximum workweek at 44 hours. Since then there have been amendments to the Act. The FLSA establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, State, and local governments. The Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) administers and enforces the FLSA with respect to private employment, State and local government employment, and Federal employees of the Library of Congress, U.S. Postal Service, Postal Rate Commission, and the Tennessee Valley Authority. The FLSA is enforced by the U.S. Office of Personnel Management for employees of other Executive Branch agencies, and by the U.S. Congress for covered employees of the Legislative Branch. Special rules apply to State and local government employment involving fire protection and law enforcement activities, volunteer services, and compensatory time off instead of cash overtime pay. In 2014, President Obama signed a Presidential Memorandum directing the Department to update the regulations defining which white collar workers are protected by the FLSA’s minimum wage and overtime standards. On May 18, 2016, President Obama announced the publication of the Department of Labor’s final rule updating the overtime regulations, which would automatically extend overtime pay protections to over 4 million workers within the first year of implementation. The effective date of the final rule is December 1, 2016. Currently, workers earning less than $23,660 per year are guaranteed overtime protection. Due to the update which increases the standard salary level to $47,476, employees making less than the standard salary level will no longer be considered exempt and will be afforded overtime protection. Businesses with salaried employees making less than $47,476 annually, including the JCCO, have begun prepping for a significant change in overtime pay requirements set to take effect December 1, 2016. Employers will have to determine which employees are exempt and non-exempt under the new threshold requirement, and figure out how they wish to manage those employees who will shift in status under the new guidelines. Our employees who previously met the guidelines for exempt status, will no longer qualify as exempt if they do not meet the updated standard salary level. Therefore, they will convert from being exempt to non-exempt and will have the option per KRS 337.285 to earn overtime or elect to earn compensatory time in lieu of overtime pay. Both overtime and compensatory time is earned at a rate of one and one-half (1 ½) times the hourly wage rate in excess of forty (40) hours per work week. Automatic increases will occur every three years to account for inflation. The first update will take effect January 1, 2020 and is expected to be $51,000. United States Department of Labor, Final Rule: Overtime Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales and Computer Employees under the Fair Labor Standards Act, https: www.dol.gov/whd/ overtime/final2016/, retrieved 07/18/2016. Max Efrien, Employers are bracing for changes in overtime pay protections for salaried employees, published July 17, 2016, http://www.dcourier.com/ news/2016/jul/17/employers-are-bracing-changes- overtime=pay-...., retrieved 07/18/2016. United States Department of Labor, Wage and Hour Division (WHD), Handy Reference Guide to the Fair Labor Standards Act, https://www.dol.gov/whd/ regs/compliance/hrg.htm, retrieved 07/18/2016. Jonathan Grossman, Fair Labor Standards Act of 1938: Maximum Struggle for a Minimum Wage, https://www.dol.gov/general/aboutdol/history/ flsa1938, retrieved 07/18/2016. 3