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Fair Labor Standards Act. Minimum Wage Provision $5.15 / hr. Advantages - wage floor, min. standard of living Disadvantages - limits opportunity for unskilled, and the youth; may encourage substitutes for labor. Tipped employees - $2.13 / hr. Overtime Provision

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fair labor standards act
Fair Labor Standards Act
  • Minimum Wage Provision
    • $5.15 / hr.
    • Advantages - wage floor, min. standard of living
    • Disadvantages - limits opportunity for unskilled, and the youth; may encourage substitutes for labor.
    • Tipped employees - $2.13 / hr.
  • Overtime Provision
    • 1.5 X Base Wage Rate for > 40 hours/ week
    • Only non exempt ees’ (hourly) covered
    • Employer Required to file non-exempt ees’ records of work hours with Dept. of Labor

Management 4030- Managing Employee Reward Systems

flsa cont d
FLSA (Cont’d)
  • Enforcement of FLSA
    • Audits
    • Investigations
    • Remedies include back wages, attorney fees and court orders to stop violating FLSA
    • Fines and imprisonment for willful violators
  • Exemptions
    • Executives/ Managers
    • Administrative Employees
    • Professionals
    • Outside Sales Force
  • Challenge: Correct Classifications of Jobs

Management 4030- Managing Employee Reward Systems

problems managing under the flsa
Problems Managing Under the FLSA
  • Correct Classifications of Exemption Jobs
    • Exs. Team leader? Telemarketers?
  • Bonus Calculations - Non-discretionary bonus is part of overtime pay calculation.
    • Ex. Shift premiums, Xmas bonus, special duty pay.
  • Independent Contractor or Employee?
    • Set own hours, own tools, own office & work site
  • Tracking hours of non-exempts - Time clocks?
  • Inflexible work hours - bias to 40 hr. work week.
    • 50/30 schedule --> 10 hrs. OT
  • Comp Time - time off instead of pay for OT?

Management 4030- Managing Employee Reward Systems

managing flsa in the work place of the 1990s critical thinking questions
Managing FLSA in the work place of the 1990s: Critical thinking Questions

Overtime Provision:

  • How do you manage the overtime of people who telecommute from a home office?
  • There is a negative incentive to provide variable pay for non-exempt employees because the “bonus” calculation becomes very complicated for overtime. Is there a way to avoid this problem?

Management 4030- Managing Employee Reward Systems

equal pay act 1963
Equal Pay Act (1963)

Definition: Equal Pay for Jobs of Substantially Equal Work

  • Federal law to insure that women are paid equal to men if they are doing similar work.

Factors that Define Equal Work

  • Skill
  • Effort
  • Responsibility
  • Working Conditions

Management 4030- Managing Employee Reward Systems

equal pay act continued
Equal Pay Act (Continued)

There are 4 Legal Exceptions to the EPA: Men and Women’s Pay on a similar job can be Different Due to Differences in...

1. Seniority

2. Performance or Merit ( A valid Supervisor-based evaluation of performance)

3. Quantity or Quality of Output (such as a piecework or sales commission plan)

4. Factor other than Gender such as Night shift differential or hazardous duty differential.

Management 4030- Managing Employee Reward Systems