Fair Labor Standards Act of 1938 Essay

D.RooseveltFair Labor Standards Act of 1938 – as Amended As the United States endured the hardships of the Great Depression, the struggles of the working class grew and employers were able to take advantage of desperate workers by overloading hours and shrinking wages. In 1938, President Franklin Roosevelt, in his New Deal legislation, saw the opportunity to attend to the issues concerning workers involved in interstate commerce.

The Fair Labor Standards Act was passed, and the President described it in the following way “Except for the Social Security Act, it (the FLSA) is the most far-reaching, far-sighted program for the benefit of workers ever adopted here or in any other country. ” (Nordlund). The FLSA, as it is known, set a maximum number of hours worked, established a minimum wage earned, and set standards for overtime pay. The other aspect of the FLSA is that it outlawed child labor, restricted interstate trade of items made using child labor and set strict penalties for violators.

The law has been amended numerous times as commerce has changed and to address Supreme Court rulings. The Fair Labor Standards Act is my selection for this paper because it has directly impacted my life. As a call center manager, I was deposed regarding a lawsuit claiming there had been a violation of the FLSA. As a potential witness in a pending lawsuit I am not allowed to give specific detail. The case is centered around a violation of the Portal to Portal Act of 1947 which was passed in response to court rulings regarding whether or not employees were due to be paid for “performing certain employment-related activities. (Langston) Due to my involvement in this case, I developed an interest in the FLSA and this paper was an excellent opportunity for me to learn much more. The Fair Labor Standards Act was not an easy or swift law to pass. Labor unions had been fighting for a shorter work week and eight hour work days since the Civil War with slogans like “Whether you work by the piece or by the day, decreasing the hours increases the pay. ” States began passing laws that limited hours for women and children. New Zealand and Australia had passed minimum wage legislation in 1894 and 1896 respectively and been uccessful with them. Massachusetts passed a state level minimum wage law in 1912. In 1910 and 1911, Federal Bureau of Labor released a nineteen volume report from a study on the working conditions and wages for women and children describing employment conditions as “unsafe and unhealthy. ” (Nordlund) The Great Depression, in the United States, started in 1929 and ended around 1939. Unemployment was incredibly high and both labor unions and the President were looking at reduced hour as a way to reduce the unemployment issue. Samuel) In 1933, Roosevelt attempted to get voluntary support from employers to adopt a 35 hour work week and 8 hours days, but it did not mandate maximum hours or minimum wages. (Samuel) Some of the goals of supporters of the Federal Minimum Wage and a Maximum Hours hoped to accomplish were to eliminate “labor conditions detrimental to the maintenance of the minimum standard of living necessary for the health, efficiency, and the general well-being of workers” and “to increase employment by spreading the amount of available work. ” (Costa) The President did not feel that a Federal Law would succeed because of U.

S. Supreme Court rulings like Adkins V Children’s Hospital in 1923, which declared Oregon’s State Minimum Wage unconstitutional because it violated its 5th Amendment right to Freedom of Contract. It wasn’t until West Coast Hotel v. Parrish, on March 29, 1937 that minimum wage was declared constitutional by the U. S. Supreme Court. With the weight of that decision behind him, Roosevelt contended that “A self-supporting and self-respecting democracy can plead no justification for the existence of child labor, no economic reason for chiseling workers’ wages or stretching workers’ hours” (Nordlund).

Throughout the 1930’s, FDR passed some of the most significant social reform legislation in U. S. history, known together as “The New Deal. ” These included such laws as the Social Security Act, the Farm Security Administration, and the U. S. Housing Authority. In 1938, The Fair Labor Standards Act became the last piece of New Deal legislation passed. The Fair Labor Standards Act has been amended many times and is virtually an ever-changing law, however, it does not cover all employees.

There are several classes of “exempt” employees, including salaried employees in the executive/managerial, administrative, and professional areas. Outside salespeople are also considered exempt. One of the issues facing companies today is knowing which employees are exempt and which are non-exempt. There are tests to determine if an employee is exempt. In 2004 the tests changed to a standard test, which is whether or not the employee’s salary is $455/week or greater and the duties test, which allows for exempt status if more than 50% of the work performed by an individual is “exempt work. (Pass and Broadwater) Exempt employees do not receive overtime pay, which can be a substantial cost savings to a company. My previous employer required that an exempt manager close the center each night even though we had non-exempt team leads who acted as managers in most capacities. The reason was to avoid overtime costs. An ongoing issue regarding FLSA impacts to companies is the issue of what is called the Portal to Portal Act (PPA), passed in 1947. The question that this relates to is when does the work day start and consequently, when should an employee begin getting paid.

The 1946 court case of Anderson v. Mt Clemens Pottery Co. is what the U. S. Supreme Court refers to as the reason Congress passed the PPA. In that case, the court ruled that an employee was compensable for “the time spent walking from a time clock to the production floor as well as, time spent conducting the preliminary activity of donning non-protective gear. ” The court ruling is that these activities are compensable if they occur within the “continuous workday” which is defined as beginning with the first principal activity and ending with the last.

This interpretation includes not only the primary activity, but any activities deemed “integral and indispensable” to performing that activity. (Langston) The PPA protects employers from punishment for not paying an employee for traveling to or from the “actual place of the principal activity” or activities that start before or end after an employee stops working on the “principal activity. ” (Langston) The question with each new case is what is considered “integral and indispensable? Does an employee logging into his/her computer before they start their shift require overtime pay? These are the questions still facing employers today, some 63 years later. Immediately after the passing of the FLSA, there was a reduction of hours worked by employees. The “5% reduction in the length of the standard work week reduced by at least 18% the proportion of men and women working more than 40 hours per week. ” (Costa) Workers who do work over 40 hours per week receive pay at a rate of 1. 5 times their hourly wage because of the passing of the Act.

In addition, employees are compensable for all activities they perform that are deemed “integral and indispensable” to performing their “primary activities,” protecting them from performing work without the right to be paid. The other impact that employees have seen is the standard minimum wage. The initial wage was $. 25/hour in 1938 and had incremental increases up to $. 75/hour in 1949. (Costa) The minimum wage has increased numerous times over the past seven decades, and currently is $7. 25/hour. Minimum wage hikes are slow to happen and are often times not enough to offset inflation.

Before the increase to $7. 25, minimum wage had “its lowest purchasing power in more than fifty years. ” (Wicks-Lim) Business owners claim that the increase in wages will force them to close shop or lay people off as a ripple effect of the raise in minimum wage, but studies show that the “effects of the raises relative to the cost of doing business is minimal”. (Wicks-Lim) While the intent was good, it appears the end result is not such a clear cut benefit. In my opinion, after researching the Fair Labor Standards Act, I would say it has in fact been successful.

It was key legislation in the elimination of the exploitation of our children as factory workers. It has provided people with the benefit of overtime pay for working extra hours weekly, a means for many families to provide extra income to pay for vacations, home improvements, or for some just to pay the bills. It has been amended many times as commerce changed in order to address new issues in the workplace. There are opportunities to improve the FLSA, as there are with most things born of our political process.

There should probably be a more clearly defined timeframe for reviewing minimum wage for necessary adjustments. The battle between the courts and Congress over the Portal to Portal Act is not an ideal way to operate. When you look from a historical perspective though, the good that has come from the Fair Labor Standards Act clearly outweighs the opportunities it has to be improved. Works Cited Costa, Dora L. “”HOURS OF WORK AND THE FAIR LABOR STANDARDS ACT: A STUDY OF RETAIL AND WHOLESALE TRADE, 1938-1950. “. ” Industrial & Labor Relations Review (53. 4 (2000)): 648-664. Langston, Rachel, JD. IBP V. ALVAREZ: RECONCILING THE FLSA WITH THE PORTAL-TO-PORTAL ACT. ” Berkeley Journal of Employment & Labor Law (2006): 545-546. Nordlund, Willis J. “”A Brief History of the Fair Labor Standards Act. “. ” Labor Law Journal 39. 11 (1998): 715-728. Pass, Caryn G and Heather J Broadwater. Rural Telecommunications (2004): 28-32. Samuel, Howard D. “”Troubled passage: the labor movement and the fair Labor Standards Act. “. ” Monthly Labor Review (123. 12 (2000):): 32. Wicks-Lim, Jeannette. “Measuring the Full Impact of Minimum Wage and Living Wage Laws. ” Dollars and Sense (2006): 13-16.