Fair Labor Standards Act (FLSA), Scope and Penalties
By: Adriane Luna
The main purpose of the enactment of the Fair Labor Standards Act (FLSA) is to provide the employers and the employees the minimum guidelines and requirements on wages and salaries.
The FLSA requires employers to pay their employees covered by the Act a wage of at least $5.85 per hour (effective July 24, 2007); at least $6.55 per hour (effective July 24, 2008); and at least $7.25 per hour (effective July 24, 2009).
Also, the Act requires the employers to pay their employees below 20 years old a minimum wage of $4.25 per hour during the first 90 employment days.
Employees may be paid on a piece-rate basis by their employers provided they receive the equivalent of the minimum hourly wage rate prescribed by law.
What's more, Tipped employees or those who usually receive a monthly tip of $30 may consider such tips as part of their wages, on the condition that their employers pay them a minimum direct wage of $2.13 per hour.
On the contrary, FSLA does not cover the following institutions regardless of their dollar volume:
2. Care Institutions for the Sick, Aged, Mentally Ill, or Disabled;
3. Special Schools for Disabled Children;
4. Preschools, Elementary, Secondary, and Tertiary Schools; and
5. Federal, State, and Local Government Agencies.
The Act also protects the following workers provided they receive a minimum yearly cash wage of $1,500 or provided they work for not less than 8 hours per week for one or more employers:
1. Day Workers,
2. Domestic Service Workers or Housekeepers;
4. Cooks; and
5. Full time Babysitters.
The FLSA provides certain exceptions to the minimum wage rule, as in the cases of: 1. Student Learners, On-the-job Trainees, Vocational Education Students;
2. Full time students employed in:
a. Retail or Service Firms,
b. Agriculture; or
c. Educational Institutions; and
3. Employees with disabilities, whether physical or mental, as long as their disabilities affect their earning capabilities.
Various remedies are being used by the Department of Labor to enforce compliance with the FSLA. Listed below are the penalties and probations prescribed by law for offenders:
1. For first offenders, the Wage and Hour Division investigators usually order the employers to change their employment practices. They will also order them to pay their employees back wages.
2. A willful violator shall be given a fine of not more than $10,000.
3. An offender who has been subject to a second conviction shall be tried and imprisoned.
4. Frequent violators shall be ordered to pay an additional fine of not more than $1,000 per violation.
The Department of Labor may also file a lawsuit against employers for employees’ back pay and liquidated damages. The department may also obtain preliminary injunctions to prevent the employers from violating the FSLA.
Once the department assesses a civil money penalty, it is the violator’s right to avail and file for an exception. The exception shall be filed 15 days from receipt of the notice of the department’s assessment. Otherwise, the penalty becomes final and executory.
The case then shall be referred to an Administrative Law Judge for hearing. At the hearing, the judge shall determine whether the penalty imposed on the violator is appropriate.
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