Fair Labor Standards Act. Changes to minimum wage, whether to increase it for certain workers, and overtime payment have been hot topics in the United States. For this discussion, you will evaluate the proposed revisions to the FLSA concerning minimum wage and overtime wages. Based on your own experience with labor and wages, or a specific example you have seen in the news, review the benefits and non-benefits for employees and employers. You do not need to provide personal details but do provide an overview of the situation. This overview will enable you and your classmates to discuss how the proposed new wage laws would impact your described situation. Explain specific ways these new laws can benefit or not benefit both the employee and the employer in your situation. Support your evaluations with at least two scholarly journal articles about the proposed amendments.
The Fair Labor Standards Act (FLSA) is a cornerstone of labor legislation in the United States, designed to protect the rights and well-being of American workers. In recent years, debates and discussions surrounding the FLSA have intensified, particularly regarding revisions to minimum wage and overtime payment. This essay will critically evaluate the proposed amendments to the FLSA, focusing on the implications for both employees and employers. Drawing from personal experiences and real-world examples from the news, we will discuss the potential benefits and drawbacks of these revisions for the workforce and business owners. To substantiate these discussions, we will reference recent scholarly articles addressing the proposed amendments.
The proposed revisions to the FLSA regarding minimum wage have stirred intense debates. The federal minimum wage has remained at $7.25 per hour since 2009 (U.S. Department of Labor, 2021). Some states have independently raised their minimum wages, and there is a growing movement advocating for a federal minimum wage increase. Such an increase could greatly benefit low-wage workers by providing them with a more livable income. For instance, research by Cooper and Hall (2020) suggests that raising the federal minimum wage to $15 per hour could substantially reduce poverty rates and improve the financial stability of millions of Americans. This demonstrates a clear advantage for employees.
However, not everyone agrees with raising the minimum wage. Some argue that it may lead to job loss, particularly in industries where labor costs are a significant portion of expenses. According to Neumark (2021), minimum wage hikes could result in job cuts, as businesses might struggle to absorb increased labor costs. This highlights a potential drawback for employers, who may be forced to make difficult decisions, such as reducing their workforce to maintain profitability. Therefore, while an increased minimum wage could be beneficial for employees, it may present challenges for certain employers.
In addition to minimum wage revisions, changes to overtime payment rules have also been a point of contention. The FLSA mandates that most workers are entitled to overtime pay at a rate of 1.5 times their regular hourly wage for hours worked beyond 40 in a workweek (U.S. Department of Labor, 2021). However, the threshold for eligibility has been a subject of debate. The Department of Labor proposed an increase in the salary threshold for exempt employees from $23,660 to $35,568 in 2019 (U.S. Department of Labor, 2019). This proposed change could extend overtime pay protections to millions of additional workers.
From an employee’s perspective, these changes could have significant benefits. Overtime pay serves as an incentive for employees to work extra hours, and it compensates them fairly for their time and effort. In their study, Lee and McCann (2019) found that expanding overtime protections results in an increase in take-home pay for eligible workers, ultimately enhancing their financial security. This suggests that increasing the overtime eligibility threshold can be seen as a positive development for employees.
However, employers may view this change differently. Expanding overtime eligibility could increase labor costs for businesses, particularly small and medium-sized enterprises. A study by Brenner (2017) highlights that the proposed threshold increase would lead to additional costs for employers, potentially impacting their ability to invest in other areas of their businesses. This illustrates a potential drawback for employers who would have to adapt to these increased labor costs, possibly leading to adjustments in staffing or hours to control expenses.
Considering these proposed amendments in the context of real-world examples, the impact on employees and employers becomes more evident. For instance, in 2020, the U.S. House of Representatives passed the “Raise the Wage Act,” advocating for an increase in the federal minimum wage to $15 per hour by 2024 (U.S. Congress, 2019). This has received both strong support and opposition. Supporters argue that it would lift many workers out of poverty and stimulate consumer spending. Critics, on the other hand, express concerns about potential job losses and adverse effects on businesses, particularly in rural areas with lower living costs (Congressional Research Service, 2019).
The overtime payment threshold change is also exemplified in real-life scenarios. In 2019, the Department of Labor proposed an increase in the salary threshold for overtime eligibility, expanding coverage to a broader range of workers (U.S. Department of Labor, 2019). This was met with approval from labor unions and workers’ rights advocates who argued that it would benefit millions of employees. Conversely, some business associations expressed reservations, fearing the financial burden of increased overtime pay and the potential for wage compression within their organizations (National Retail Federation, 2019).
In conclusion, the proposed revisions to the Fair Labor Standards Act (FLSA), specifically concerning minimum wage and overtime pay, have generated extensive debate and discussion. The impact of these changes varies depending on one’s perspective, whether that of an employee or an employer. Raising the minimum wage can undoubtedly provide substantial benefits for low-wage workers, potentially reducing poverty and improving financial stability. However, it may also present challenges for certain employers who could face difficulties in absorbing increased labor costs. Expanding overtime eligibility thresholds can be seen as a positive development for employees, as it increases their take-home pay and enhances their financial security. Nonetheless, it may pose challenges for employers, particularly in terms of managing higher labor costs and making necessary adjustments to their workforce and business operations.
Real-world examples and ongoing legislative initiatives, such as the “Raise the Wage Act,” illustrate the practical implications of these proposed amendments. These proposals have elicited strong support and opposition, depending on whether one prioritizes the welfare of employees or the concerns of employers. In light of these debates and discussions, it is evident that achieving a balance between the interests of employees and employers is a complex task. Legislators and policymakers must consider the potential benefits and drawbacks carefully. The goal is to strike a balance that ensures fair treatment for workers while allowing businesses to remain competitive and viable. The proposed amendments to the FLSA represent a pivotal moment in shaping the labor landscape in the United States, and the outcomes will have far-reaching consequences for both workers and businesses.
Brenner, H. (2017). DOL Overtime Rule Would Hurt Business, NFIB Tells Congress. National Federation of Independent Business.
Congressional Research Service. (2019). The Raise the Wage Act: H.R. 582.
Cooper, D., & Hall, D. (2020). The Federal Minimum Wage in Context. Economic Policy Institute.
Lee, S., & McCann, D. (2019). Overtime and Worker Well-being. Industrial & Labor Relations Review, 72(2), 297-319.
National Retail Federation. (2019). DOL’s New Overtime Proposal: What Employers Need to Know.
Neumark, D. (2021). Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research. NBER Working Paper No. 28388.
U.S. Congress. (2019). H.R.582 – Raise the Wage Act.
U.S. Department of Labor. (2019). Overtime Update: Salary Threshold Rises to $35,568.
U.S. Department of Labor. (2021). Minimum Wage.