The Fair Labor Standards Act was established in order to put forth criteria that would determine which employees are eligible for overtime pay and set standards for minimum wages and conditions for youth employment. This paper will look at the features of FLSA, explore the proposed changes to this Act and the effects they are likely to cause both employees and employers. Fair Labor Standards Act
Salient features of the Fair Labor Standards Act include the establishment of minimum wage and overtime pay, recordkeeping as well as setting standards for the employment of the youth that need to be followed by both private and government employers in the United States. These standards cover both part time and full time employees (WHD, 2009). All employees covered under the FLSA are broadly categorized as either exempt or nonexempt. Exempt employees are defined as those who are not entitled to overtime pay.
Nonexempt on the other hand refers to those employees who are entitled to overtime pay. However, a large number of the employees governed by the FLSA fall under nonexempt category (Chamberlain, Kaufman and Jones, 2003). According to the FLSA regulation, nonexempt and exempt employees can be differentiated by considering the following criteria. First an employee can only be considered exempt if his/her salary amounts to at least $23,600 per annum or $455 per week.
Second, the employee must be paid on a salary basis and the third criteria states that the employee should perform exempt job duties which involve managerial, administrative or professional skills (Chamberlain, Kaufman and Jones, 2003). In March 2003, certain changes to the FLSA were proposed in a bid to make the criteria for differentiating exempt and nonexempt employees simpler. For instance the modifications were aimed at eliminating the discretion and independent judgment requirement considered for administrative exemption.
The criteria to be followed would instaed require one to either perform work that is substantially important or one that required higher skills or training level (Levin, 2009). The criteria for executive exemption stating that an employee should primarily perform managerial duties would also change. The proposed changes suggested that to qualify for executive exemption an employee was required to have the authority to hire and fire and make recommendations in an organization (Levin, 2009).