FAIR LABOR STANDARDS ACT 52 Stat. 1060 (1938)

The Fair Labor Standards Act (FLSA), usually called the federal wage and hour law, was adopted in 1938. For all covered employees the act required the payment of a minimum wage (initially 25 cents an hour) and time and one-half for all hours worked over forty a week. Child labor was forbidden under certain circumstances. The act prohibited the shipment in interstate commerce of goods produced under substandard conditions. There were numerous and complicated exemptions.

The constitutionality of the act under the commerce clause was sustained by the Supreme Court in united states v. darby lumber co. (1940). Since then the act has been amended many times, principally to increase periodically the minimum wage, which reached $3.35 an hour in 1981, to expand coverage, and to provide more effective enforcement.

The act originally covered employees engaged in commerce or in the production of goods for commerce. Production was defined to include activities necessary to the actual production.

Coverage based on engagement in commerce includes employees engaged in the actual movement of commerce, such as transportation, shipping, and communications. It also includes employees whose work involves the distribution or receipt of goods across state lines. The Supreme Court upheld application of the act to employees who did construction or repair work on interstate instrumentalities and even to employees who prepared plans and specifications for the construction or repair of interstate instrumentalities.

Under the extended production definition, many fringe activities were found necessary to production. Thus, the Court upheld application to employees of an office building occupied by a corporation which at other locations produced goods for commerce and to employees of an independent contractor washing windows in industrial plants that produced goods for commerce.

These decisions, although they involved statutory construction, demonstrated the enormous scope of the commerce power even under coverage formulas less extensive than that used to describe the constitutional maximum, "affecting" commerce. The breadth of the Court's holdings led Congress in 1949 to amend the statute to confine the extended production definition to activities "closely related" and "directly essential" to production.

The reduced coverage effectuated by this change was largely nullified, however, by a 1961 amendment providing for "enterprise" coverage. Before 1961 coverage was determined for each employee; thus, some employees of an employer could be covered while others were not. "Enterprise" coverage extended to all an employer's employees, if at least two employees were covered individually and the enterprise did a requisite annual dollar volume of business. The constitutionality of "enterprise" coverage was upheld by the Court in Maryland v. Wirtz (1967).

Other aspects of the act have also received expansive interpretation. Thus, the term "employee" has been defined in accordance with "economic reality" rather than common law rules, and applied to persons who in other contexts would be independent contractors. These cases illustrate the peculiar American phenomenon of defining "employee" differently under various statutes, so that an employee may be covered under one statute and not under another.

What constitutes compensable work time has presented a special problem under the FLSA. In Armour & Co. v. Wantoch (1944), involving firefighters, the Court held that inactive waiting time was compensable work time. Time spent in travel between the mine entrance and the underground cutting face was held compensable in Tennessee Coal, Inc. & Railroad v. Muscoda Local (1944). Finally, in Anderson v. Mt. Clemens Pottery Co. (1946), the Court required payment for time spent by employees walking between the factory gate and their work place. Many lawsuits were promptly filed claiming billions of dollars in back wages. Congress responsed by enacting the Portal-to-Portal Act of 1947, which distinguished between an employee's compensable principal activity and noncompensable preliminary and after-working activities. Employers were thus absolved in most cases from liability under the Mt. Clemens Pottery decision. The Court held, however, that time spent changing clothes, when necessitated by the nature of the work, is a principal activity and thus compensable.

The FLSA applies on a work week basis. Overtime is required for hours in excess of forty a week. The required time and one-half premium is applied to the employee's "regular rate of pay" which is determined by dividing the total weekly compensation (including straight wages plus all fringe benefits) by the number of hours worked. Because employee pay plans are of great variety, determination of the regular rate of pay frequently is a difficult problem.

Among the principal exemptions from the FLSA are executive, administrative, and professional employees (which terms have special definitions), employees of small retail or service establishments, and some employees engaged in agriculture. Special provision is made for learners, apprentices, students, and the handicapped.

The act is enforced by individual employee suits for back wages, or suits by the secretary of labor seeking an injunction as well as back wages. Individual suits are preempted by suits by the secretary. Liquidated damages are authorized. trial by jury is available in employee suits, but generally is denied in combined injunction-back-wage suits by the secretary. The FLSA is unique in labor legislation in providing criminal prosecution for willful violators. Such actions are handled by the Justice Department, but have not been a major aspect of the statute's enforcement.

Originally the FLSA applied only to private employment. In 1966 it was extended to employees of state hospitals and schools; this extension was sustained in Maryland v. Wirtz (1967). In 1974 Congress extended the FLSA to almost all state and local government employees. In national league of cities v. usery (1976) the Court held that the tenth amendment protected state sovereign functions against commerce power regulation and overruled Maryland v. Wirtz. Usery in turn was overruled by garcia v. san antonio metropolitan transit authority (1985). Congress responded the same year with legislation authorizing states and cities to reimburse employees for overtime with compensatory time off in lieu of cash payment.

In 1938 the principal purpose of the FLSA was to combat the Depression by increasing the purchasing power in the hands of the lowest-paid workers. Thus, it has been called the original antipoverty law. Fifty years later, the wisdom of the act and its effect on the economy are still debated, but the FLSA survives as a permanent and major piece of American labor legislation.

William P. Murphy
(1986)

Bibliography

Player, Mack 1975 Enterprise Coverage under the Fair Labor Standards Act: An Assessment of the First Generation. Vanderbilt Law Review 28:283–347.

Willis, Robert N. 1972 The Evolution of the Fair Labor Standards Act. University of Miami Law Review 26:607–634.