This article’s headline describes one of the most common problems that confront employers in managing today’s workplace. The failure to pay employees properly as required by the Fair Labor Standards Act (FLSA) and similar state wage and hour laws is the basis for the most frequently filed legal actions against employers.
The FLSA has been in place since the darkest days of the Great Depression in the 1930s. In addition to mandating a federal minimum wage to combat a plague of sweatshops, it required overtime pay of one and one-half times for all hours over 40. It was also at least partially intended to create more jobs in response to massive unemployment. By requiring a hefty premium for working an employee more than 40 hours, employers might find it cheaper to hire another employee to work those additional hours at straight-time pay. Whether it actually had a significant effect on unemployment is not entirely clear. Today, the FLSA applies to virtually every workplace in America.