Employment Laws on Wages
- Federal law mandates a minimum wage.check in macro image by Alexey Klementiev from Fotolia.com
Congress set the first minimum wage in the United States in 1938. Since then, minimum wage has increased steadily. However, minimum wage is not the only labor law pertaining to wages. The government also mandates laws regarding prevailing wage and overtime wages. Knowing your rights under employment laws on wages is important to see that you are getting paid your fair share. - The Fair Labor Standards Act entitles most workers to a minimum wage. On July 24, 2009, the minimum wage increased to $7.25 an hour. The law does not entitle workers to sick leave, holiday pay, paid vacations or severance pay. The law is also silent on bonuses not based on production. Many states have their own minimum-wage laws. If the wages are lower than federal minimum wage, they apply to occupations not covered by the Fair Labor Standards Act. If they are higher than federal minimum wage, they cover all occupations.
- Federal law entitles many employees to special pay rates for any hours over 40 worked in a single pay week. Salaried employees are exempt from this law. The overtime rate cannot be less than 1 1/2 times the normal hourly rate of pay. Employers may define work weeks differently for different groups of employees; however, the workweek must be a defined 168-hour period of seven consecutive days. Overtime pay is not required on any day of rest or holiday unless the employee works overtime hours.
- The United States has four federal prevailing wage laws. The Walsh-Healy Public Contracts Act requires prevailing wages for all businesses with manufacturing contracts from the federal government. The Service Contract Act requires the same of companies with contracts to provide services. The Contract Work Hours and Safety Standards Act mandates overtime regulations for service, construction and supply contracts with the federal government valued at $100,000 or more. Finally, the Davis-Bacon Act (and related acts) call for prevailing wages and fringe benefits on all construction projects with federal funding or other assistance.
- The Fair Labor Relations Act dictates specifics on deductions from employee salaries. Uniforms and other items that are mostly for the benefit of an employer may not be counted as wages. If the employer expects the upkeep of such items to be paid for by an employee, deductions in this regard may not reduce an employee's wages below minimum wage. This applies to other areas, such as damages caused by employee negligence. Further, employers may not circumvent this law by having their employees pay them back with cash after being paid.
