Episode 1: The Law Behind Rising Workplace Wage and Hour Litigation

Hear how a decades-old landmark law guides today’s employers on some of the most pressing issues facing companies. Bill Martucci, who leads Shook, Hardy & Bacon’s national Employment Litigation and Policy Practice, shares insight in these bite-sized podcasts focusing on the Fair Labor Standards Act. Whether you’re a seasoned general counsel or just finding your way through the myriad of state and federal wage and hour laws, listening to Bill’s soothing discourse is time well spent.

 

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TRANSCRIPT

Hello, this is Bill Martucci. I am fortunate to be the practice group leader for Shook, Hardy and Bacon. I’m in Washington, D.C., and we’re looking at wage and hour laws.

We’re about to step into a podcast series where few have ever even thought about going. And that is, we’re going to look at the Fair Labor Standards Act. We’re going to look at it together in a way that is brief and practical and hopefully one that really permits you to have new insights.

We’re also going to look at whole host of issues that come up under the Fair Labor Standards Act, and if we embrace that over time with great focus and insight together, then we’ll actually go ahead and look at a variety of state laws, most prominently California.

Well, today we are going to look at it very briefly. We are going to take a historical glance. We’re going to look at its framework and what does it do and what doesn’t it do. Then we’re going to leave ourselves with great excitement as we look ahead for future efforts.

The Fair Labor Standards Act. Very Interesting. It was passed in 1938. So, we have the Great Depression. Truly one that we know historically and in recent years we have had our own great recessions and great resets. But quite candidly, as you probably have a sense of, there was nothing quite like the Great Depression.  Franklin Delano Roosevelt looked ahead and one of his hallmark pieces of legislation was the Fair Labor Standards Act. The thought was we were on our backs.  How do we get back on our feet? Would regulation from the government be helpful? And the overall response was yes it would.

There was controversy—there had been many, many attempts to have laws in place about minimum wage, overtime, questions about what is the work week, what is compensable time, but it all came together in the Fair Labor Standards Act. And the biggest aspects, if you will, for your day-to-day efforts about the fair labor standards are, one, it sets a minimum wage, and two, it provides for overtime. So, in simple terms, there is a federal minimum wage per hour for every hourly worker, but then also for those that work over 40 hours, there is time and a half. That is essential to the Fair Labor Standards Act. Now, yes, there are many other provisions, but we have many other days ahead to look at those.

But to begin with, we understand it was the Great Depression. It was 1938, that we were going to provide for a minimum wage and we were going to provide for 40 hours, beyond that would be overtime, it would be time and a half. Why do that? Let’s think about it. We were really with extraordinary rates of unemployment.  Wouldn’t the provisions of overtime encourage an employer to hire other people, to engage other people, to build the base. And so together, the minimum wage is a floor, the overtime compensation after 40, that was going to be the answer in terms of the framework. 

The Department of Labor would be established. Within the Department of Labor there would be many various efforts—for example, the Wage and Hour Administration—that would implement the law. The law would permit lawsuits to be brought and there were certain things the law didn’t do. This is very hard to understand because you may have a collective bargaining agreement.  More likely you have a series of company policies. And you think well, gosh, that’s the law.  But sincerely, the Fair Labor Standards Act itself is relatively focused and streamlined. And yet those provisions have caused the greatest explosion of litigation that we have known in the American workplace over the last number of years and it continues. But what does the act not do?

Well, a number of things it doesn’t do. It does not regulate regular, commonplace employment practices.  It doesn’t regulate vacation, holiday, severance or sick pay. It doesn’t regulate holidays off or vacation time. It doesn’t regulate premium pay for weekdays or holiday work. It doesn’t regulate pay raises and fringe benefits. It does not regulate the fact that you would get some notice of your dismissal.

What does it do? Key points: it establishes a minimum hourly wage and it establishes overtime and the other big area—it establishes exemptions to overtime. And we will look at that over time as well. Over time in the sense of our efforts together.

That’s enough for today.  The Fair Labor Standards Act 1938. Talk to you again soon. Thanks so much.

If you’d like more information on this topic, go to our website, shb.com. And a reminder that the choice of a lawyer is an important decision and should not be based on advertising. The information in this podcast is for informational purposes only and it is not intended to be any kind of legal advice.