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Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) was enacted during the Great Depression at a time when the unemployment rate was 19 percent. It was intended to promote economic recovery and is credited with helping to improve the nation’s economy by providing workers with greater buying power. The FLSA establishes the 40-hour work week and requires employers to pay time-and-a-half premium pay for work performed in excess of 40 hours a week. It also provides for a federal minimum hourly wage to assure that people who work at jobs are not forced to live in poverty. The FLSA is intended to set a national floor for wages and hours, above which states may provide additional protections or a higher minimum wage.
When the republicans gained control of Congress in the mid 1990’s, they launched a full-scale attack on the FLSA on behalf of their corporate allies who characterized the FLSA as outmoded and no longer necessary. Under the Bush administration the attacks were stepped up and, in 2004, the Bush administration took away overtime protection from millions of workers through regulatory changes at the U.S. Department of Labor. Moreover, Congress failed to increase the minimum wage for a full decade, adding countless American families to the poverty rolls and contributing to the enormous income inequality of recent years.
Minimum Wage Increase
When the Democrats gained majorities in the House and Senate in January, 2007, legislation to increase the minimum wage by $2.10 an hour passed the democratic-led House of Representatives in the "first 100 hours." It took longer to get the minimum wage increase passed in the Senate because republican senators held the minimum wage increase hostage to huge corporate tax cuts.
The minimum wage increase finally was enacted and signed into law in May, 2007, and the last of its three scheduled increases went into effect in July, 2009, when the minimum wage rose to $7.25 an hour. Although this was a significant increase that benefited about 12 million workers, the minimum wage will need another boost in order to help lift low-wage workers out of poverty.
For this reason, the UAW and other unions are urging our allies in Congress to introduce a new minimum wage bill to increase the wage floor and to index the minimum wage so that it will increase automatically rather than requiring congressional action.
Contrary to misinformation spread by opponents of the minimum wage, a solid body of research has proved that no job loss results from reasonable minimum wage increases. In fact, a study of the impact of state minimum wage increases showed that in states with minimum wage rates higher than the federal level, small business employment and overall employment grew faster than in states where the federal rate was in place.
The purchasing power of the minimum wage has fallen over time. If the federal minimum wage in 1968 ($1.60 an hour) had kept pace with inflation, it would be approximately $9.90 an hour today. The UAW believes the federal minimum wage needs to be raised to the level Congress intended when the FLSA was enacted, one that will lift working families out of poverty and help reverse the income inequality in our country. We support indexing the wage to eliminate the need for protracted legislative battles in the future. An increase in the minimum wage is both humane and good for the economy. It would help raise the standard of living of millions of working people. At the same time, it would provide the economy with a needed boost, by increasing the purchasing power of millions of American workers.
During the second session of the 111th Congress, the UAW and other unions will urge Congress to pass new legislation to increase, and to index, the minimum wage. We will insist that Congress pass a "clean" minimum wage bill without any extraneous proposals that would take away FLSA protections from some workers or provide additional tax cuts for businesses.
Action
* Urge representatives and senators to cosponsor, and to support, new legislation to increase the minimum wage to an adequate level and to index it in order to eliminate the need for Congress to periodically raise it.
* Tell Congress to reject proposals that would tie the minimum wage increase for some workers to FLSA takeaways for other workers or to proposals to give more business tax cuts.
Eligibility for Overtime
The "white collar" regulations issued during the Bush administration removed millions of workers from the wage and hour protections of the FLSA. One way this was accomplished was by setting the ceiling for automatic overtime eligibility at an unrealistically low annual salary level of $27,500. This means that most "white collar" workers with a salary of $27,500, or more, a year are not automatically entitled to overtime pay. Instead, they are subject to a series of regulatory tests to determine whether they are entitled to overtime pay. As a result, many of these "white collar" workers wind up being considered ineligible for overtime pay.
The UAW believes that no worker whose annual salary is less than $45,000 should be denied time-and-a-half for overtime, regardless of his or her education, job title or duties. This is the ceiling that would have been set under the pre-2004 overtime rules, adjusted for inflation. Accordingly, in the coming session of Congress we will advocate for legislation to increase the ceiling for the FLSA’s automatic overtime eligibility and to index this ceiling to keep pace with inflation.