The Fair Labor Standards Act (FLSA) contains the federal minimum wage provisions and for covered nonexempt employees, it is currently $7.25 per hour. The whole purpose of the minimum wage is to ensure that workers don’t receive unduly low pay and employers can’t pay workers less than the minimum amount, subject to some exceptions.
The minimum wage doesn’t increase automatically. Congress has to pass a bill and the president must sign it into law for the minimum wage to go up.
What happens if state law requires higher payment than federal law?
Some states have a higher or lower minimum wage than the federal minimum wage. When an employee is subject to state and federal minimum wage laws, the employee is entitled to receive the higher of the two amounts.
Philadelphia currently lags behind most large cities in the country that have all raised their minimum wage. As of Jan. 1, 2020, Philadelphia minimum wage was still $7.25 an hour. Attorneys at The Lacy Employment Law Firm can offer advice on minimum wage issues.
If the Raise the Wage Act of 2021 is passed, the minimum wage in Philadelphia would increase to $15 an hour by June 2025. When Seattle raised its minimum wage to $15.00, this garnered national attention.
To whom does minimum wage apply?
The minimum wage law applies to employees of enterprises with an annual gross volume of sales of at least $500,000. It also applies to employees at smaller firms engaged in interstate commerce or the production of goods for commerce. Janitors, maintenance employees and guards who perform duties essential to such interstate activities are covered.
The FLSA also applies to federal, state, or local government agency employees, schools, hospitals and generally applies to domestic workers. There are a number of exemptions from the minimum wage that may apply to some workers.
How do courts differentiate between employees and independent contractors?
Courts usually consider whether employees are “economically dependent” on the business to which they render service to determine whether they are covered under the FLSA. The courts also look at a variety of factors to differentiate employees from independent contractors. For example, they will look at the degree of control an employer has over the way in which work is performed. Typically employers have more control over employees than independent contractors.
Who enforces minimum wage?
The Wage and Hour division of the Department of Labor enforces the minimum wage. The department has offices throughout the country and location and phone numbers are available online. It uses public education and enforcement to ensure that workers are paid the minimum wage.
The Wage and Hour Division can detect and investigate violations and compel witnesses to attend hearings. It may also require employers to make records available. The Secretary can sue if there is a violation and recover some unpaid benefits on behalf of employees.
A failure to enforce the minimum hourly wage gives an advantage to employers who break the law. The FLSA also affords a private right of action for employees to recover unpaid minimum wages.
Does minimum wage law apply to employees who are paid a salary?
An employer can’t offer a salary that’s so low that the resulting pay is less than the minimum wage when the weekly pay is divided by the number of hours the employee works. The average hourly earnings for the week must equal $7.25 or higher. For instance, an employer would have to pay an employee a salary of at least $290 per week for forty hours of work to be acceptable.