NCPA - National Center for Policy Analysis

Fair Labor Standards Act

June 29, 2001

The Fair Labor Standards Act was passed in 1938 to protect workers and to ensure "a fair day's pay for a fair day's work." However, a service economy has replaced the manufacturing economy's assembly-line work and fixed-schedule environments. The Employment Policy Foundation points out that this shift makes reform of the FLSA an increasingly important issue. The number of dual-earner married couples has grown from 9.2 percent to 36.8 percent of all households, leaving more employees struggling to balance work and family responsibilities. Employees favor some of the alternative work arrangements -- such as compensatory time-off or work schedule flexibility -- that the FLSA currently outlaws.

  • The FLSA requires time-and-a-half pay for any hours worked over 40 in a week, but only 28.5 percent of employees work more than 40 hours in any given week.
  • The median hourly wage of overtime workers is currently $2.83 more than the typical hourly worker, which suggests that overtime work is done by choice rather than necessity.
  • A 1995 national opinion poll by Penn and Shoen found that 74 percent of private sector employees prefer the option of paid time off in lieu of overtime pay, and 51 percent said they would use this option more often than receiving overtime cash wages.
  • In the same poll, 65 percent of employees preferred having a flexible work schedule that would permit compressed workweeks or flexible daily hours.

The entrance of more women and mothers into the labor force has contributed to a greater need for flexibility, say analysts. Unfortunately, unless the FLSA is brought into the 21st century, it will continue to prevent hourly employees from choosing additional time off instead of overtime pay, stifle flexible work schedule options, and impede important decisions involving the balance of work and family.

Source: "Time Can be More Important Than Money: Bring the Fair Labor Standards Act into the 21st Century," Policy Backgrounder, May 2, 2001, Employment Policy Foundation, 1015 Fifteenth Street, NW, Suite 1200, Washington, D.C., 20005, (202) 789-8685.


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