• The federal and state governments work together to make sure workers are paid a reasonable amount.united states of america image by Vladislav Gajic from Fotolia.com
  
  Congress passed the Fair Labor Standards Act in 1938 to ensure that all workers are paid a reasonable amount and given a reasonable amount of time away from their jobs. The federal government is authorized by this act to set a minimum wage and minimum standard for overtime pay. The government adjusts these standards periodically to ensure they reflect the increased standard and cost of living.
  
  

Persons Covered by Law

• The Federal Fair Labor Standards Act applies to all businesses that engage in interstate commerce and/or make more than $500,000 in one year. Smaller businesses are exempt, although employees may be covered if they travel between states for work purposes. Hospitals, educational institutions and institutions that primarily care for mentally or physically disabled persons must follow these laws. Household employees are covered by these laws if they make more than $1,700 per year or work more than eight hours per week.
  Certain employees are exempt from minimum wage and overtime pay requirements. People employed in a professional capacity (teachers, attorneys, physicians, etc.), seasonal employees, fishermen and farmhands on small farms, newspaper delivery people, people who work on foreign ships and employees of small newspapers or telephone companies are exempt from both requirements. Certain salespeople, broadcast news personnel, farm workers, movie theater employees and transportation system employees are exempt from overtime pay requirements.
  
  

Minimum Wage Law

• The minimum wage is the lowest pay rate employees may legally offer to new hires. It is set at the federal level, and states may set their won minimum wage standard as long as it is not lower than the federal standard. The federal minimum wage set in July 2009 is $7.25 per hour for employees over the age of 20. Youth under the age of 20 are allowed to be paid $4.25 per hour for the first 90 days; however, employers are not allowed to hire youth over equally qualified older applicants in order to pay the lower rate. The minimum wage is $7.25 per hour in most states as of June 2010, but it is slightly higher in nine states and the District of Columbia. The minimum wage in Puerto Rico--a U.S. territory--is $6.55.
  The employer may use any pay schedule it desires as long as employees are not paid for more than 40 hours in a week and the pay rate conforms to the minimum wage. Employers may count expected tips as part of the minimum wage as long as they pay the employee a base rate of at least $2.13 per hour.
  
  

Overtime Pay

• The Fair Labor and Standards Act requires employers to award overtime pay if employees work more than 40 hours in a week. As of 2010, the federal overtime pay rate is time and a half. This means that if an employee works more than 40 hours, she must be paid for an hour and a half of work for each additional hour she works. For example, if she works 50 hours in a week, she must be paid for the additional 10 hours as if she worked 15 hours.