An Overview of the Fair Labor Standards Act

History
The Fair Labor Standards Act (FLSA) of 1938, has been an ongoing challenge for employees. The act entitles covered employees to be paid overtime, which is any time being worked over 40 hours in a week and paid time and a half their normal hourly rate.
What Has Happened.
Before the FLSA of 1938 was introduced, many blue-collar workers such as those working in an industrial profession, worked between 10 to 16 hours per day, earning just enough to provide for their families ().
In 1938, President Franklin D. Roosevelt made a promise to protect American workers by establishing overtime and creating labor safety regulations and minimum wage. With Roosevelt 100% behind his decision, overtime pay regulations would serve to discourage companies

from overworking their employees in order to avoid paying overtime wages, and as a result encouraging additional hiring in order to make up for fewer hours worked by their existing employees ().
The overtime rules enacted were designed to address several of the main problems Roosevelt sought to address with his labor reforms - lack of jobs, and the exploitation of those who had jobs.

Overtime pay regulations would serve to discourage companies from overworking their employees in order to avoid paying overtime wages, and as a result encourage additional hiring to make up for the fewer hours being worked by their existing employees.
The most recent changes to overtime law were made in 2004 under the "FairPay" initiative by President George Bush. In this controversial piece of legislation, the definition of "overtime exempt employees" was changed to include many low-level working managers and/or supervisors by reclassifying them as "executives". This change caused millions of workers to lose overtime protection, and sparked a huge debate culminating in the attempted repeal of the FairPay act.
Since its inception in 1938, overtime law has proved to be one of the core fundamentals necessary in maintaining a safe and equal workplace. The FLSA continues to be modified in order to meet the changing needs of the American workforce, and overtime regulations will continue to play a key part in maintaining and enforcing a fair system of organized labor in the United States.
What Is

Happening.
Today, the U.S. Department of Labor (DOL) has proposed a highly anticipated new rule that will broaden federal overtime protection for employees. According to the Secretary of Labor Thomas Perez , “The proposed overtime rule goes to the heart of what it means to be middle class in America” (Cinquegrani, 2015). This means that based on DOL’s calculations, the amount of exempt employees will be rendered non-exempt and eligible for overtime is about 25%.
In March 2014, President Obama directed the Secretary of Labor to modernize and streamline existing overtime regulations for exempt executive, administrative, and professional employees. This was driven by the President’s view that the compensation paid to these employees has not kept pace with America’s economy since the DOL last revised pertinent regulations in 2004. In particular, the President noted that the minimum annual salary level for these exempt classifications under the 2004 regulations of $23,660 was below the poverty line for a family of four.
Most significantly, the proposed rule calls for raising the minimum salary level for white collar exemptions from $455 a week to $921 a week ($47,892 a year). In addition, the DOL expects to revise the minimum salary level to $970 a week ($50,440 a year in 2016) when it issues its Final Rule. The DOL estimates that another 500,000 to one million exempt employees would lose their exempt status over the next 10 years as a result of increasing the salary threshold (Eisenbrey, 2014). The DOL recognizes that employers are likely to reduce the working hours of currently exempt employees reclassified as a result of these regulations, and that the reduction in hours will probably lead to lower overall pay for these employees.
Expected Upcoming Events.
The DOL may make additional key changes to the overtime regulations that could impact some employers.

Specifically, the proposed rule gives the public the opportunity to voice their opinions on whether to allow nondiscretionary bonuses to satisfy some portion of the required salary level and if current job duties should be modified for exempt status. As of now, it is unclear when, or even if, the DOL will make changes on any of these topics. As a result, the employer community continues to hold its collective breath.
Importance of Overtime
The changes that President Obama is asking to make toward overtime has many employers concerned on what to do next and how will this affect their company. The new rules raised the income level at which workers can automatically qualify for overtime eligibility for the first time in decades. This would effectively give close to five million workers a raise while strengthening overtime protection for another ten million, according to the White House (Rush, 2015).
Currently, the only workers who automatically qualify for overtime pay are those earning $23,660 or less. Salaried workers who fall above that limit can only receive overtime pay if they are not classified as administrators, executives, or professionals (called the EAP exemption). The exemption has caused millions of workers to be misclassified as managers or administrators, even if the majority of work they perform doesn’t reflect their title (Cobum and Jackson,

2015).
The new rule mandates that all salaried workers, regardless of title or duties, are eligible for overtime if they earn $50,440 or less—effectively raising the previous limit to keep up with inflation. And although the new limit includes a large majority of all salaried workers, the change will disproportionately benefit women, minorities, and workers who are less educated, all of whom have historically had much less bargaining power to change their working conditions.

Analysis
Outcomes as noted by various industry experts.
Conclusion