Employment Law

Employee Compensation

What is the major federal law regulating compensation for employees?

The major federal law regulating wages for employees is the Fair Labor Standards Act (FLSA), passed by Congress in 1938 as part of the New Deal legislation. The purpose was to establish a minimum wage below which employers could not pay employees. The law also dealt with overtime pay and the regulation of child labor. The FLSA applies to states but states are free to pass legislation that provides even greater protections to employees than the federal law. When a state law conflicts with FLSA, the employer must provide the employee with the benefits of the law that provides greater protection. In other words, the FLSA sets a floor, not a ceiling.


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