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Chapter 12 Wages Hours and Pay Equity Discussion

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Chapter 12: Wages, Hours, and Pay Equity
When a company hires employees, they are responsible for fair wages, hours, and pay equity
of that employee pursuant to laws enacted by the Federal Labor Standards Act (FLSA) and the
U.S. Department of Labor (DOL). The FLSA and DOL have set regulations for minimum wage,
overtime pay, record keeping, and child labor standards. FLSA sets certain work-hour
limitations for minors and it is important for employers to know these limitations. Both full-time
and part-time employees who are employed in the private sector and governmental organizations
fall under the guidelines of these federal regulations (Luce, 2017, para 2). Both states and city
governments can have their own employment laws, however, they must pay employees an hourly
rate that is higher than the federal minimum wage and they must pay wages promptly (Luce,
2017, para. 1). The last mandated minimum wage standard set by FLSA was in July 2009 for the
hourly wage of $7.25 for non-exempt employees and employees must be paid for overtime at a
rate of not less than one and one-half times their regular rates of pay (Luce, 2017, Para 2.).
Overtime rate of pay is considered when an employee works more than 40 hours in a workweek.
There are exemptions of the FLSA and the top four exemptions include the Executive
Exemption, Administrative Exemption, Professional Exemption, and information technology
workers who are most likely salaried employees. The Economic Realities Test was created to
determine whether a worker qualified for the FLSA exemption. The test is used to determine
who is exempt from the regulations of the FLSA. For many salaried employees, mandates
regarding overtime pay do not apply because work is dependent on the completion of task, not
the number of hours worked (Luce, 2017, para. 6).
The Equal Pay Act (pay equity) requires that employees be paid fairly, where employees
receive equal pay for equal work, regardless of the gender of an employee. Employers must pay

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equal wages to men and women who perform jobs that require the same amount of skill, effort,
and responsibility, and that are performed under similar working conditions. If men and women
are not paid equal wages for the same job it may be considered as sex discrimination. In case of
a pay discrepancy, the law mandates that an employer cannot reduce another employee’s pay to
resolve the disparity. Instead, the lower paid employee must receive a raise to bring them to the
same level as their counterpart. Wage discrimination can lead to costly lawsuits and it is not
good for the reputation of the business. Violating any of the FLSA and DOL laws can result in
costly fines and settlements in the case of a lawsuit.
Chapter 13: Benefits
When beginning a new job, employees have big concerns regarding whether they will be
able to put aside enough for their retirement and whether they will have easy access to their
retirement benefits. The Employee Retirement Income Security Act (ERISA), enacted in 1974,
provides guidelines on how to administer employee benefit plans to pension or insurance
companies and private employers. ERISA a federal law regulating the benefit plans of private
sector employees (Walsh, 2016, p. 490). ERISA does not cover health plans by governmental
entities or plans established by churches for their employees. It also does not cover plans that
relate to state laws, like unemployment or workers compensation. ERISA does not require
private employers to have pension plans, but they do have minimum standards for those
employers that do provide pension plans (Purcell, 2008, para. 1).
The U.S. Department of Labor began regulating employee benefit plans in 1959 with the
enactment of the Welfare and Pension Plan Disclosure Act (WPPDA). This Act required
employers to make plan descriptions and annual financial reports available to the government
and plan participants. WPPDA was meant to give employees a chance to keep an eye out on any

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Chapter 12: Wages, Hours, and Pay Equity When a company hires employees, they are responsible for fair wages, hours, and pay equity of that employee pursuant to laws enacted by the Federal Labor Standards Act (FLSA) and the U.S. Department of Labor (DOL). The FLSA and DOL have set regulations for minimum wage, overtime pay, record keeping, and child labor standards. FLSA sets certain work-hour limitations for minors and it is important for employers to know these limitations. Both full-time and part-time employees who are employed in the private sector and governmental organizations fall under the guidelines of these federal regulations (Luce, 2017, para 2). Both states and city governments can have their own employment laws, however, they must pay employees an hourly rate that is higher than the federal minimum wage and they must pay wages promptly (Luce, 2017, para. 1). The last mandated minimum wage standard set by FLSA was in July 2009 for the hourly wage of $7.25 for non-exempt employees and employees must be paid for overtime at a rate of not less than one and one-half times their regular rates of pay (Luce, 2017, Para 2.). Overtime rate of pay is considered when an employee ...
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