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Fair Labor Standards Act (FLSA)

5 minutes 5 Questions

The Fair Labor Standards Act (FLSA), enacted in 1938, is a foundational federal law that governs various aspects of labor, including minimum wage, overtime pay, recordkeeping, and child labor standards. For SHRM Certified Professionals focusing on Compensation and Benefits, understanding the FLSA is crucial to ensure compliance and to design fair and competitive compensation structures. Under the FLSA, employers must pay non-exempt employees at least the federal minimum wage, currently set at $7.25 per hour, though many states mandate higher rates. Additionally, employees classified as non-exempt must receive overtime pay at one and a half times their regular rate for hours worked beyond 40 in a workweek. Proper classification of employees as exempt or non-exempt is critical; misclassification can lead to legal penalties and increased compensation costs. The FLSA also sets standards for recordkeeping, requiring employers to maintain accurate records of hours worked and wages paid to employees. This transparency supports fair compensation practices and aids in auditing and compliance efforts. In the realm of Compensation and Benefits, the FLSA influences how organizations structure their pay scales, bonus systems, and incentive programs. SHRM professionals must design compensation packages that not only attract and retain talent but also comply with FLSA requirements. This includes ensuring that salary levels meet or exceed the minimum wage and that overtime policies are clearly defined and consistently applied. Moreover, the FLSA addresses child labor, restricting the types of work and hours that minors can perform. SHRM professionals must navigate these regulations when developing youth employment programs or internships. Overall, the FLSA serves as a critical framework for establishing equitable compensation practices. SHRM Certified Professionals must stay abreast of FLSA updates and related state laws to effectively manage compensation and benefits, mitigate legal risks, and promote a fair and compliant workplace environment.

Fair Labor Standards Act (FLSA) Guide

Introduction
The Fair Labor Standards Act (FLSA) is a foundational piece of U.S. labor law that establishes standards for minimum wage, overtime pay, recordkeeping, and youth employment.

Importance of FLSA
The FLSA is crucial for protecting workers’ rights, ensuring fair compensation, and preventing exploitation in the workplace. It sets the baseline for wages and working conditions, promoting economic fairness and stability.

What is FLSA?
The FLSA was enacted in 1938 and applies to most private and public sector employees. It defines key labor standards, including the federal minimum wage, overtime pay eligibility, and regulations regarding child labor.

How FLSA Works
The FLSA establishes:
- The federal minimum wage, which sets the lowest hourly pay that employers can legally pay employees.
- Overtime pay provisions that require employers to pay employees time and a half for hours worked beyond 40 in a workweek.
- Recordkeeping requirements for employers to maintain accurate records of hours worked and wages paid.
- Guidelines for the employment of minors, restricting the types of work and hours minors can work.

Exam Tips: Answering Questions on FLSA
1. Understand Key Provisions: Familiarize yourself with minimum wage requirements, overtime rules, exemptions, and child labor laws.
2. Analyze Scenarios: Apply FLSA principles to given workplace scenarios to determine compliance.
3. Use Clear Definitions: Clearly define FLSA terms and concepts in your answers.
4. Reference Legal Standards: Cite relevant sections of the FLSA when explaining your answers.
5. Practice Multiple Choice Questions: Enhance your ability to quickly identify correct answers by practicing various question types.
6. Time Management: Allocate your time wisely to cover all parts of the question comprehensively.
7. Review Key Cases: Be aware of landmark cases that have interpreted FLSA provisions.
8. Stay Updated: Ensure your knowledge is current with any amendments or updates to the FLSA as of the 2023 knowledge cutoff.

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SHRM-CP - Compensation and Benefits Example Questions

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Question 1

Under the Fair Labor Standards Act (FLSA), which of the following is a primary criterion for an employee to qualify for the executive exemption from overtime requirements?

Correct Answer: Primary duty is managing the enterprise or a department and regularly directing at least two full-time employees

The primary duty for the executive exemption under the Fair Labor Standards Act (FLSA) is managing the enterprise or a department and regularly directing at least two full-time employees. This criterion ensures that the employee holds a managerial role with significant responsibility. The other options describe duties related to professional, clerical, or sales exemptions, which do not meet the specific requirements for the executive exemption.

Question 2

Under the Fair Labor Standards Act (FLSA), which of the following is a primary responsibility required for an employee to be classified as exempt under the administrative exemption?

Correct Answer: Handling sensitive information requiring confidentiality and decision-making authority

Under the Fair Labor Standards Act (FLSA), the administrative exemption requires that an employee's primary duty involves performing office or non-manual work directly related to the management or general business operations of the employer. This includes handling sensitive information that requires confidentiality and exercising decision-making authority. Such responsibilities demonstrate the necessary discretion and independent judgment required for an exempt classification. The other options either relate to executive roles, non-exempt tasks, or general coordination without the requisite level of confidentiality and decision-making authority.

Question 3

Under the Fair Labor Standards Act (FLSA), which of the following is a primary criterion for an employee to qualify for the professional exemption from overtime requirements?

Correct Answer: Possessing advanced knowledge in a field of science or learning

The primary criterion for an employee to qualify for the professional exemption under the FLSA is possessing advanced knowledge in a field of science or learning. This demonstrates that the employee engages in complex and specialized work that requires considerable expertise. The other options relate to managerial responsibilities or routine tasks, which fall under different exemption categories or do not qualify for any exemption. Specifically, performing managerial duties with authority, supervising large teams, or engaging in clerical tasks do not meet the primary criterion for the professional exemption.

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