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Fair Labor Standards Act, DEI, and Inflation in the State of Florida

Barry University

Pub 499 - Public Administration Capstone Project

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FAIR LABOR STANDARDS ACT, DIVERSITY, AND INFLATION 4

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FAIR LABOR STANDARDS ACT, DIVERSITY, AND INFLATION

Table of Contents

Executive Review 4

Introduction 4

Fair Labor Standards Act of 1938 4

Equal Employment Opportunity Commission (EEOC) 5

Diversity 5

Inclusion 6

Equity 6

Discrimination 6

Overview /Summary of the Issue 6

Literature Review 7

Minimum W age 7

Hours and W age s 7

Overtime 7

E qual P ay A ct 8

Summary of the Literature Review 9

Literature Review Problem s 9

Long-run determinants of U . S . racial inequality: the FLSA 9

Federal Minimum W age in Florida 9

Cost of Living and Minimum Wage Nationally 10

Damages and I nsurance C osts 12

Diversity and Inclusion 12

Union Issues 14

Lilly Ledbetter Fair Pay Act 15

Supreme Court Cases 15

National Railroad Passenger Corporation v. Morgan 15

North Carolina Agricultural Extension Service 16

Summary of the Literature Review Problem 16

Recommendations 17

Conclusion 17

References 19

Executive Review

This paper discusses the Fair Labor Standards Act of 1938, what diversity and inconclusion are, and inflation on the United States and Florida citizens. The first part briefly defines FLSA and how it protects minimum wages, a standard workweek, overtime, and recordkeeping for public servants. Equal Pay Act demands that men and women working at the same place be equally paid for the same work. Additionally, the paper identifies what diversity and inclusion in the workplace mean to an organization that employs a diverse team of people reflective of the society in which it operates. It speaks to the many cases that the Supreme court ruled on. Finally, the Equal Employment Opportunity Commission (EEOC) plays a role in defending numerous allegations of harassment, discrimination, and lawsuits filed with organizations that discriminate. This capstone study aims to identify the impact of FLSA and its many amendment laws and the effects on the public and private sector workplace.

Introduction

Fair Labor Standards Act of 1938

President Roosevelt signed the Fair Labor Standards Act of 1938 to protect workers in the private and public sectors because of "substandard wages and excessive worked hours, which endangered the national health," as Robin Potter (2005) asserts in the Illinois Public Employee Relations Report (p. 1). This Act established minimum wage, a standard workweek, overtime, and recordkeeping, and prohibited tyrannical child labor. The Act was promoted by Secretary of Labor Frances Perkins, the National Child Labor Committee, and Sidney Hillman, a union leader for unemployment insurance, low-cost housing, the five-day week, and minimum wages.

The Equal Pay Act of 1963

The Equal Pay Act of 1963, which is an amended part of the Fair Labor Standards Act of 1938, is enforced by the EEOC and “prohibits sex-based wage discrimination between men and women in the same establishment who perform jobs that require substantially equal skill, effort and responsibility under similar working conditions” (U.S. Equal Employment Opportunity Commission, n.d.). All compensation includes salary but is not limited to overtime, bonuses, benefits, vacation and holiday pay, gas allowances, and reimbursement for travel expenses, including hotel and benefits.

Equal Employment Opportunity Commission (EEOC)

The Equal Employment Opportunity Commission (EEOC) enforces federal laws that make it illegal to discriminate against a potential job applicant or an employee because of race, color, religion, and sex. The EEOC provides three basic guidelines for employees: do not discriminate, report discrimination, and petition workplace changes. This commission was created by the Civil Rights Act of 1964 and was founded to enforce Title VII (prohibiting discrimination in employment).

Diversity

Diversity in the workplace means an organization employs a diverse team of people reflective of the society in which it operates. It is common in all facets of life, from culture, workplace, politics, education, and environment. According to Marks (2012), "diversity is a word that is used differently depending on the context.

Four types of diversity exist: external, internal, organizational, and worldview. External diversity is described as a person's characteristics at birth. (Socioeconomics, life experiences, education, and personal interests). Internal diversity is related to race, age, gender, and national origin). Organizational diversity relates to the differences between individuals assigned to an organization's characteristics to distinguish one from another (Job functions, type of pay, and seniority). Worldview diversity is multiple factors from all three previous views: external, internal, and organizational diversity.

Inclusion

Inclusion in the workplace is all about understanding and respect. Diversity is the quality or state of having many different forms, types, and ideas; people of other races or who have different cultures in a group or organization.

Equity

Equity in the workplace means ensuring that processes and programs are impartial, fair, and equal outcomes for every individual. Equity is the quality of being honest and unbiased and providing a fair workplace for all employees based on their "different" individual needs. Equity gives the same opportunities to all, not just a select group, because of privilege.

Discrimination

Discrimination is an unjust or prejudicial treatment of different categories of people or things, especially on race, age, or sex. Prejudice and prejudgment are discrimination that affects individuals in their social group. Discrimination occurs when actions and biases are thought on and acted on. Marks (2020) stated, "the actions taken in response to those inner thoughts, however, often result in discrimination" (p. 13).

Overview /Summary of the Issue

It is understood that a portion of the Fair Labor Standard Act encompasses diversity and equity and how the similarities in how both assist public sector employees in the workplace. Understanding how the Equal Employment Opportunity Commission (EEOC) enforces federal laws that make it illegal to discriminate against a potential job applicant or an employee because of race, color, religion, and sex.

Literature Review

Minimum Wage

The minimum wage, a subarea of the FLSA, requires that most employees are paid at least the federal minimum for all hours worked in the United States. Many states also have minimum wage laws, and an employee is subject to state and federal minimum wage laws; when this occurs, an employee is entitled to the higher of the two minimum wages. Florida's minimum wage is adjusted annually based on a set formula, which is $10 per hour. The revised minimum wage for covered nonexempt workers is not less than $7.25 per hour, effective July 24, 2009 (1938 - 2009. U.S. DEPARTMENT OF LABOR, n.d.). Although the minimum wage has been increased, it did not happen without much controversy.

Hours and Wages

Wage and hour compliance laws require awareness of many different federal, state, and local statutes to interest decisions by the courts. The focus is on issues that are frequently litigated. According to In Wage and hour law, this is an overview of the FLSA and its associated regulations, along with wage and hour lawsuits that are brought as class action suits (Hanvey & White, 2018). Exempt employees receive pay at one-and-one-half times their regular rate for 40 hours per workweek.

Overtime

The Overtime Initiative was created to overhaul the previous FLSA law governing employee overtime benefits. There are many cases and as in Overtime Wages and the Suffer or Permit to Work, Potter (2005) spoke about multiple lawsuits against companies for wage and working exploitations. Bell v. Farmers Insurance, insurance adjusters, were being denied overtime. Another case was Mynaf v. Taco Bell Corporation for “misclassifying executives to avoid paying for overtime compensation” (p.2). There are multiple infractions by other corporations and government agencies against overtime wages earned by employees.

Being overworked and underpaid is abusive to the rights of any employee concerning hourly wage and pay rate for hours worked over 40 hours per week. Overtime pay encompasses an hourly rate, piece rate, and salary. Any employee working over 40 hours is entitled to their hourly rate plus half of the hourly rate for overtime. The article states, “the workweeks are 24 hours, fixed at a recurrence of 168 hours and start any day of the week” (Dept of Labor, 2022). The public and private sectors must compensate for hours worked.

Equal Pay Act

After the passage of the Equal Pay Act (EPA), women still are not earning the same as men. The current salary has been argued as a basis for a new job offer, and it propagates the kinds of salary discrepancies that the EPA attempted to eliminate. “As a result, many municipalities have passed laws which prohibit inquiries about an applicant’s current salary and their limitations and offer alternative strategies to close the pay gap between genders” (U.S. Equal Employment Opportunity Commission, n.d.).

According to Bell (2012), her take on discrimination is interesting:

Employment or labor market discrimination occurs when personal characteristics of applicants and workers that are unrelated to productivity are valued in the labor market. Access discrimination occurs when people are denied employment opportunities, or "access" to jobs. Treatment discrimination occurs when people are employed but are treated differently once employed, receiving fewer job-related rewards, resources, or opportunities than they should receive based on job-related criteria (p.4).

Summary of the Literature Review

As the author stated in the readings, there has always been controversy about raising the minimum wage, and presidents and Congress have created laws to approve raising the minimum wage over the decades. Laws have been passed to protect workers’ pay dealing with race and gender issues. Wages, overtime, and being overworked and underpaid were addressed by the FLSA and amended laws after that. The Equal Pay Act forged the way to ensure that women earned the same as their counterparts in the workplace.

Literature Review Problems

Long-run determinants of U.S. racial inequality: the FLSA

Racial and economic divides were an everyday occurrence in American society, and the past years have witnessed crucial decades of inequality. The Great Migration changed blacks' geography for upward mobility in the early 1900s. In the Long-run Determinants of Us Racial Inequality: Evidence from the Great Migration and the FLSA (2019), the text reads that “the federal minimum wage policy in the sharp decline of racial earnings gaps during the Civil Rights Era and the 1966 Fair Labor Standards Act extended federal minimum wage coverage to retail, services, agriculture, and other sectors where black workers were overrepresented.” (Derenoncourt, 28235645).

Federal Minimum Wage in Florida

The controversial argument over raising the minimum wage could benefit the impoverished. The other side contends that raising the minimum wage would increase the cost of labor and decrease the demand for that labor. According to stats in Contract and employment law, "in 2009, the Federal Government Accountability Office found that the Labor Department's Wage and Hour Division is failing in its role of "enforcing minimum wage, overtime, and many other labor laws" (Sanchez, 2021, p. 165).

In Obama’s reign as president, Sanchez (2021) contends:

The Department of Labor recovered more than $82 million in back wages for almost 107,000 minimum-wage workers. On July 24, 2009, the federal minimum wage increased from $6.55 to $7.25 per hour. Owing to the "Great Recession” in 2009, the average workweek shrank to hours-the shortest ever recorded. Wages have fallen each month since October 2008, a total of 5 percent over the past eight months. Two surveys found employers have increased salaries in 2009 by the smallest percentage in decades. Florida alone has seen the personal income of state residents decline for nine months-the longest in sixty-one years. Florida recorded a 0.9 percent fall in personal income in the first quarter of 2009, compared with the fourth quarter of 2008. (Sanchez, 2021, p. 165)

Florida had the most significant decline in the first quarter. Sanchez (2021) explains, "One report ranks South Florida No. 85 among the nation's 100 largest metropolitan areas in economic performance, as of March 2009, based on employment, unemployment rates, wages, gross metropolitan product, housing prices, and foreclosure rates (p. 166). An initiative to reach a $15 minimum wage is happening yearly in $1 increments through 2026.

Cost of Living and Minimum Wage Nationally

Congress first set a minimum wage for many classes of workers at 25 cents an hour back in 1938 (Johnson, 2014, p.152). The minimum wage was brought about in response to the abuse of workers by private and federal public employees resulting in dilapidated wages. The earliest programs originated outside the United States and can be dated as far back as the thirteenth century in England (Nordlund, 1997). There have been twenty-two increases until this date.

The outcry from many lower-income workers and activists claims that this wage is far below any fair wages. According to a CNBC report before the Florida State minimum wage increase:

"Nationally, the one-bedroom housing wage is $20.40, and the two-bedroom housing wage is $24.90. The minimum wage workers cannot afford rent in any state in the U.S. NLIHC reports that Florida's two-bedroom housing wage is $24.82, and the average renter wage is $17.69. The report states that there are 2,677,470 renter households in Florida. About 35% of the state rents. The state's minimum wage of $8.65 makes working 93 hours a week to earn enough to rent a one-bedroom rental home at Fair Market Value, 2.3 full-time jobs" ( Florida Housing Data Clearinghouse, 2022)

These numbers changed because of the rising inflation to 8.6% last month. Inflation combined with low wages is a disastrous mix.

However, the minimum wage has not increased. Conservative economists argue that a wage rise could "result in a surge in the costs of goods and services employment because some companies will lay off" (Johnson, 2014, p.153). In comparison, liberal politicians argue that workers cannot sustain a profitable living on a fundamental level.

"One study found that while Americans whose parents' income was in the bottom fifth managed to rise to the top fifth income bracket about 8% of the time, we optimistically believe there is a 12% chance. In Canada, the actual chance of rising from the very bottom to the very top is about 13.5%" (Kim, 2020, para.5). Sometimes, earning the minimum wage encourages workers to have particularly low productivity. Wage growth is affected, and "research also says that low minimum wage may not affect poverty" (Belman et al., 2014, p.336). Most workers that start on minimum wage obtain higher wage-paying jobs.

Hence, Belman et al. (2014) conclude, "employment effects are too modest to have meaningful consequences for public policy in the dynamically changing U.S. labor market"; the wages of those earning slightly more are diverse. The minimum wage is seen as a set of policy tools aimed at cultivating the impoverished standard of living, and reasonable minimum wage increases would likely assist low-income workers and families.

Damages and Insurance Costs

Compensatory and punitive damages would be recoverable under the FLSA, with the amended Equal Pay Act so that it would be hard for employers to use the bona fide factor defense in court. In the text, "the City of Fort Lauderdale plans to cut overtime pay to its police officers from $6.1 million in 2009 to less than $2 million in the future" (Sanchez, 2021, p. 166). Many people working on the commission would file lawsuits on overpay issues and minimum-wage violations as the economy fails. Moreover, "Premiums for health insurance rose 5 percent in 2008 and have more than doubled since 1999, a growth rate that far exceeds inflation and the slow rise in workers' wages in the same period in Fort Lauderdale" (Sanchez, 2021, p. 172).

Diversity and Inclusion

Politicians use the term "diverse voters" to refer to people of color who vote. Within schools, "diverse students" can refer to race, but more often refers to the socioeconomic status of families in a district" (p. 2). Everyone has multiple labels and badges to describe and inform people of who they are. This makes each one of us diversified and different. These differences often cause others who are different from one another to be afraid and cause them to stereotype and assume the worst in another group of people.

Prejudice and prejudgment are discrimination that affects individuals in their social group. Discrimination occurs when actions and biases are thought on and acted on. Marks (2020) stated, "the actions taken in response to those inner thoughts, however, often result in discrimination" (p. 13). Empathy for others and communication help to close the gap between each one of us.

The Equal Employment Opportunity Commission (EEOC) defends numerous allegations of harassment, discrimination, and lawsuits filed against organizations that discriminate. Several vital laws and executive orders related to diversity in organizations have been created to provide rules on protection and equity to all workers. As Bell (2012) contends in the text:

Most employers, labor unions, and employment agencies are forbidden to discriminate on the basis of those factors in hiring and firing; compensation, assignment, or classification of employees; transfer, promotion, layoff, or recall; job advertisements; recruitment; testing; use of company facilities; training and apprenticeship programs; fringe benefits; pay, retirement plans, and disability leave; or other terms and conditions of employment. Also prohibited are harassment on the basis of one's demographic group memberships, employment decisions based on stereotypes about ability because of such group memberships, and retaliation for filing a claim of discrimination or complaining about it or marriage to or affiliation with individuals of a particular group" (p. 66).

These are major federal acts and executive orders regarding diversity issues and their provisions: The first act of equity started with the Emancipation Proclamation (1863), which freed enslaved people from forced labor. There were two executive orders in the long wait for more affirmative action: EO 8802 (1941) gives equal employment to all races, and Executive Orders for Affirmative Action of 1965 and 1966 step up to prevent discrimination in the workplace, including women of color. The Equal Pay Act of 1963 affords women and men to be paid equally for equal work. Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex, or national origin in employment-related matters.

Union Issues

Moreover, the Civil Service Reform Act of 1978 gave Federal administrators the flexibility to improve public sector operations and productivity while protecting employees from unfair or unwarranted practices. President Bush, 2008 signed an executive order to rule out collective bargaining rights for public sector employees "who work in law enforcement, intelligence and other agencies" tied to national security (Sanchez, 2021, p. 183). A federal court in Florida ruled that a public union did not violate its duty of fair representation by refusing to represent an employee dismissed "for false worker's compensation claims."

The Merit System Principles (MSPs) were established to protect federal employees and applicants prohibited personal practices (PPPs). The law abolished the US Civil Service Commission and distributed its functions to three newly created agencies: (1) The Office of Personnel Management (OPM); (2) The Merit Systems Protection Board (MSPB); and (3) The Federal Labor Relations Authority (FLRA). CSRA is codified in scattered sections of Title 5 (Sanchez, 2021, p. 184).

Lilly Ledbetter Fair Pay Act

Signed by President Obama on January 29, 2009, this law overturned the Supreme Court's decision to restrict the time for filing complaints of employment discrimination. Because of the Supreme Court's ruling in Ledbetter v. Goodyear Tire & Rubber Co., a law called the Lilly Ledbetter Fair Pay Act was enacted, making a deadline for filing when an employee received unequal pay with the Fair Pay Restoration Act. As Contract and Employment Law wrote, "South Florida labor lawyer says until women make different choices, their incomes will not rise, no matter how many bills are signed into law. By choices, he is talking about the careers they pursue, the hours they work, the jobs within their industries they hold, and the parenting decisions they make" (Sanchez, 2021, p. 168) .

Supreme Court Cases

Ledbetter had filed a Title VII claiming the performance evaluations were gender discrimination. The Lilly Ledbetter Fair Pay Act, the written text excerpts:

Title VII of the Civil Rights Act of 1964 prohibits employers with 15 or more employees to not discriminate on the basis of race, color, religion, gender and national origin; and gender difference in compensation are prohibited. In order to file a TVII claim in a timely way, the employee is required to file a complaint with the Equal Employment Opportunity Commission within 180 or 300 days depending upon the state. Failure to file in a timely way will bar the employee from litigating the issue (Roach, 2010, para. 2) .

National Railroad Passenger Corporation v. Morgan

Judge Alito stressed that the discrimination claim was filed on time and must focus on employment practices. A similar case with the same issue is the case of the National Railroad Passenger Corporation v. Morgan. Her pay was lower than her male counterparts, and there was a denial of a pay increase. Multiple cases were seen by the supreme court to validate lawsuits in pay because of discrimination.

North Carolina Agricultural Extension Service

The North Carolina Agricultural Extension Service segregated employees into "white" and "negro” branches. The "negro” branch received less money than the "white" branch. Title VII was amended to protect public employees in 1965. Employees started filing suits against the company and citing lower race pay. The appellate courts rejected the employee's claims. Justice Brennan states: "The error of the Court of Appeals concerning salary disparities created prior to 1972 and perpetuated after that is too obvious to warrant extended discussion: that the Extension Service discriminated concerning salaries prior to the time it was covered by Title VII does not excuse perpetuating that discrimination after the Extension Service became covered by Title VII" (Roach, 2010, para. 3).

Lilly Ledbetter’s misinterpretation of the Bazemore case was used against her because it was actual and not a current paycheck issue. The discrimination was in her lower performance appraisal, which resulted in lower pay in her check. In the Bazemore case, there was a differential in pay because of color and not performance. Roach (2010) explains that “Paying black and white workers differently were made prior to the time that Title VII became law (Roach, 2010, para. 4). The Supreme Court stated time to file the charges was 180 days, not the 180 days after a layoff had been decided on. The amending of Title VII33 includes the creation of a discriminatory system. (Roach, 2010, para. 4).

Summary of the Literature Review Problem

Florida is where most come to retire, but the low pay and high living costs make it hard for families to thrive in the state. The EEOC has enforced the law and ensured that companies who did not comply are brought to justice. Without any diversity in the workplace, it would make work conditions unbearable.

Recommendations

Recommendations for improving diversity include actively recruiting eligible people from diverse backgrounds; all employees show equal opportunities and upward mobility. Management should be held accountable for diversifying staff and promoting equitable pay. Having diversified public servants like the communities they serve makes the government look more effective and concerned about the public. Holding firm on upholding the laws that protect pay for gender and race discrimination in the workplace.

Creating job descriptions that attract, not deter, presentive applicants. Paying attention to the processes that create barriers to entry and promotion, adopting an asset-based perspective, and building a solid strategy for recruitment and retention while validating minimum qualifications for examinations to equality for all applicants. Being diverse in planning and executing new policies and holding upper management accountable must be prioritized. Pay that rises with inflation.

Conclusion

Today, public and private sector workforces in the United States look very different from decades ago. The minimum wage law is imperative in addressing labor laws equity. The cost of living is increasing; the current low minimum wage amount is not enough and is not viable for the average working American and their families.

Moreover, Americans have always fantasized about a concept known as "The American Dream." In a society where checks and balances barely exist, one would consider themselves safe from the manipulative and unethical practices that are collectively identified within major corrupt systems when it is believed to be under the supervision of an American government. To be exempt from the allegations of corruption and economic malpractice, the masses employed under such a system are improperly compensated relative to their position and work ethic. When the availability of equitable positions has slowly been diminishing due to the automatization of consumer commodities, law-abiding citizens naturally expect the bartering of their services in exchange for financial reassurance to ensure a profitable living. This proposed narrative differs radically from how the government has provided financial compensation to its mid to low-income workers. If the minimum wage is increased, it will only be in small increments, and soon automation will have overtaken our lives, and it will not matter.

Diversity is a valuable tool against overt discrimination in the workplace and sociality. Diversity matters because it shows that everyone can be different in physicality, locality, and nationality, but they are all unique. Diversity brings benefits to organizations. Increasing the number of young and older women and various ethnicities prevent bias and discrimination. When there are equitable opportunities, it increases diversity and creativity in the workplace. With all legislations and laws in place, there have been many strides for equity and inclusion in federal agencies and local government workplaces. Government agencies can be successful if the organization continues to train coming staff and deliver continuous training to current staff.

References

1938 - 2009. U.S. DEPARTMENT OF LABOR. (n.d.). History of Federal Minimum Wage Rates Under the Fair Labor Standards Act. https://www.dol.gov/agencies/whd/overtime

Bell, M. P. (2012). Diversity in organizations (002nd ed.). Cengage Learning.

Belman, D., & Wolfson, P. (2014). What does the minimum wage do? W E Upjohn Inst for.

Derenoncourt, E. (28235645). Long-run determinants of us racial inequality: Evidence from the great migration and the flsa [Doctoral dissertation, Harvard University ProQuest Dissertations Publishing,  2019]. ProQuest. https://www.proquest.com/openview/786291cb21997ade59b3c8daa2937737/1?pq-origsite=gscholar%26cbl=44156

Hanvey, C., & White, J. (2018). Wage and hour legal context. In Wage and hour law (pp. 1–17). Springer International Publishing. https://doi.org/10.1007/978-3-319-74612-8_1

Johnson, W. C. (2014). Public administration: Partnerships in public service, fifth edition (5th ed.). Waveland Press, Inc.

Jones, C. (2020). WAGES AND COMPENSATION. Retrieved August 2, 2022, from https://doi.org/https://scholar.google.com/scholar?q=related:TMnhbjVNyRwJ:scholar.google.com/&scioq=how+does+flsa+protect+employees+from+inflation&hl=en&as_sdt=0,10

Marks, M. J., & DeWitt, S. (2020). Teaching about diversity: Activities to start the conversation (hc) (social issues in education). Information Age Publishing.

Mello, J. A. (2019). Why the equal pay act and laws which prohibit salary inquiries of job applicants can not adequately address gender-based pay inequity. SAGE Open, 9(3), 215824401986910. https://doi.org/10.1177/2158244019869106

Nordlund, W. (1997). The quest for a living wage: The history of the federal minimum wage program (contributions in labor studies) (1st ed ed.). Praeger.

Potter, R. (2005). Overtime wages and the suffer or permit to work standard under the fair labor standards act. Illinois Public Employee Relations Report, 1-7(2), 22. https://doi.org/10.2307/1117779

Roach, B. L. (2010). The lilly ledbetter fair pay act: paving the way for equal pay claims. Journal of Academic Perspectives, 1(2).

Sanchez, J. (2021). Contract and employment law. In Public relations law (p. 34, 151). Nova L. https://doi.org/10.4324/9780203877135-11

U.S. Equal Employment Opportunity Commission. (n.d.). The equal pay act of 1963. US EEOC. Retrieved August 6, 2022, from https://www.eeoc.gov/statutes/equal-pay-act-1963