FAIR LABOR STANDARDS AMENDMENTS OF 1989
The Department of Labor administers and enforces the Fair Labor
Standards Act (FLSA) through the Wage and Hour Division of the
Employment Standards Administration. The FLSA requires that most
employees in the United States be paid a minimum hourly wage and
overtime premium pay after 40 hours in a work-week. On November 17,
1989, the Fair Labor Standards Amendments of 1989 (Public Law 101-
157) were enacted. These amendments change certain provisions of
FSLA with respect to coverage, minimum wage, exemptions, tip credit,
and include a new training wage provision. The amendments are
The statutory minimum wage increased to $3.80 an hour on April 1,
1990, and will increase to $4.25 an hour on April 1, 1991.
The minimum wage and overtime pay provisions apply to all employees
of certain "enterprises" that are engaged in interstate commerce,
produce goods for interstate commerce, or handle, sell or work on
goods or materials that have been moved in or produced for interstate
commerce. Effective April 1, 1990, the annual dollar volume test for
enterprise coverage is raised from $250,000 ($362,500 for retail
firms) to $500,000, except for hospitals, institutions primarily
engaged in the care of the sick, the aged, the mentally ill or
defective who reside on the premises of such institutions, schools
for mentally or physically handicapped or gifted children preschools,
elementary or secondary schools, institution of higher educa- tion,
and public agencies. These latter enterprises are covered under FLSA
regardless of their annual dollar volume. Construction and
laundry/dry cleaning enterprises, which previously were subject to
enterprise coverage irrespective of their annual dollar volume of
business, become subject to the $500,000 test.
The minimum wage and overtime pay exemptions for small retail
establishments are repealed. Thus, employees of these
establishments, as well as laundry/dry cleaning enterprises,
construction enterprises, and other non-retail enterprises having
annual dollar volumes of less than $500,000 become subject to the
provisions of FLSA insofar as they are individually engaged in
commerce or the production of goods for commerce or a closely related
and directly essential activity in any workweek. Such employees
include those who: work in communications or transportation;
regularly use the mails, telephones, or telegraph for interstate
communication or keep records of interstate transactions; handle,
ship, or receive goods moving in interstate commerce; regularly cross
state lines in the course of employment; or work for independent
employers who contract to do clerical, custodial, maintenance, or
other work for firms engaged in interstate commerce or in the
production of goods for interstate commerce.
FLSA coverage is extended to employees of the U.S. House of
Representatives and the Architect of the Capitol.
Any enterprise that ceases to be covered by virtue of the increase in
the enterprise coverage dollar volume test must continue to pay its
employees not less than $3.35 an hour, and continues to be subject to
the overtime pay and child labor provisions of FLSA.
Effective April 1, 1990, a $1.71 per hour tip credit may be taken for
tipped employees (45% of $3.80) and this increases to $2.13 per hour
(50% of $4.25) beginning April 1, 1991.
Under certain conditions, employers may pay a training wage of at
least 85% of the minimum wage for up to 90 days to employees under
age 20, except for migrant or seasonal agricultural workers and for
H-2A nonimmigrant aliens performing agricultural work of a temporary
or seasonal nature. An employee who has been paid at the training
wage for 90 days can be employed for 90 additional days by a
different employers, if that employer provides on-the-job training in
accordance with regulations to be issued by the Secretary of Labor.
Employers are prohibited from displacing regular employees in order
to hire employees eligible for the training wage, and there is a
limitation on the proportion of an employer's workforce which may
receive the training wage.
The training wage provision expires March 31, 1993.
Employers may employ employees who lack a high school diploma, or who
have not attained the educational level of the 8th grade, for up to
10 hours over 40 in a workweek without paying overtime if the
employees are provided with remedial reading or other basic skills
during such hours. The training must not be job specific. This
provision is effective immediately.
Special provisions apply to Puerto Rico. The mainland increases in
the minimum wage will be phased in, industry by industry. All
industries must reach the mainland minimum wage levels by April 1,
Civil Money Penalties
The Secretary may assess civil money penalties of up to $1,000 per
violation against employers who willfully or repeatedly violate the
minimum wage or overtime pay requirements.
For Additional Information
Get in touch with the nearest office of the Wage and Hour Division,
listed in most telephone directories under U.S. Government,
Department of Labor.
This is one of a series of fact sheets highlighting U.S. Department
of Labor Programs. It is intended as a general description only and
does not carry the force of legal opinion.
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