Federal Labor Policy: Minimum Wage, Workplace Safety, and Collective Bargaining

Federal labor law establishes minimum standards for wages, hours, workplace safety, and labor-management relations. The principal statutes include the Fair Labor Standards Act of 1938, which establishes the federal minimum wage, overtime pay requirements, child labor restrictions, and recordkeeping obligations; the Occupational Safety and Health Act of 1970, which requires employers to provide workplaces free from recognized hazards and authorizes OSHA to promulgate and enforce workplace safety and health standards; and the National Labor Relations Act of 1935, which protects employees' rights to organize, bargain collectively, and engage in concerted activity.

The FMLA of 1993 provides eligible employees with up to 12 weeks of unpaid, job-protected leave for specified family and medical reasons. Unlike most peer nations, the United States does not mandate paid family or medical leave at the federal level, though several states have enacted paid leave programs. The Worker Adjustment and Retraining Notification Act (WARN Act) requires employers with 100 or more employees to provide 60 days' advance notice of plant closings and mass layoffs.

The FLSA applies to employees of enterprises engaged in interstate commerce with annual gross sales of at least $500,000 and to employees of certain institutions regardless of sales volume. Covered nonexempt employees must be paid at least the federal minimum wage and time-and-a-half for hours worked over 40 in a workweek. Exemptions apply to executive, administrative, professional, computer, and outside sales employees meeting specific salary and duties tests. The DOL updated the salary threshold for the white-collar exemptions in 2024, though the update faced legal challenges.

The NLRA grants employees the right to form, join, and assist labor organizations; bargain collectively through representatives of their choosing; and engage in other concerted activities for mutual aid and protection. The NLRB administers representation elections and adjudicates unfair labor practice charges against employers and unions. Recent NLRB decisions have addressed issues including joint employer liability, the scope of protected concerted activity, and the board's authority to order bargaining without an election when employer unfair labor practices have undermined the election process.

Major legislative proposals include the Raise the Wage Act, which would incrementally increase the federal minimum wage to $17 per hour and phase out the subminimum wage for tipped employees; the Protecting the Right to Organize (PRO) Act, which would strengthen penalties for unfair labor practices, override state right-to-work laws, and expand the definition of employee; and proposals for federal paid family and medical leave programs funded through payroll taxes or general revenues.

Other policy options include updating OSHA's penalty structure to enhance deterrence, establishing a federal standard for workplace heat exposure, addressing worker safety in the gig economy, creating portable benefits systems for nontraditional workers, strengthening enforcement against wage theft and worker misclassification, and expanding apprenticeship and workforce training programs to address skills gaps in emerging industries.

The Department of Labor issued a final rule in 2024 revising the test for determining whether a worker is an employee or independent contractor under the FLSA, returning to a multifactor economic reality test. NLRB activity has included significant decisions on joint employer standards, election procedures, and remedies for unfair labor practices. High-profile organizing campaigns at major employers have drawn public attention to labor issues. Congressional debate continues over minimum wage increases, paid leave proposals, and the appropriate balance between worker protections and employer flexibility.