Wage Standards and Fair Employment Practices

Background

Policymakers at all levels of government have developed standards and guidance to ensure fair employment practices which address wages, working conditions and other aspects of work. These standards help to improve financial security.

Federal, state, and local policymakers have established minimum wage requirements for covered workers. The federal minimum wage of $7.25 per hour serves as a nationwide floor. A full-time, full-year worker earning the minimum wage makes less than $15,000 annually, not enough for a decent standard of living. The majority of states and many localities have adopted much higher minimum wages that are being phased in, with the highest at $11.50 in Washington State as of 2018.

Some analysts have promoted the idea of a living wage—the hourly wage that would be necessary for a worker to meet basic needs, such as food, housing, and medical care. That amount depends both on the worker’s location as well as household size. Workers earning a living wage can experience more financial stability and a greater ability to save for future needs.

But other employment practices can negatively affect workers’ earnings. Overbroad federal exemptions from the requirement to pay time-and-a-half wages for overtime work means that millions of white-collar workers may be unjustly losing out on wage protections.

Despite dramatic increases in labor force participation, women’s labor market outcomes continue to lag behind those of men. Women typically earn less than men and are more likely to step out of the workforce to care for children or elderly parents. As a result, women earn less over their lifetimes, and this has negative implications for retirement security.  

Predictable schedules allow workers to organize their work and personal lives. However, some employers use just-in-time scheduling. For example, they may give employees little advance notice of work schedules, change schedules at the last minute, or send people home prior to the end their assigned shift without compensation. These practices result in income volatility and make it difficult for workers to schedule shifts for additional jobs, child or adult care responsibilities, classes to upgrade their skills, and transportation arrangements.

WAGE STANDARDS AND FAIR EMPLOYMENT PRACTICES: Policy

Wage standards

In this policy: FederalState

Federal, state and local laws should strengthen protections for workers in terms of wages, hours, safety and other features of employment.

Government policies should ensure that workers’ pay and benefits are sufficient to cover essential living expenses.

AARP supports living-wage measures as a method of keeping workers’ pay commensurate with the local cost of living. Congress and the states should adjust and then index the minimum wage and overtime threshold to keep up with inflation.

Ensuring equity for women

In this policy: FederalState

Policymakers and people in the private sector should work to eliminate all barriers to women’s employment; ensure equality in employment opportunities, pay, and benefits; and improve the availability and adequacy of benefits, including pensions, in the occupations, industries, and sectors in which women are most likely to work.

Predictable schedules

In this policy: FederalState

Policymakers should require employers to provide employees with predictable schedules, including advance notice and other protections.