Wage Standards and Fair Employment Practices

Background

All levels of government have developed standards and guidance to ensure fair employment practices. They 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 around $15,000 annually. That is not enough for a decent standard of living. The majority of states and many localities have adopted much higher minimum wages.

Some analysts have promoted the idea of a living wage. A living wage is 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.

Other employment practices can negatively affect workers’ earnings. For example, overbroad federal exemptions from the requirement to pay time-and-a-half wages for overtime work mean 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, with negative implications for retirement security. The COVID-19 pandemic has exacerbated these disparities.

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 of their assigned shift without compensation. These practices result in income volatility. They also make it difficult for workers to organize other aspects of their lives, such as scheduling shifts for additional jobs, meeting child or adult care responsibilities, scheduling classes, or making transportation arrangements.

WAGE STANDARDS AND FAIR EMPLOYMENT PRACTICES: Policy

WAGE STANDARDS AND FAIR EMPLOYMENT PRACTICES: Policy

Wage standards

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.

Living-wage measures should be adopted 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.

Equity for women

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 in the occupations, industries, and sectors in which women are most likely to work. This should include pensions.

Predictable schedules

Policymakers should require employers to provide employees with predictable schedules. This includes advance notice of shifts and other protections.