Nov 8, 2017 in Economics

Employee Compensation

The ability of a company to adequately compensate its employees is crucial as it determines the way in which top talented employees can be attracted as well as retained. Further, a healthy compensation plan motivates the employees, thus raised productivity level. In developed countries such as the U.S., compensation of employees is significantly shaped by law as well as the taxation policies. This paper candidly examines the reasons as to why the U.S. Government should participate in the Fair Labor Standards Act (FLSA) and the Davis Bacon Act among other policies regarding employee compensation.

As indicated above, the need to ensure satisfaction of employees in work places is important as it determines output levels, hence growth of a country. The Fair Labor Standards Act (FLSA) and the Davis Bacon Act, which were established in 1938 and 1931 respectively, are statutes sets by the federal government in the U.S. guarding the rights of the employees. The FLSA, set maximum of  44-hour  seven-day workweek as well  a minimum wage, which is based on time-and-a-half'  for overtimes in particular jobs. Further, the Act prohibits employment of minors in the "oppressive child labor," (Lechner, 2005). On the other hand, Davis Bacon Act proposes that, for all construction contracts above $2,000, employees working on such sites should be paid not-less than the existing benefits and wages (Bernstein, 1983). However, of late, some politicians are seeking to get rid of these Acts, and this may have some consequences to employees. First, lack of these legislations will result to massive abuse of the rights of employees in different workplaces in the U.S. For instance, the issue of child labor in most factories will significantly be present as seen during the late 19th century in the U.S. Secondly the productivity of employees will critically be reduce as a result of working over 44-hour seven-day workweek. Consequently, as seen in companies like Wal-Mart, where employees complain of poor working conditions, low wages, and inadequate health care (Greenhouse, 2007), these forms of employee oppression may be replicated in other companies across the U.S.

Based on the above, it is evident that, the role played by the U.S. Government in enhancing employee’s satisfaction in all sectors of economy is significant. Therefore, the Fair Labor Standards Act (FLSA) and the Davis Bacon Act among other Acts which enhances employees compensation and satisfaction should be not be repealed.

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