Welcome back. In this lesson we're talking about pay compliance in the United States. And so naturally this is a very big topic. And so we're going to have a very specific plan of attack. The first thing we're going to do is offer a pay compliance in terms of its legal framework in the United States. Then we're going to give an overview of some of the main laws and the topics that they cover. And then, we're going to zoom in to one topic in particular. Those are the topics covered by the Fair Labor Standards Act. And by zooming in on that one particular piece of legislation, which is very important for compensation, we get a better feel for the way pay laws work in the United States. So without further ado, let's get to pay compliance in the legal framework. So, how does that work in the United States? Well, first of all, there are federal laws. So, for example, taking the example of the minimum wage, there's a federal minimum wage of $7.25 per hour as of January 2016 and so, that covers all of the United States. However, in some states such as California, California will have a specific higher minimum wage, that is higher than the federal statutory minimum. For example in January 2016, California state minimum wage was $9 per hour. And then moreover within some localities within California, they'll even have a higher minimum wage than that. So for example, in San Francisco, which is a very progressive city, San Francisco has $12, a minimum wage of $12.25 per hour. So let's say that you're in San Francisco and you wanted to pay a wage of $11 per hour. You said, well yeah, but the national minimum wage is lower than that. Well, you can't do that because employers have to comply with federal laws, state laws and local laws, and whichever highest one applies. And so if you look at the United States as a whole, again, there's a federal minimum wage but different states will have different laws. And so let's look back into July of 2009. In July of 2009, there were some states like California that had a minimum wage that are better or higher than the federal minimum wage. There were some states such as New York which had the same rate as the federal rate. There were some states such as Minnesota that had a minimum wage that was below the federal rate. And then there are some states that had no minimum wage legislation whatsoever. And so you might think it's strange that the states can have a minimum wage that's actually lower than the federal statutory minimum. Well in that case employers in those states would still need to comply with the minimum set by the federal government. Let's take another example from the Fair Pay Act of 1963. The Fair Pay Act of 1963 says you can't pay women less than men simply because they're women, and again that's a federal law and that applies to all states. However, there's going to be some states again, we'll take the example of California, that says not only do you have to comply with that federal law, but moreover men and women must be paid the same for substantially similar work, and this just happened in 2015. That's a higher standard than the federal law. And so there are many different ways that federal, state, and local laws can differ from each other. So we talked about minimum wage levels. Another example would be minimum wages for tipped workers. Under federal law you can pay a tipped worker, such as waiters and waitresses and bartenders and so on, a lower rate than that federal statutory minimum. And the employer, if those tips come in too low, would have to compensate workers to bring them up to another level. But this can all vary by federal and state laws. For example, some states won't have a separate lower rate for workers in tipping occupations. Another difference could be who's covered by minimum wage laws. There's certain classes of workers such as interns or others or teenagers who may not be covered by those minimum wage laws. Also they could be different in terms of the non discrimination protections. We saw the example of California versus the federal government for example. And there's also several others so for example whether short breaks are acquired, also whether long breaks would need to be paid. How often employers need to pay their workers? What the requirements are for paid family leave and so on? And so we'll go over some examples of how those laws vary by state in our next video. Thanks and I'll see you soon.
