pay in the united states is governed by a number of laws at both the federal and state levels, including rules that govern equal employment opportunity and the fair labor standards act (flsa). it is illegal to discriminate on the basis of race, sex, or other protected categories in employment practices, including pay. the 1938 flsa established the minimum wage, requirements for overtime pay, and employment of minors. the flsa established a federal minimum wage, although some exceptions apply for training wages. as of 2020, the federal minimum wage is $7.25 per hour, though many states in the country have established higher hourly rates for their minimum wage. the flsa also established overtime pay for nonexempt workers who work more than 40 hours per week with detailed compensation that includes bonuses and piece-rate payments. those employees who do not earn overtime pay are considered exempt employees, and they are usually in executive and professional white-collar jobs. flsa rules also govern employment of child labor, outlining requirements for those from ages 14 through 18. this activity is important because it highlights the differences between pay for exempt and nonexempt employees. the goal of this activity is to match legal requirements with the associated pay policy.