Local Governments Not Immune to Minimum Wage

Abstract

The San Antonio Metropolitan Transit Authority was advised in 1979 by the federal Wage and Hour Administration that its operations were not immune to the minimum‐wage and overtime provisions of the Fair Labor Standards Act (FLSA). When the authority sued, a trial court held that municipal ownership and operation of a mass transit system is a traditional governmental function and exempt from FLSA obligations. The Supreme Court of the United States ruled that there is nothing in the minimum‐wage regulations of the FLSA, as it applies to a metropolitan transit authority, that is destructive to state sovereignty. Thus, the Supreme Court reversed an earlier decision (National League of Cities v. Usery, 1976) in which it had ruled that the Commerce Clause did not empower Congress to enforce the minimum‐wage and overtime provisions of the FLSA against the state “in areas of traditional government functions.”