Examining the Underpinnings of Labor Standards Compliance in Low Wage Industries

This study examines the relationship between compliance with the Fair Labor Standards Act, the federal law regulating basic labor standards including the minimum wage, overtime, and child labor for the workforce and a set of business practices found in low wage industries: branding, franchising, and third-party management contracting. Through a study of two industries that draw on these practices—the limited service segment of the eating and drinking sector (“fast food”) and the hotel / motel industry—we find that these practices have significant effects on workplace compliance with labor standards.