By the early 20th cent. many states had passed laws regulating child labor, minimum wages, and working conditions. Maryland was the first state to pass (1902) workers' compensation for employees injured on the job. The forerunner of the Dept. of Labor had been created in 1884 as a agency in the Dept. of the Interior, and in 1913 it was elevated to cabinet status with the mandate to “foster, promote, and develop the welfare of wage earners.” Congress exempted (1916) unions from the antitrust laws, and the use of injunctions in labor disputes, begun in 1877, was outlawed by Congress in 1932, although the use of injunctions was reestablished by law (1947).

Popular unrest and massive poverty during the Great Depression led to a series of landmark labor laws. The National Labor Relations Act of 1935 (the Wagner Act) established the right of workers to organize and required employers to accept collective bargaining as a ruling principle in industry. The Social Security Act of 1935 created the basis for federal unemployment insurance. The Fair Labor Standards Act, or Wages and Hours Act (1938), provided for minimum wages and overtime payments for workers in interstate commerce, thus setting standards for many basic industries.

Strong antilabor sentiment after World War II, resulted in the Taft-Hartley Labor Act, which was passed over the veto of President Truman in 1947. It made secondary boycott and closed shops illegal and gave the President the power to secure an injunction to postpone for 80 days any strike that might affect the national security. Under the act, officers of unions were required to file affidavits that they were not members of the Communist party. Later the Federal Mediation and Conciliation Service was established as an independent agency. Congressional investigations of labor-management corruption led to the passage of the Landrum-Griffin Act in 1959. It guaranteed freedom of speech and of assembly for union members, and it provided for the regular election of union officers by secret ballot and for periodic and detailed financial reports by unions.

In the 1960s increased social activism once again produced a series of landmark labor bills. The Work Hours Act of 1962 provided time-and-a-half pay for work over an 8-hour day or a 40-hour week; the Civil Rights Act (1964) prohibited discrimination on the basis of race, sex, or religion; the Age Discrimination Act in Employment (1967) protected older workers from discrimination; and the Occupational Safety and Health Act (1970) created the Occupational Safety and Health Administration and gave OSHA the power to establish workplace safety rules, inspect workplaces for safety violations, and fine companies that violated safety rules. The Employee Retirement Income Security Act of 1974 created a federal agency to insure many pension plans and established regulations to protect them from mismanagement.

In the 1980s the pendulum swung back again, producing laws and legal decisions that limited labor and the power of labor unions. Cutbacks in federal agencies reduced federal enforcement of many work safety rules; officials appointed by the Reagan and Bush administrations attempted to reduce labor regulations, arguing that they made U.S. industry less competitive in the world market. In 1990 the Supreme Court made it harder for companies to replace union workers with nonunion workers and restricted the ability of a company to use bankruptcy laws to avoid paying pensions, two management tactics that were widely used in the 1980s. By the late 1990s union membership had increased, but the number of union members in the private sector and the percentage of union workers compared to nonunion workers had fallen.