On this page you will read detailed information about Fair Labor Standards Act 1938.
As an employer, you have a responsibility to understand the requirements of the Fair Labor Standards Act. This seminal labor law establishes standards for minimum wage, overtime pay, recordkeeping, and child labor. By educating yourself on the provisions of the FLSA, you can ensure your business complies with federal wage and hour regulations. Adherence demonstrates respect for your employees and reduces exposure to costly litigation. This article provides an overview of the key components of the law and practical guidance for implementation. With 100 words allotted, a concise and focused introduction sets the stage for an exploration of this essential employment statute. Understanding the intricacies of the FLSA allows you to create a compliant workplace that values your staff.
What Is the Fair Labor Standards Act?
The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, record-keeping, and youth employment standards for employees in the private sector and in federal, state, and local governments. It was enacted in 1938 to provide basic protections for workers.
Sets Minimum Wage and Overtime Standards
The FLSA establishes a federal minimum wage for covered employees and ensures that they receive overtime pay of at least one and one-half times their regular rate of pay for hours worked over 40 in a workweek. The minimum wage and overtime provisions apply to employees in the private sector as well as to most federal, state, and local government employees.
Requires Accurate Record Keeping
The FLSA requires employers to keep records on employees and their wages, hours, and other conditions of employment. Employers must keep records for certain periods of time and make them available for inspection by the U.S. Department of Labor’s Wage and Hour Division. Accurate record keeping is essential to determine compliance with the FLSA and to ensure employees receive proper payment for all hours worked.
Prohibits Oppressive Child Labor
The FLSA establishes restrictions on employment of minors to ensure that work does not jeopardize their health, well-being, and opportunities for education. It sets the minimum age for employment, limits the times of day and number of hours minors can work, and prohibits hazardous occupations for minors.FLSA’s child labor provisions are designed to protect the educational opportunities of youth and prohibit their employment in jobs that are detrimental to their health and safety.
Provides Enforcement Mechanisms
The FLSA authorizes the U.S. Department of Labor to investigate and enforce the law, including conducting compliance reviews and bringing court actions for unpaid minimum wages and/or overtime. The FLSA also allows employees to file private lawsuits to recover back wages.
In summary, the Fair Labor Standards Act establishes wage and hour protections for workers to ensure fair working conditions and adequate compensation in the U.S. labor market. It remains the principal federal law regulating wages and hours of employees in the private sector and in federal, state, and local governments.
Who Is Covered Under the FLSA?
The Fair Labor Standards Act (FLSA) applies to most employees in the United States. However, there are some exceptions. The FLSA covers both full-time and part-time workers, with some exemptions for seasonal employees, independent contractors, volunteers, and certain agricultural employees.
In the previous post, we had shared information about Family Medical Leave Act (FMLA) Eligibility and Usage Rules, so read that post also
Non-Exempt Employees
Most hourly employees are considered non-exempt under the FLSA and are therefore entitled to minimum wage and overtime pay. This includes most workers in the retail, food service, and manufacturing sectors. Non-exempt employees must be paid at least the federal minimum wage for all hours worked and 1.5 times their regular rate of pay for all hours worked over 40 in a workweek.
Exempt Employees
Salaried executive, administrative, and professional employees earning a minimum of $684* per week are typically exempt from the FLSA’s overtime rules, although they are still subject to the minimum wage provision. Job titles alone do not determine exempt status. Rather, an employee’s specific job duties and compensation must meet certain requirements. Teachers, academic administrative personnel, and highly compensated employees earning $107,432* per year or more may also be exempt.
Independent Contractors
Independent contractors such as freelance writers, graphic designers, and consultants are not covered by the FLSA. These individuals are self-employed, so they do not receive employee benefits or protections. Companies hiring independent contractors should be careful to properly classify these workers, as misclassification can result in penalties. The key factor in determining a worker’s status is the degree of control the company exerts over the worker.
In summary, the FLSA covers most employees in the U.S but exempts certain workers, including some salaried professionals, seasonal employees, independent contractors, volunteers, and agricultural workers. Employers should take care to properly classify workers and comply with the law to avoid violations. Staying up to date with the FLSA’s requirements and exemptions is key to ensuring compliance.
*Note: Salary thresholds are updated periodically. Dollar amounts given were current as of January 2020.
Minimum Wage Provisions in the FLSA
The FLSA establishes a federal minimum wage for covered, non-exempt employees. As of 2021, the federal minimum wage is $7.25 per hour. However, some states have higher minimum wages—employers must pay the higher of the federal or state minimum wage. Employees can be exempt from the minimum wage requirement if they meet certain criteria, such as executive, administrative or professional exemptions.
Coverage
The minimum wage provisions apply to all employees of covered enterprises engaged in interstate commerce or the production of goods for interstate commerce. This includes most employees in the private sector as well as employees of the federal government. Some exceptions apply, including tipped employees, certain full-time students, and workers with disabilities.
Overtime Pay
The FLSA requires that covered, non-exempt employees be paid at least one and one-half times their regular rate of pay for all hours worked over 40 in a workweek. The overtime pay requirement applies to hours actually worked, not paid time off. Only actual hours worked in a given workweek can be counted towards the 40 hours. Some exceptions apply, including employees engaged in fire protection or law enforcement activities.
Recordkeeping
Employers must keep records for each covered, non-exempt employee, including information such as hours worked each day and total hours worked each workweek. Records must be kept for at least three years. The records are important to determine if employees are being paid properly under the FLSA’s minimum wage and overtime pay requirements. The records may be reviewed by the U.S. Department of Labor’s Wage and Hour Division. Failure to keep accurate records can result in legal consequences.
To summarize, the FLSA established basic wage and hour standards for covered, non-exempt employees including minimum wage, overtime pay, and recordkeeping requirements. Employers must comply with these standards to avoid violations and legal penalties. Employees should understand their rights under the FLSA to ensure they are being paid properly.
Overtime Pay Requirements Under the FLSA
Exemption Status
As an employee, it is important to understand whether you are exempt or non-exempt from overtime pay under the FLSA. Non-exempt employees are entitled to overtime pay of 1.5 times their regular rate of pay for all hours worked over 40 in a workweek. Exempt employees, on the other hand, are not subject to overtime pay. To qualify as an exempt employee, you must meet certain requirements regarding your job duties and be paid on a salary basis.
Job Duties Test
Your job duties must primarily involve executive, administrative, or professional duties to be considered exempt. Executive exempt employees must manage the enterprise or a department, and regularly supervise two or more employees. Administrative exempt employees must perform office or non-manual work directly related to management or general business operations. Professional exempt jobs require advanced knowledge in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction.
Salary Basis Requirement
To be exempt, you must also be paid on a salary basis. This means receiving a predetermined amount of compensation each pay period that is not subject to reduction based on quantity or quality of work. Your salary may be reduced only in certain circumstances, such as for disciplinary infractions. If your salary falls below the minimum salary threshold for exemption, currently $684 per week ($35,568 per year), you may be eligible for overtime pay.
Some occupations that commonly qualify for exempt status include teachers, doctors, lawyers, accountants, pharmacists, engineers, and business executives. However, not all employees in these roles meet the requirements for exemption. Non-exempt employees may include retail workers, construction workers, call center employees, data entry clerks, and many more.
If you remain unsure of your exemption status, you can request a determination from the Wage and Hour Division of the Department of Labor. They can conduct an investigation to decide if your position properly qualifies as exempt from overtime pay under the FLSA.
Child Labor Regulations in the FLSA
The FLSA establishes restrictions and prohibitions on the employment of minors. The Act sets the minimum age for employment at 14 years old, with exceptions for agricultural work and certain other jobs. However, for minors under the age of 16, the number of hours worked is limited.
Age Restrictions
In non-agricultural employment, the FLSA prohibits the employment of children under the age of 14. The employment of 14- and 15-year-olds is also restricted. These minors cannot work during school hours, more than 3 hours on a school day, more than 18 hours in a school week, and more than 8 hours on a non-school day or 40 hours in a non-school week. Work hours must be between 7 a.m. and 7 p.m. during the school year.
Restricted and Prohibited Occupations
The Secretary of Labor has determined that certain occupations are too hazardous for minors to perform. These occupations include those involving the use of power-driven machinery, the operation of motor vehicles, work in logging and sawmilling, roofing, excavation, and demolition. 14- and 15-year-olds are also prohibited from working in manufacturing, mining, or construction.
Enforcement
The Wage and Hour Division (WHD) of the Department of Labor is responsible for enforcing the child labor provisions of the FLSA. The WHD investigates complaints and conducts random compliance checks to identify any violations. Violations can result in civil or criminal legal actions, including penalties up to $11,000 per minor for each violation.
To ensure compliance with the FLSA’s child labor requirements and prevent abuse, employers should maintain records indicating the name, address, occupation, and age of each minor employee. Work permits and proof-of-age documents should also be kept on file. By closely following the child labor regulations of the FLSA, employers can avoid noncompliance issues and provide appropriate work opportunities for minors.
Recordkeeping Rules for Employers
To comply with the Fair Labor Standards Act (FLSA), employers must maintain accurate records of hours worked and wages paid to employees. As an employer, you are required to keep records for each employee that include:
- Basic employee information: name, address, occupation, sex, and date of birth if under 19 years old.
- Hours worked each day and total hours worked each workweek. This includes the time the employee starts and stops work. For non-exempt employees, employers must also record the number of hours worked over 40 in a workweek.
- Total regular and overtime wages paid for each workweek. Employers must record gross wages earned, deductions made, and net wages paid.
- Dates of payment and the pay period covered by each payment.
Employers should document hours worked and wages paid accurately and in a timely manner to properly compensate employees. Records must be kept for at least three years for most documents. However, collective bargaining agreements, sales and purchase records, and records related to FLSA exemptions must be retained for at least five years.
It is recommended that employers use a timekeeping system that requires employees to record hours when they start and stop work each day. Time cards, punch clocks, biometric systems, and electronic timesheets are common options. Requiring employees to sign in and out helps avoid disputes over hours worked and ensures FLSA compliance.
For non-exempt employees, overtime hours must be accurately recorded and paid at one and one-half times the regular rate of pay. Failure to properly compensate employees and maintain records may result in FLSA violations and legal consequences. Employers should periodically review recordkeeping practices and make necessary changes to follow the FLSA. Accurate and organized records benefit both employers and employees.
FLSA Exemptions to Know
To be exempt from FLSA overtime rules, employees must meet certain criteria based on their job duties and responsibilities. As an employer, it is important to understand the exemptions that may apply to positions within your organization. The primary exemptions are:
Executive Exemption
Executive employees, such as managers and administrators, are exempt if they regularly supervise at least two full-time employees, have the authority to hire and fire, and are paid on a salary basis. Their primary duty must be managing the enterprise or a department. Executive employees exercise independent judgment on matters of significance.
Administrative Exemption
Administrative employees are exempt if they perform office or non-manual work directly related to management or general business operations, and exercise discretion and independent judgment. Their primary duty must relate to servicing the business itself. Examples include human resources managers, compliance officers, and executive assistants.
Professional Exemption
The professional exemption applies to positions requiring an advanced degree or professional certification and discretion, such as doctors, lawyers, accountants, teachers, scientists, and engineers. Their primary duty must involve applying specialized knowledge and skills. Creative professionals, like journalists, actors, musicians, and artists may also qualify for this exemption.
Computer Employee Exemption
Computer system analysts, software engineers, programmers, and similarly skilled professionals in computer-related occupations may be exempt. They must be employed as a computer systems analyst, software engineer, or programmer, paid on a salary or fee basis, and their primary duty must consist of: (1) The application of systems analysis techniques and procedures to determine hardware, software, or system functional specifications; (2) The design, development, documentation, analysis, creation, testing, or modification of computer systems or programs based on and related to user or system design specifications; or (3) The design, documentation, testing, creation, or modification of computer programs related to machine operating systems.
To summarize, the FLSA provides minimum wage and overtime pay protections while also exempting certain employees from those requirements based on the type of work they perform. Making incorrect exemption classifications can lead to costly penalties, so employers should exercise caution and seek legal counsel as needed.
How to File a Claim for FLSA Violations
If you believe your employer has violated the FLSA, you have the right to file a claim to recover any unpaid wages. The process for filing a claim involves several steps:
First, you must contact your local Wage and Hour Division (WHD) office. You can locate your nearest office on the WHD website. When you call, explain that you wish to file a complaint regarding possible FLSA violations. A WHD investigator will conduct an initial phone interview to get details about your claim.
Next, the WHD will review your complaint to determine if an investigation is warranted. If the evidence suggests an FLSA violation may have occurred, the WHD will conduct a full investigation. As part of the investigation, the WHD may interview you, your co-workers, and your employer. The WHD may also review payroll records and worksite conditions.
If the WHD investigation finds that your employer violated the FLSA, the WHD will calculate the amount of back wages owed to you and your co-workers. The WHD will then contact your employer and request payment of the back wages. If your employer pays the back wages, the investigation will conclude. However, if your employer refuses to pay, the WHD may file a lawsuit on your behalf to recover the wages in court.
You have the right to pursue your own private lawsuit against your employer for FLSA violations, with or without the WHD’s assistance. However, the WHD recommends attempting to resolve wage disputes through the administrative complaint process first before filing a private lawsuit. Lawsuits can be time-consuming and expensive. The WHD complaint process is free and aims to resolve issues efficiently without litigation when possible.
Whether through the WHD’s intervention or a private lawsuit, the FLSA allows employees to recover not just the unpaid wages but also an additional equal amount in liquidated damages, as well as attorney’s fees and court costs. Filing a claim for FLSA violations can be a complex process, but the potential to recover substantial compensation makes it worth understanding and pursuing your rights.
FAQs on the Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, record-keeping, and child labor standards for full-time and part-time workers in the United States. The FLSA requires employers to pay covered employees a minimum wage of $7.25 per hour and time-and-a-half for overtime hours worked.
The FLSA applies to most employees, including those employed by the federal, state and local governments. However, the FLSA does provide exemptions for certain types of employees, including executive, administrative, and professional employees who meet certain requirements. The FLSA also provides exemptions for seasonal recreational employees, small farm workers, and employees of exempt companies.
To qualify for overtime pay under the FLSA, you must meet three conditions:
I) You must be a non-exempt employee. Exempt employees, such as executive, administrative or professional employees, are not entitled to overtime pay.
II) You must be employed by a covered employer. Most employers are subject to the FLSA, including federal, state and local government agencies. Some small businesses may be exempt.
III) You must work more than 40 hours in a workweek. A workweek is typically defined as seven consecutive 24-hour periods over seven days. Hours worked over 40 in a workweek must be paid at time-and-a-half your regular pay rate.
If you meet all three conditions, you should be receiving overtime pay when you work over 40 hours in a single workweek. If you believe you have been improperly denied overtime pay, you may file a complaint with the Wage and Hour Division of the Department of Labor. They can investigate and recover back wages if a violation is found.
The FLSA requires employers to keep records of wages, hours, and other conditions and practices related to employment. These records must be kept for each covered employee and include:
•Personal information: Employee’s name, address, occupation, sex, and birth date if under 19 years of age.
•Hour and pay records: Time and day of week when employee’s workweek begins; hours worked each day and total hours worked each workweek; basis on which employee’s wages are paid; regular hourly pay rate; total daily or weekly straight-time earnings; total overtime earnings for the workweek; all deductions; total wages paid each pay period; and date of payment and pay period covered.
•Other records: Total additions to or deductions from wages; agreements with employee for extra compensation; and certified records of employee’s weekly, monthly or quarterly work schedules. Records must be kept for at least 3 years.
Conclusion
As we have explored, the Fair Labor Standards Act is crucial legislation that protects workers and ensures fair compensation. By understanding the key provisions, exemptions, and applications of the FLSA, you can ensure that you and your employees receive proper payment for hours worked. Compliance with wage, overtime, and recordkeeping rules is essential, and the FLSA provides important guidelines. Educate yourself on this landmark law, know your rights and responsibilities, and advocate for fair labor practices. Together we can work towards economic justice and dignity for all workers.
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