The Fair Labor Standards Act (FLSA) is a U.S. federal law that governs key aspects of employment, including minimum wage, overtime pay, recordkeeping, and child labor protections. It applies to most workers in the private sector as well as federal, state, and local government employees.
Key Provisions of the FLSA
The FLSA establishes the following foundational labor standards:
- Minimum Wage: Sets a federal hourly wage floor for covered workers.
- Overtime Pay: Requires non-exempt employees to be paid at least 1.5 times their regular hourly rate for hours worked over 40 in a single workweek.
- Recordkeeping: Obligates employers to maintain accurate time and pay records.
- Child Labor: Regulates the employment of minors to ensure their safety and educational opportunities.
Who Is Covered by the FLSA?
The FLSA applies to most workers through two forms of coverage:
- Enterprise Coverage: Applies to businesses with at least two employees and annual revenue of $500,000 or more.
- Individual Coverage: Applies to workers engaged in interstate commerce or producing goods for such commerce, regardless of business size.
Note: Certain employees, such as executives, administrators, professionals, and seasonal workers, may be exempt from specific FLSA requirements.
Overtime Under the FLSA
Overtime is defined as time worked beyond 40 hours in a workweek. Covered (non-exempt) employees are entitled to overtime pay at 1.5x their regular rate for all additional hours.
Recordkeeping Requirements
Employers must retain key employment records, including:
- Employee details: Name, address, occupation
- Wage information: Pay rate, hours worked, gross earnings, deductions
- Work hours: Daily and weekly time logs
These records must be preserved for at least three years.
Child Labor Regulations
The FLSA protects minors through restrictions on employment:
- Minimum working age: 14 years old (with some exceptions)
- Hour restrictions: Limits on working hours for those under 16
- Hazardous jobs: Prohibited for workers under 18, as defined by the Department of Labor
FLSA and Remote or Global Workers
- The FLSA applies to U.S.-based employees, including theose working remotely.
- Global employees are not subject to the FLSA; U.S. employers must comply with local labor laws in each country when hiring internationally.
Enforcement and Penalties
The U.S. Department of Labor’s Wage and Hour Division (WHD) enforces the FLSA through:
- Investigations and audits
- Employee complaints
- Legal actions when violations are found
Penalties for non-compliance may include:
- Back pay for unpaid wages or overtime
- Civil fines for repeat or willful violations
- Criminal charges in severe cases
- Fines for child labor violations
Waiver of FLSA Rights
Employees cannot waive their rights under the FLSA, including the right to minimum wage and overtime pay. Any agreement attempting to do so is unenforceable under federal law.
Federal vs. State Laws
The FLSA sets minimum national standards. States may enact laws offering greater protections (e.g., a higher minimum wage or stricter child labor rules). In such cases, the law most favorable to the employee prevails.
Exempt vs. Non-Exempt Employees
The FLSA helps define whether employees are exempt from overtime:
- Exempt employees: Typically include executives, administrators, and professionals who meet salary and duties tests.
- Non-exempt employees: Must be paid at least minimum wage and receive overtime pay.
Proper classification depends on actual job duties, not job title alone.
Common FLSA Misconceptions
- Salaried ≠ Exempt: Being on salary does not automatically exempt an employee from overtime rules.
- Small business exemption myth: Many small businesses are covered under the enterprise or individual criteria.
- "Comp time" as a substitute: In the private sector, compensatory time off cannot replace overtime pay (only public employers may offer this under strict conditions).
How Employers Can Ensure FLSA Compliance
- Train HR staff and managers on FLSA rules
- Audit classifications and pay practices regularly
- Maintain thorough documentation
- Review workplace policies to reflect current regulations
The FLSA plays a crucial role in protecting workers’ rights and promoting fair labor standards in the U.S. Employers must remain diligent in understanding and complying with its provisions to avoid legal penalties and maintain ethical employment practices.
