Chances are, some of your employees are covered by the Fair Labor Standards Act (FLSA), the federal labor law which establishes minimum wage, overtime pay, recordkeeping, and child labor standards for full-time and part-time workers. Other employees may be exempt from the FLSA’s minimum wage and/or overtime pay provisions. Understanding your obligations under the FLSA is crucial to your business—employers who don’t comply may be responsible for back wages and civil penalties, and may even face criminal sanctions for willful violations.
What the FLSA Requires
Key provisions of the FLSA include:
- Covered, non-exempt workers must be paid at least the minimum wage of $7.25 per hour and overtime pay at a rate of not less than 1-1/2 times the regular rate of pay after 40 hours of work in a workweek.
- Wages are due on the regular payday for the pay period covered.
- Deductions from wages for such items as cash or merchandise shortages, employer-required uniforms, and tools of the trade, are not legal to the extent that they reduce the wages of employees below the minimum rate or reduce the amount of overtime pay due under the FLSA.
- An employee must be at least 16 years old to work in most non-farm jobs and at least 18 to work in non-farm jobs declared hazardous by the Secretary of Labor. Youths 14 and 15 years old may work outside school hours in various non-manufacturing, non-mining, non-hazardous jobs under certain circumstances.
- Employers must keep certain records on wages, hours, and other items, as specified in the U.S. Department of Labor's (DOL) recordkeeping regulations.
- The law requires employers to display this poster where employees can readily see it.
Note: State laws on wages and hours may also apply to employment subject to the FLSA. When both the FLSA and a state law apply, the law setting the higher standards must be observed.
What the FLSA Does Not Require
You may be surprised to learn that there are a number of employment practices which the FLSA does not require. For example, the FLSA does not regulate:
- Vacation, holiday, severance or sick pay.
- Meal or rest periods, holidays off or vacations.
- Premium pay for weekend and holiday work.
- Pay raises or fringe benefits.
- Discharge notices, reasons for discharge or immediate payment of final wages to terminated employees.
- The number of hours in a day or days in a week an employee may be required or scheduled to work, including overtime hours, if the employee is at least 16 years old.
The above matters, if not covered by state law, are generally for agreement between the employer and the employees or their authorized representatives. Keep in mind, however, that even if not required by state law, implementing at least some of these policies may make good business sense; these policies can increase employee morale, keep your compensation packages competitive and reduce employee turnover. (Make sure that any policies you choose to implement are applied in a nondiscriminatory manner.)
Don’t Forget State Law!
Remember that if a state law offers greater protection to a worker than federal law, the state law will generally apply. The DOL makes available some state labor law resources on its website. Your state labor office may also be helpful.
For More Information
The DOL offers a host of guidance materials to help employers understand their obligations under the FLSA--check out the interactive Pay and Benefits elaws Advisors, available on a number of different topics related to the FLSA. You can also review our section on the Fair Labor Standards Act. And don’t miss our free Federal Laws by Company Size Chart--a must-have tool for keeping on top of the FLSA and other federal laws affecting your company.