What Is The Fair Labor Standards Act (FLSA)? Workplace Guide

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As an employer, you can’t always set your own rules. You need to follow specific federal, state, and local standards. The FLSA is one of these federal regulations you must understand and adhere to. 

So, what exactly is the FLSA?

The Fair Labor Standards Act (FLSA) is the foundation of workplace regulations, aiming to protect employees’ rights and ensure fair compensation. Dating back to 1938, this federal law emerged in response to exploiting workers during the Great Depression. It establishes;

Over the years, the FLSA has evolved through various amendments, addressing issues such as equal pay for male and female workers and creating standards for compensatory time.

The FLSA safeguards workers’ rights by describing between exempt and nonexempt jobs based on salary, duties, and responsibilities. Its scope extends to almost all U.S. employers, emphasizing the importance of providing good working conditions and fair compensation. 

By understanding the various aspects covered by the FLSA, employers can ensure adherence to the law while promoting a conducive work environment for their employees. You probably know about many of the regulations in the FLSA, but you might not realize that these laws are part of the act itself. 

To refresh your memory on workplace regulations, let’s explore some of the areas covered by the FLSA and how they impact you.

What is FLSA?

flsa

FLSA, or the Fair Labor Standards Act, is a federal law establishing significant standards for labor practices in the United States. Enacted in 1938, it ensures fair treatment and compensation of workers across various industries. 

FLSA regulations apply to private and government employees and span federal, state, and local levels. They encompass key provisions like;

  • Banning child labor under 14
  • Setting minimum wage standards
  • Mandating overtime pay (one and one-half times the regular pay rate) for hours exceeding 40 per week. 

Compliance with these rules is essential for employers to avoid penalties and legal consequences. 

This legislation is particularly vital for small businesses. It provides clear guidelines on wage practices, helps them avoid legal issues, and maintains ethical workplace practices. 

What Is the Fair Labor Standards Board?

The Fair Labor Standards Board ensures that business owners follow the Fair Labor Standards Act (FLSA) rules. This means they ensure that workers are paid fairly.

Employers must follow the Board’s rules to treat their workers fairly and comply with labor laws. The Board checks complaints and interprets the FLSA rules through the Wage and Hour Division (WHD) of the U.S. Department of Labor.

The Board is important because it ensures that workers are treated fairly and that there are fair employment practices in different industries. Businesses owners must follow the Board’s rules to avoid being fined or facing legal trouble.

Which Employees are Covered by the FLSA?

employee

The Fair Labor Standards Act (FLSA) is a U.S. law that applies to most workers, regardless of whether they work in the government or private sector.

It covers business employees operating across state lines or producing goods sold between states.

Certain jobs, like housekeepers and caregivers, are also covered if they earn at least $2,500 annually from one employer.

FLSA regulations affect both full-time and part-time employees in numerous industries, such as;

  • Healthcare
  • Retail
  • Manufacturing
  • Technology

However, certain workers, such as independent contractors and volunteers, are not subject to these regulations.

Moreover, employers must identify covered employees by the FLSA to ensure compliance with minimum wage and overtime pay rules.

Basic Terms Used in FLSA

Fail-Labor-Standards-Act

Let’s look at two key terms used in the FLSA when talking about employees.

1. Hours Worked

Hours of work include all the time an employee spends on duty, whether at the workplace or another assigned location.

This encompasses the duration of the workday’s main activities from the start to the end. Plus, it includes any extra time the employee is allowed to work.

Employers need to correctly record and compensate for all these hours, including regular and overtime hours.

2. Work Week

A workweek is 168 hours, which spans seven consecutive 24-hour days.

It can start on any day, and at any time the employer chooses.

Each workweek is treated separately for wage and overtime calculations without averaging multiple weeks.

Employee coverage and wage compliance are determined based on this weekly cycle.

Understanding the workweek concept is essential for ensuring proper payment and adherence to FLSA regulations.

What Does the FLSA Cover?

Let’s explore several aspects covered by the FLSA.

1. Child Labor

These provisions, also known as child labor laws, are designed to ensure that young people’s work is safe. 

The law was designed to protect children’s educational opportunities and prevent minors from working in conditions that are detrimental to their health.

The FLSA sets strict guidelines for child labor to ensure the safety and well-being of young workers. It limits the types of jobs and hours that individuals under 18 can work. For example, those under 16 cannot work during school hours and are restricted from working in risky occupations. 

2. Minimum Wage

Pros and Cons of Raising the Minimum Wage

The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour, ensuring workers receive a baseline income. 

However, some states have higher minimum wage rates, which employers must adhere to. For Example, California has $16 per hour.

This dual requirement means that in states with their own minimum wage laws, employers must pay the higher of the two rates. 

3. Overtime Pay

Nonexempt employees covered by the Fair Labor Standards Act (FLSA) must be paid overtime at a rate of at least one and one-half times the regular pay when working more than 40 hours a week. Therefore, they get one and a half times their usual pay for those extra hours. 

Moreover, it’s important to note that the FLSA doesn’t require extra pay for working weekends or holidays unless those hours push them over the 40-hour limit. 

However, some jobs, like executives, administrators, professionals, and certain IT positions, are exempt from these overtime rules. 

The FLSA defines a workweek as any fixed 7-day pay period, starting whenever the employer chooses. 

4. Hours Worked

As per Fair Labor Standards Act (FLSA), hours worked includes all the time an employee spends at work.

They may include;

  • Doing their main tasks
  • Attending training
  • Traveling between job sites
  • Taking short breaks of less than 20 minutes

Employers need to keep track of all these hours and make sure employees are paid for them correctly. 

5. Equal Pay and Age Discrimination

The FLSA includes provisions to combat pay discrimination. The Equal Pay Act requires that men and women be given equal pay for equal work in the same workplace. 

The work must be significantly equal in skill, effort, responsibility, and working conditions. 

Moreover, the Age Discrimination in Employment Act (ADEA) protects workers aged 40 and older from discrimination based on age. 

6. Record Keeping

record keeping

Employers must keep accurate records of their employees’ hours, pay, and work conditions according to the Fair Labor Standards Act (FLSA). 

These records should include basic general information like;

  • Employee’s name and social security number
  • Details about their work hours and overtime pay
  • Any deductions or additions to their wages

The law doesn’t specify exactly how these records should look but requires certain key information to be present. Employers also need to display a poster that clearly explains the FLSA rules.

These records are important for following wage and hour laws and protecting employers during audits or disagreements. Employers usually keep these payroll records for around three years.

Who Has FLSA Exemptions?

Here are the industries and employees who have FLSA exemptions.

1. IT/Computer Workers

computer worker

IT/computer workers might not have to follow all FLSA rules if they meet certain conditions. To qualify, they should mainly do computer systems, programming, or software engineering tasks. 

Also, they need to earn at least $684 per week or $27.63 per hour. But if they focus on routine computer maintenance or tech support, they likely don’t meet the exemption criteria.

2. Volunteers and Independent Workers

Volunteers and independent workers are usually not covered by the FLSA. Volunteers offer services without expecting payment, while independent contractors run their own businesses. 

However, if employers wrongly classify workers as volunteers or contractors instead of employees, it can lead to legal problems.

3. Office Workers

Office workers’ eligibility for FLSA rules depends on their job duties and pay. Administrative staff engaged in non-manual management or business operations work may be exempt if they earn at least $684 per week.

4. Outsider Sales People

Outside sales employees who regularly sell away from their employer’s place of business might be exempt from FLSA rules. 

They typically work independently and have freedom in sales. However, inside salespeople, mostly working at their employer’s office, usually don’t qualify for this exemption. FLSA clearly explains that inside and outside sales are of equal importance.

5. Seasonal Employees

hire seasonal employees

Seasonal workers are those hired temporarily for busy periods, and must follow FLSA rules. However, exemptions could apply based on their tasks and nature of work. 

Employers need to understand their duties to decide if they’re exempt.

6. Under Other Labor Laws

Apart from the FLSA, other labor laws also affect employee exemptions. 

For instance, the Davis-Bacon Act sets wage rules for some federal contractors, while the Family and Medical Leave Act (FLMA) allows eligible employees to take leave for specific reasons. 

Most Common Violations of the Fair Labor Standards Act (FLSA)

To treat all employees fairly it’s important to learn about the FLSA properly. Here are some common violations of the FLSA.

1. Misclassifying Employees

Misclassifying employees as independent contractors is a common mistake that can lead to FLSA violations. 

Employers sometimes overlook the specific criteria that distinguish between employees and contractors. 

Therefore, understanding these distinctions is essential to ensuring compliance with FLSA regulations. 

2. Confusion Between Salaried and Hourly Employees

Employers may accidentally confuse the rules governing salaried and hourly employees, leading to FLSA violations. 

For instance, they might assume that salaried employees are automatically exempt from overtime pay requirements, even if they don’t meet the exemption criteria. 

This misunderstanding can result in underpayment or non-payment of overtime wages, highlighting the importance of correctly classifying employees and adhering to FLSA guidelines.

3. Not Paid for “Off the Clock” Activities

Failure to compensate employees for work performed “off the clock,” such as responding to emails or attending meetings outside of regular hours, is another common FLSA violation. 

Employers must accurately track all hours each employee works. They may include tasks performed outside their scheduled shifts, to ensure fair compensation and avoid potential legal issues.

4. Not Paid for Working During the Break

office break

Employees who work through designated break times but are not compensated for that time may experience FLSA violations. 

Employers must ensure employees are paid for all hours worked, including any time spent performing job duties during breaks. 

5. Refuse to Pay Overtime Agreements

Employers sometimes refuse to honor overtime agreements or pay employees for overtime hours. 

This violation occurs when employers disregard valid overtime claims, resulting in underpayment of wages. 

6. Average Work Weeks

Another example of FLSA violations is the calculation of overtime based on average work weeks instead of actual hours worked. 

Employers must accurately track and compensate employees for all hours worked each week, including overtime hours. 

What If FLSA Doesn’t Cover You, What Other Laws Will Apply?

Check out these laws below that will apply if the FLSA doesn’t cover you.

1. Collective Agreements

Collective agreements are agreements between employers and employee groups that decide on job terms and conditions. These deals usually include pay, hours, perks, and work conditions. 

They give workers extra protection compared to the FLSA, such as rules for solving problems or specific safety rules for different jobs. 

Managers should know about any of these deals that apply to their workers to follow the laws.

2. Contract Law

Contract

Contract law governs agreements between individual employers and employees, setting forth their rights and responsibilities. 

Employment contracts, whether they’re written down or understood without being written, decide job duties, compensation, and termination procedures.

When the Fair Labor Standards Act (FLSA) rules don’t apply, contract law matters. This means both the employer and the employee must follow what they agreed to in their employment contracts.

It’s really important for both sides to discuss the contract clearly and understand it well. This helps avoid misunderstandings and legal conflicts.

3. Industry Specific Laws

Different types of job titles have their own rules at work, made to fit each job’s needs and problems. 

For example, rules about safety are essential in construction and healthcare. In hospitality, it’s important to ensure everyone gets paid fairly. And in farming, it’s vital to protect the rights of workers.

Therefore, human resources and employers must follow these rules.

4. Local Municipal Labor Laws

Local governments can establish their own work rules that supplement those of the federal and state governments. 

These rules can cover the lowest amount of money paid for work, having time off with pay, or how shifts are scheduled. 

Companies in a particular city must follow these local rules and other rules set by the state and federal governments.

5. Federal Laws

Different federal rules control different aspects of work, such as keeping the workplace safe, treating everyone fairly, and providing employee benefits.

Some of these rules are the Occupational Safety and Health Act (OSHA), the Americans with Disabilities Act (ADA), and the Family and Medical Leave Act (FMLA).

6. State Laws

State labor laws are rules made by each state to help workers. They supplement the rules made by the whole country and might give workers extra protection or requirements.

Every state has its own rules about the least amount of money workers can be paid, extra pay for working more hours, and what workers can expect from their employers.

Employers need to know and follow the rules made by each state to ensure they are doing things right and to avoid getting into trouble.

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On Which Pay or Benefits FLSA Isn’t Required?

Employment laws by FLSA exemptions include certain types of pay or benefits.

  • Discretionary bonuses, like a holiday or performance-based bonuses, are exempt from FLSA regulations.
  • Certain fringe benefits, such as health insurance or retirement plans, are not mandated by the FLSA.
  • Employers can offer limited benefits based on business needs and employee preferences.
  • Payments like expense reimbursements or discretionary incentive payments may not fall under FLSA requirements.

Does the FLSA Cover Both Part-Time and Full-Time Employees?

Yes, the Fair Labor Standards Act (FLSA) covers both part-time and full-time employees. It sets the minimum hourly wage, overtime pay, recordkeeping, and child labor standards for workers in the private and public sectors. It does so regardless of their employment status or the number of hours worked per week. 

Whether an individual is classified as part-time or full-time, they are entitled to the protections the FLSA provides. 

What Are the Results of FLSA Violations?

violation

Violating the Federal Fair Labor Standards Act (FLSA) can lead to significant consequences for employers. Here’s what happens if you don’t comply:

  • Back Wages and Damages: The Department of Labor (DOL) can make you pay back wages and an equal amount in damages for unpaid minimum wage and overtime.
  • Penalties: You can be fined if you violate child labor laws or repeatedly break minimum wage or overtime regulations. Willful violations can lead to higher penalties.
  • Lawsuits and Injunctions: The DOL can sue you on behalf of employees or seek court orders to stop you from violating the employment law.
  • Criminal Charges: In severe cases, you might face criminal charges, which can lead to fines or even jail time.
  • Employee Protection: If you retaliate against employees who file complaints, you might have to reinstate them, pay lost wages, and cover other damages.

The U.S. Department of Labor’s Handy Guide to the Fair Labor Standards Act (FLSA) is your go-to manual for understanding these provisions of the FLSA. 

It explains how much hourly rate workers and tipped employees should earn, and how to calculate the regular rate of pay. 

This guide clarifies what the FLSA covers, such as jobs involving work across state lines (interstate commerce). It also covers who doesn’t, like certain exempt positions. 

Moreover, its main goal is to ensure workers are treated fairly, receive proper pay, and stay safe at work, especially to prevent serious injury. 

Although it sets minimum standards, like paying extra for overtime, it doesn’t address everything, such as sick pay. Congress developed this tool to safeguard workers’ rights and promote fairness in employment.

How Does the FLSA Work?

  • FLSA protects employees’ rights and ensures fair treatment in the workplace.
  • It sets the minimum wage requirements that employers must pay their employees.
  • It also requires employers to pay extra money for overtime hours.
  • FLSA has rules about child labor, limiting when and where kids can work.
  • Employers must keep accurate records of wages and total hours worked by their employees.
  • FLSA divides workers into two groups: those who get overtime pay and those who don’t.
  • The Department of Labor enforces FLSA through investigations and legal actions against violators.

Frequently Asked Questions (FAQs)

What are the minimum salary thresholds for the “white collar” exemptions under the FLSA?

Minimum wages are the minimum hourly wage an employer has to pay. The U.S. Department of Labor (DOL) announced a new rule in April 2024.

It raised the minimum pay levels for certain white-collar jobs that are exempt from federal overtime pay requirements. 

The pay increases will happen in two stages: a smaller increase in July 2024 and a larger one in January 2025.

Are Collective Bargaining Agreements Vital for Fair Overtime Provisions?

In organizations, it is important that workers negotiate collective bargaining agreements together.

It is because they explain things like pay and work hours, especially overtime provisions. These agreements usually say how much extra pay people get for working extra hours. 

Moreover, some workers might be called “bona fide executives,” which means they’re not entitled to minimum wage or extra pay for overtime under the Fair Labor Standards Act (FLSA). However, this depends on what their job involves and how much they earn.

What is an administrative exemption?

The “administrative exemption” in the Fair Labor Standards Act (FLSA) lets certain employees skip minimum wage and overtime pay rules based on their job duties. 

To qualify, an employee’s main job must involve office or non-manual work related to managing the employer’s business or customers. 

Also, they must make important decisions independently in their role. This exemption usually applies to employees handling crucial administrative tasks like managing finances, handling HR, or following regulations.

Conclusion

In conclusion, the Fair Labor Standards Act (FLSA) is important for making sure workers are treated fairly in the United States. 

Employers must follow FLSA minimum wage rules, which set the lowest amount they can pay their employees. Starting April 2024, a final rule from the Department of Labor will change pay levels for some white-collar jobs that don’t get overtime, affecting many businesses.

It’s important to correctly calculate an employee’s regular rate, especially for overtime pay. Moreover, employers should learn about the FLSA’s rules and regularly check resources like the fact sheet from the Department of Labor for updates. 

Knowing how the FLSA impacts different parts of employment, from pay calculation to work hours, is key for following the law and creating a fair workplace.