FLSA Compliance Issues Regarding Overtime Pay, Minimum Wages and Hours

The Fair Labor Standards Act (FLSA) sets the federal standards for minimum wage, overtime, and recordkeeping, including youth employment standards, for full-time and part-time workers in the private sector and in federal, state, local governments. Generally, employers are expected to abide by and to comply with the rules set by FLSA in regard to wage and overtime issues. Employers are require to keep a visit Employment Poster clearly visible and posted at all times for their employees.

Who is covered by FLSA?

Across the country, more than 130 million workers are covered by the FLSA, which is enforced by the Wage and Hour Division of the Department of Labor.

Exempt vs. Non- Exempt Employees

Under the FLSA, employees are categorized as either an exempt or non-exempt employees. Exempt employees are those not covered under the FLSA while those that are covered are referred to as non-exempt.

An employee can be covered by FLSA either through enterprise coverage or individual coverage.

Enterprise coverage includes employees who work for businesses, organizations or enterprises with annual dollar volume sales of at least $500, 000. This coverage also includes hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies.

Individual FLSA Coverage

Employees who are not covered by the enterprise coverage may still be protected by the FLSA under the individual coverage. This covers workers engaged in “interstate commerce or those involved in the production of goods for commerce”.

They usually include the following employees:

• Those who work in communication and transportation
• Those who regularly use mails, telephones, or telegraph for interstate communications
• Those who keep records of interstate transactions
• Those who handle, ship, or receive goods in interstate commerce
• Those who work for independent employers in contractual jobs like clerical, custodial, maintenance
• Domestic service workers such as housekeepers, babysitters and cooks
• Assembly and factory workers

FLSA Wage and Overtime Pay Requirements

Generally, the law requires employers to pay employees overtime (hours worked over 40 in a week) at 1 ½ times the employee’s regular rate, which may be eligible as a credit toward the FLSA compliance requirement.

However, the law does not require employers to pay overtime for Saturdays, Sundays, holidays, and other situation, except when employers decide to do so or as a custom, or as required by state law, or negotiated in a union contract.

With regard to recordkeeping, the law requires employers to keep employee time and pay records. They also ask to display an official poster outlining the requirements of the FLSA.

To safeguard the educational opportunities of minors and young employees, the FLSA prohibit youth and minors in jobs which conditions are detrimental to their health and well-being. However, it does not limit the number of hours an employee, who is at least 16 years old, may be required to work.

Employee Daily Work Hours

Also, FLSA does not limit 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.

According to FSLA standards, the federal minimum wage is $7.25 per hour (effective July 24, 2009). In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage. The law does not allow deductions made from wages such as cash or merchandise shortage, tools, employer-required uniforms, among others.

On the other hand, the FLSA does not regulate the following employment practices:

• Pay raises and fringe benefits
• Vacation, holiday, severance and sick pay
• Premium pay for weekend or holiday work
• Meal or rest periods, holidays off and other vacations
• Discharge notice, reason for discharge
• Immediate payment of final wages to terminated employees

Many of these issues are addressed by other laws such as the Family and Medical Leave Act, and Workplace health and safety laws.

Proper compliance with all FLSA regulations may require understanding of various laws and regulations. At the same time, failure to comply with these federal requirements may result to penalties. To ensure that you have properly complied with these standards in wages, overtime and record keeping, you have to consult with an experienced employment attorney.

• This article is provided for informational purposes only. If you need help with an Employment Law Problem, click here to talk to Rodney Mesriani or an Employment lawyer in your area.