The Wage and Hour Division of the U.S. Department of Labor implements and enforces the Fair Labor Standards Act (FLSA). The FLSA creates minimum wage, overtime pay, recordkeeping, and child labor standards that affect workers in the private sector and in federal, state, and local governments. Here are ten basic things employers should know about the FLSA:
1. Minimum Wage
If you have nonexempt or non salaried employees, the FLSA requires you pay them at least the federal minimum wage. The federal minimum wage rate is currently $7.25 per hour.
Tipped employees may qualify an employer to claim wage credits. If an employer is eligible for wage credits, tipped employees can be paid no less than $2.13 per hour, so long as the employees’ tips plus the hourly wage add up to at least $7.25 per hour.
There are also state, city, and county minimum wage laws that may be higher, lower, or equal to the federal requirement. Employers must pay the greatest of wages that may apply. For example, an employee working in California must be paid the state minimum wage because it is greater than the federal, but an employee in San Francisco, California must be paid the city minimum wage because it is greater than both the state and federal minimum wages. On the other hand, an employee in the state of Georgia must be paid the federal rate because it is greater than Georgia’s minimum wage of only $5.15 per hour.
2. Child Labor Standards
For employees under the age of 20, a lower minimum wage, commonly referred to as “opportunity wage,” may be paid for the first 90 consecutive calendar days of employment. The current youth minimum wage is $4.25. After the first consecutive 90 days, an employer must increase a youth’s pay to at least the federal minimum wage of $7.25 per hour.
Youth in non agriculture industries between the ages of 14 and 15 may only work for a limited number of hours each day and each week, so long as the work performed is outside of school hours. The minimum age at which youth can begin to work an unlimited number of hours is 16 years old—so long as the work performed is not considered hazardous by the Department of Labor. At 18 years old, youth may work in hazardous environments, such as mining, for an unlimited number of hours. Your state, city, or county may have child labor laws other than these regulations, such as obtaining a work permit. Be sure to check with your local municipality if you employ minors.
For more details on child labor laws under the FLSA, please see the Department of Labor’s Child Labor webpage.
Any nonexempt employee that works over 40 hours in a workweek must receive overtime pay. When calculating overtime, the FLSA requires employers to pay at least one-and-a-half times the regular rate of an employee’s pay.
Your state, city, or county may have its own overtime requirements that differ from the FLSA regulations. Employers must abide by the law that benefits their employees the most.
4. Hours worked
Any time during which an employee is required to be on an employer’s premises, on duty, or at a specific workplace is counted as “hours worked.” It also consists of any time an employee is permitted to work, regardless of whether he or she is required to do so. This means “hours worked” includes the employee’s regularly scheduled shift plus overtime.
A workweek, or work period, consists of 7 consecutive 24-hour periods, or 168 hours. A work period can begin on any day of the week, at any hour of the day, as determined by the employer. For ease of calculating minimum wage, each work period must stand alone, no matter if employees are paid on a weekly, biweekly, or monthly basis.
Nonexempt positions are also known as hourly positions. They are not exempt from the minimum wage and overtime regulations listed in the FLSA. This means employers must pay workers who are nonexempt at least the federal minimum wage for each hour worked, and overtime pay of no less than one-and-a-half times the employee’s hourly rate for working more than 40 hours in a workweek.
Exempt employees, or salaried employees, are excluded from minimum wage, overtime regulations, and other rights and protections granted to nonexempt workers. Exempt positions usually consist of executive, supervisory, administrative, professional, or outside sales jobs. However, job title alone does not determine an FLSA exemption. For a position to qualify as exempt, the position must consist of specific job duties and meet all salary requirements of the Department of Labor. In some industries, employees may be exempt from only one regulation within the FLSA but not from another. For example, railroad employees are exempt from receiving overtime pay but are still entitled to receive at least the federal minimum wage.
See the Department of Labor’s general overview of the FLSA exemptions and exemption qualifiers. Also check for industry-specific exemptions from the FLSA, such as farmworkers, railroad workers, fishermen, or airline employees.
8. Nursing Mothers
Under the FLSA, employers must provide nursing mothers with adequate break times that allow them to express milk. Nursing mothers must also be provided with a space, other than a bathroom, to nurse that is not intrusive of the public or other workers. Employers must abide by these regulations until one year after the birth of the nursing mothe’s child.
Employers who have nonexempt employees covered under FLSA regulations must keep specific records for those employees that include the following information:
- Full name of the employee and his or her social security number
- Birthdate, in the event an employee is younger than 19
- Date and time of week when employee”™s work period begins
- Total hours worked each work period, plus hours worked each day
- How often an employee is paid (e.g., hourly, weekly, biweekly, etc.)
- Regular hourly wage
- Total daily/weekly regular-time earnings
- Total overtime earnings for the work period/pay period
- Any additions or deductions from wages
- Net wages paid each pay period
- Pay dates and the pay period they cover
Records must also be kept for any employees who are partially exempt from the FLSA (e.g., railroad workers) in the event the exemption is ever investigated or challenged. Only employers whose employees are completely exempt from the FLSA may disregard these recordkeeping requirements.
How Long Should Records Be Kept & Where?
Payroll records, sales records, and union agreements must be kept on file for a minimum of three years. Time cards and other records pertaining to wages must be kept for at least two years.
Employee records must be accessible by the Wage & Hour Division of the Department of Labor for inspection. The employer may be asked to compute or transcribe the records, if necessary. Records should be kept at the main place of employment, or a central records office.
10. Posting Requirements
Employers must display the current version of the FLSA compliance poster in a conspicuous place that employees can easily access to read their protections and rights. You can get the latest federal FLSA poster as part of Poster Compliance Center’s OneSystem 1-Year Compliance Plan, which includes other mandatory posting notices such as the Employee Polygraph Protection Act (EPPA), Uniformed Services Employment and Reemployment Rights Act (USERRA), Occupational Safety and Health Act (OSHA), Equal Employment Opportunity (EEO), Family & Medical Leave Act (FMLA), plus any required posting notices issued by your state government. If you order the OneSystem 1-Year Compliance Plan, you will automatically receive the latest versions of all mandatory state and federal posting notices for free! Poster Compliance Center”™s OneSystem delivers the posters you need to be in full compliance with federal and state labor laws for an entire year.
For more information on the FLSA and how it affects your business, please visit our FLSA education page.