Fair Labor Standards Act
Managing employer compliance can be a tedious task, but it’s a highly visible, important way that HR managers minimize risk for the business they represent. If you are an HR manager it’s up to you to ensure that all personnel business practices follow current employment law and that you are keeping proper records to document your company’s compliance. We’ll help you navigate ten crucial mandates, explaining the obligations and compliance considerations you need to be aware of in order to avoid a catastrophic loss.
Fair Labor Standards Act of 1938 (FLSA)
Compliance summary: Overview
The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek.
- FLSA Minimum Wage: The federal minimum wage is $7.25 per hour effective July 24, 2009. Many states also have minimum wage laws. In cases where an employee is subject to both state and federal minimum wage laws, the employee is entitled to the higher minimum wage.
- FLSA Overtime: Covered nonexempt employees must receive overtime pay for hours worked over 40 per workweek (any fixed and regularly recurring period of 168 hours — seven consecutive 24-hour periods) at a rate not less than one and one-half times the regular rate of pay. There is no limit on the number of hours employees 16 years or older may work in any workweek. The FLSA does not require overtime pay for work on weekends, holidays, or regular days of rest, unless overtime is worked on such days.
- Hours Worked (PDF): Hours worked ordinarily include all the time during which an employee is required to be on the employer’s premises, on duty, or at a prescribed workplace.
- Recordkeeping (PDF): Employers must display an official poster outlining the requirements of the FLSA. Employers must also keep employee time and pay records.
- Child Labor: These provisions are designed to protect the educational opportunities of minors and prohibit their employment in jobs and under conditions detrimental to their health or well-being.
Employers must comply with FLSA’s record-keeping requirements for employment and earnings; order, shipping, and billing records; additions or deductions from wages; certificates of ages; wage rate tables; and work time schedules for two years. In addition, employers must keep records which show employee’s name, address, sex, and birth date; occupation and daily work schedule; individual contracts and bargaining agreements; sales and purchase records; regular hourly rate of pay for any week in which nonexempt person worked overtime; record of hours worked on a daily and weekly basis with total earnings due for nonexempt employees; and actual wages paid and deductions taken for three years. Employers are required to post a notice determined by the Wage- Hour Division in a conspicuous place at the worksite.
U.S. Department of Labor, Wage and Hour Division
• DOL Wage and Hour Division, FLSA website
• Seyfarth & Shaw, Wage & Hour Litigation blog
• National Conference of State Legislatures, 2014 State Minimum Wages
Fair Labor Standards Act (FLSA) employer training is standard material in the system. This legislation was amended by congress in 2004 with the passage of the Fair Pay Act. This is the leading federal law regulating minimum wage and overtime compensation.
The act regulates child labor and equal pay for equal work, and encompasses three type of employees:
Those engaged in interstate commerce, including import and export.
- Those engaged in the production of goods for interstate commerce.
- Employees in the enterprise engaged in interstate commerce.