Fair Labor Standards Act of 1938 (FLSA), as amended (29
USC §201 et seq.;
29 CFR Parts 510 to 794)
The Fair Labor Standards Act (FLSA) establishes standards for minimum
wages, overtime pay, recordkeeping, and child labor. These standards
affect more than 100 million workers, both full‑time and part‑time, in
the private and public sectors.
The Act applies to enterprises with employees who engage in interstate
commerce, produce goods for interstate commerce, or handle, sell, or
work on goods or materials that have been moved in or produced for
interstate commerce. For most firms, a test of not less than $500,000 in
annual dollar volume of business applies (i.e., the Act does not cover
enterprises with less than this amount of business).
However, the Act does cover the following regardless of their dollar
volume of business: hospitals; institutions primarily engaged in the
care of the sick, aged, mentally ill, or disabled who reside on the
premises; schools for children who are mentally, or physically disabled
or gifted; preschools, elementary, and secondary schools and
institutions of higher education; and federal, state, and local
government agencies.
Employees of firms that do not meet the $500,000 annual dollar volume
test may be covered in any workweek when they are individually engaged
in interstate commerce, the production of goods for interstate commerce,
or an activity that is closely related and directly essential to the
production of such goods.
The Act covers domestic service workers, such as day workers,
housekeepers, chauffeurs, cooks, or full‑time babysitters, if they
receive at least $1,500 (2007) in cash wages from one employer in a
calendar year, or if they work a total of more than eight hours a week
for one or more employers. (This calendar year threshold is adjusted by the Social Security Administration each year.)
An enterprise that was covered by the Act on March 31, 1990, and that
ceased to be covered because of the increase in the annual dollar volume
test to $500,000, as required under the 1989 amendments to the Act,
continues to be subject to the overtime pay, child labor, and
recordkeeping requirements of the Act.
The Act exempts some employees from its overtime pay and minimum wage
provisions, and it also exempts certain employees from the overtime pay
provisions alone. Because the exemptions are narrowly defined, employers
should check the exact terms and conditions for each by contacting their
local Wage and Hour Division
office within the Department of Labor’s Employment Standards
Administration (ESA).
The following are examples of employees exempt from both the minimum
wage and overtime pay requirements:
- Executive, administrative, and professional employees (including
teachers and academic administrative personnel in elementary and
secondary schools), outside sales employees, and certain skilled
computer professionals (as defined in the Department of Labor's
regulations);
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- Employees of certain seasonal amusement or recreational
establishments;
- Employees of certain small newspapers and switchboard operators of
small telephone companies;
- Seamen employed on foreign vessels;
- Employees engaged in fishing operations;
- Employees engaged in newspaper delivery;
- Farm workers employed on small farms (i.e., those that used less
than 500 "man‑days" of farm labor in any calendar quarter of the
preceding calendar year); and
- Casual babysitters and persons employed as companions to the elderly
or infirm.
The following are examples of employees exempt from the overtime pay
requirements only:
- Certain commissioned employees of retail or service establishments;
- Auto, truck, trailer, farm implement, boat, or aircraft
salespersons employed by non‑manufacturing establishments
primarily engaged in selling these items to ultimate purchasers;
- Auto, truck, or farm implement parts‑clerks and
mechanics employed by non‑manufacturing establishments
primarily engaged in selling these items to ultimate purchasers;
- Railroad and air carrier employees, taxi drivers, certain employees
of motor carriers, seamen on American vessels, and local delivery
employees paid on approved trip rate plans;
- Announcers, news editors, and chief engineers of certain
non‑metropolitan broadcasting stations;
- Domestic service workers who reside in their employers' residences;
- Employees of motion picture theaters; and
- Farmworkers.
Certain employees may be partially exempt from the overtime pay
requirements. These include:
- Employees engaged in certain operations on agricultural commodities
and employees of certain bulk petroleum distributors;
- Employees of hospitals and residential care establishments that have
agreements with the employees that they will work 14‑day periods in lieu
of 7‑day workweeks (if the employees are paid overtime premium pay
within the requirements of the Act for all hours worked over eight in a
day or 80 in the 14‑day work period, whichever is the greater number of
overtime hours); and
- Employees who lack a high school diploma, or who have not completed
the eighth grade, who spend part of their workweeks in remedial reading
or training in other basic skills that are not job‑specific. Employers
may require such employees to engage in these activities up to 10 hours
in a workweek. Employers must pay normal wages for the hours spent in
such training but need not pay overtime premium pay for training hours.
The Act requires employers of covered employees who are not otherwise
exempt to pay these employees a minimum wage of not less than $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009. Youths under 20 years of age may be paid a
minimum wage of not less than $4.25 an hour during the first 90
consecutive calendar days of employment with an employer. Employers may
not displace any employee to hire someone at the youth minimum wage.
Employers may pay employees on a piece‑rate basis, as long as they
receive at least the equivalent of the required minimum hourly wage
rate. Employers of tipped employees (i.e., those who customarily and
regularly receive more than $30 a month in tips) may consider such tips
as part of their wages, but employers must pay a direct wage of at least
$2.13 per hour if they claim a tip credit. They must also meet certain
other conditions.
The Act also permits the employment of certain individuals at wage rates
below the statutory minimum wage under certificates issued by the
Department of Labor:
- Student learners (vocational education students);
- Full‑time students in retail or service establishments, agriculture,
or institutions of higher education; and
- Individuals whose earning or productive capacities for the work to
be performed are impaired by physical or mental disabilities, including
those related to age or injury.
The Act does not limit either the number of hours in a day or the number
of days in a week that an employer may require an employee to work, as
long as the employee is at least 16 years old. Similarly, the Act does
not limit the number of hours of overtime that may be scheduled.
However, the Act requires employers to pay covered employees not less
than one and one‑half times their regular rates of pay for all hours
worked in excess of 40 in a workweek, unless the employees are otherwise
exempt.
Employers must keep records on wages, hours, and other information as
set forth in the Department of Labor's regulations. Most of this data is
the type that employers generally maintain in ordinary business
practice.
The Act prohibits performance of certain types of work in an employee's
home unless the employer has obtained prior certification from the
Department of Labor. Restrictions apply in the manufacture of knitted
outerwear, gloves and mittens, buttons and buckles, handkerchiefs,
embroideries, and jewelry (where safety and health hazards are not
involved). Employers wishing to employ homeworkers in these industries
are required to provide written assurances to the Department of Labor
that they will comply with the Act's wage and other requirements, among
other things.
The Act generally prohibits manufacture of women's apparel (and jewelry
under hazardous conditions) in the home except under special
certificates that may be issued when the employee cannot adjust to
factory work because of age or disability (physical or mental), or must
care for a disabled individual in the home.
Special provisions apply to state and local government employment.
It is a violation of the Act to fire or in any other manner discriminate
against an employee for filing a complaint or for participating in a
legal proceeding under the Act. The Act also prohibits the shipment of
goods in interstate commerce that were produced in violation of the
minimum wage, overtime pay, child labor, or special minimum wage
provisions.
Employees may find out how to file a complaint from local
Wage and Hour Division offices,
or from the program's toll-free help line at 1-866-4USWAGE.
In addition, an employee may file a private suit, generally for the
previous two years of back pay (three years in the case of a willful
violation) and an equal amount as liquidated damages, plus attorney's
fees and court costs.
More detailed information about the FLSA, including copies of
explanatory brochures and regulatory and interpretative materials, is
available on the Wage and Hour Division's Web site,
or by contacting the local Wage
and Hour Division offices. Another compliance assistance resource,
the elaws Fair Labor
Standards Act Advisor, helps answers questions about workers and
businesses that are subject to the FLSA. For additional assistance,
contact the Wage and Hour Division help line at 1-866-4USWAGE.
The Department of Labor uses a variety of remedies to enforce compliance
with the Act's requirements. When Wage and Hour Division investigators
encounter violations, they recommend changes in employment practices to
bring the employer into compliance, and they request the payment of any
back wages due to employees.
Willful violators may be prosecuted criminally and fined up to $10,000.
A second conviction may result in imprisonment. Employers who willfully
or repeatedly violate the minimum wage or overtime pay requirements are
subject to civil money penalties of up to $1,000 per violation.
When the Department of Labor assesses a civil money penalty, the
employer has the right to file an exception to the determination within
15 days of receipt of the notice. If an exception is filed, it is
referred to an Administrative Law Judge for a hearing and determination
as to whether the penalty is appropriate. If an exception is not filed,
the penalty becomes final.
The Department of Labor may also bring suit for back pay and an equal
amount in liquidated damages, and it may obtain injunctions to restrain
persons from violating the Act.
State laws also apply to employment subject to this Act. When both this
Act and a state law apply, the law setting the higher standards must be
observed.
1 - These regulations were revised effective August 23, 2004.
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The Employment Law Guide is offered as a public resource. It
does not create new legal obligations and it is not a substitute for the U.S.
Code, Federal Register, and Code of Federal Regulations as the official sources
of applicable law. Every effort has been made to ensure that the information
provided is complete and accurate as of the time of publication, and this will
continue. Later versions of this Guide will be offered at
www.dol.gov/compliance or by calling our Toll-Free
Help Line at 1-866-4-USA-DOL (1-866-487-2365). |
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