Being an employee comes with a range of responsibilities, including completing daily tasks, adhering to company policy, and following any and all safety standards and protocol that may apply to the position. But, duties aside, it’s employers who have a very important responsibility to uphold when it comes to taking care of their workers; they must consistently guarantee that their business is following the Fair Labor Standards Act (FLSA) to the letter.
For new operations or those scaling and undergoing substantial staffing changes, it can be a hard set of rules to navigate, which is why we’re here to both clarify the standards and clear up any common misconceptions about the act.
Definition of the Fair Labor Standards Act
The United States Department of Labor defines the Fair Labor Standards Act as a set of standards that “establishes minimum wage, overtime pay, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in Federal, States, and local governments.”
In most cases, the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) administers and enforces the FLSA. The only non-government employees (those who do not work in the executive or legislative branches) who work under a special set of labor rules are emergency and/or volunteer public safety professionals such as fire personnel, law enforcement, and other individuals in related fields.
Key Requirements of the Fair Labor Standards Act
Because the FLSA covers such a wide range of U.S.-based employees, all of the general standards must be followed by the employer to guarantee that their employment conditions are fair. Before we get into the nitty-gritty, let’s take a look at the basic requirements entailed in the FLSA:
- Federal minimum wage: Covered, non-exempt workers (more details on what this means later) must be paid a minimum of $7.25/hour. Depending on the state in which the work is performed, the minimum wage will be higher (this is true in 29 of the 50 U.S. states).
- Paydays: All wages must be paid by or before the employee’s designated payday.
- Overtime: Non-exempt employees must receive overtime pay after working 40 hours/week. When work exceeds the 40/hours week, the employee is entitled to time and a half. Note: not all employees are granted the ‘non-exempt’ status.
- Employer-governed deductions: If an employer is entitled to deduct funds from an employee’s paycheck due to damaged inventory, uniform costs, etc., the hourly must not dip below an average of $7.25/hour in any pay period. This also holds true for instance in which overtime pay is included.
- Tipped employees: Employees who receive more than $30/month in tips are considered “tipped employees.” Wait staff and bartenders often fall into this category, for example. In this situation, employers must pay these workers a federal minimum wage of $2.13/hour (note: this number is much higher in many states). Tips combined with their hourly wages must amount to total earnings of $7.25 per hour (or the prevailing minimum wage) or more. If this does not occur during a certain pay period, the employer is responsible for paying the employee the difference.
- Subminimum wage provisions and youth minimum wage provisions: In situations where the employee is a student-learner (intern/vocational student) or a full-time student who is working in agricultural, service, or retail establishments, the employer may be able to pay less than the federal minimum wage (currently $7.25/hour). This is also true for employees who are unable to perform certain duties due to mental and/or physical impairments, as well as individuals 20 years-old or younger who are completing their first 90 consecutive days of employment. In all cases, employers must obtain approval from the WHD first.
- Nursing mothers: A detailed set of rules apply to businesses employing nursing mothers. Though there are exceptions depending on employee status and company size, generally, nursing mothers must be given adequate nursing break time during the day, in a non-bathroom which is set up for nursing purposes.
- Child labor provisions: The FLSA includes special provisions involving employees under the age of 18 and full-time high school students. Depending on the nature of the work, children can begin working nonhazardous, nonmanufacturing, and nonmining jobs after they turn 14, provided that the employer only schedules them outside of school hours, at a maximum of 18 hours in a school week. There are exceptions for children working in fields such as agriculture, entertainment, newspaper-delivery, etc.
The Difference Between a Non-Exempt and an Exempt Employee
As mentioned, certain provisions, such as overtime pay, don’t correspond to all categories of workers. In terms of straight overtime (over 40 hours/week), the only employees who must receive it are the ones who hold non-exempt statuses.
To put it simply, non-exempt employees generally consist of hourly workers, though there are exceptions to the rule. On the other hand, exempt employees, as stipulated by the FLSA, usually fall into these categories:
- Executives, administrators, and professionals
- Elementary and secondary school teachers
- Outside sales employees
- Certain IT employees
- Certain employees of seasonal and recreational establishments
- Certain fishing industry and agricultural employees
- Casual babysitters and caregivers
In addition to the above list, there are further overtime exemptions for specific hourly workers who work jobs that are less predictable in nature, such as emergency workers, healthcare workers, domestic service workers, news editors, etc. Some of these cases are considered by the WHD on a case-to-case basis based on whatever is best for both the employer and the employee.
Now that you have a better grasp on the FLSA, take a look at your HR department’s procedures to confirm that your company is complying with all relevant labor standards.