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- What the FLSA covers
- Coverage can arise through the enterprise or the employee
- The federal minimum wage is $7.25
- Overtime usually begins after 40 hours
- Exempt and nonexempt are legal classifications
- Hours worked include more than scheduled time
- Employers must keep accurate records
- The Act restricts child labor
- Retaliation is prohibited
- Federal law is often only the floor
- Sources
Key Facts
- Federal level: The Fair Labor Standards Act establishes federal minimum-wage, overtime, recordkeeping, and child-labor standards.
- Federal level: Covered nonexempt employees generally must receive at least $7.25 per hour and overtime after 40 hours in a workweek.
- Federal level: Coverage and exemption are separate questions; a salary or job title alone does not remove FLSA protection.
- Federal and state: When another applicable law provides greater wage protection, the more protective standard generally governs.
The Fair Labor Standards Act, usually called the FLSA, is the main federal law setting baseline rules for wages and hours in the United States. Enacted in 1938 and amended many times, it addresses minimum wage, overtime pay, employer records, and youth employment.
What the FLSA covers
The FLSA does not regulate every workplace subject. It does not create a general right to vacation, holiday pay, meal breaks, severance, or raises. Its central protections concern pay for covered work, required records, restrictions on child labor, and retaliation for asserting rights under the Act.
The U.S. Department of Labor’s Wage and Hour Division administers and enforces most FLSA requirements. The statute also permits specified private lawsuits and authorizes remedies that may include unpaid wages, liquidated damages, and other relief.
Coverage can arise through the enterprise or the employee
Enterprise coverage generally applies when a business has employees engaged in commerce or handling goods moved in commerce and meets the Act’s annual-sales threshold, currently $500,000, unless a named category is covered without that threshold. Hospitals, institutions caring for residents, schools, and public agencies are among the specially covered enterprises.
Even when enterprise coverage does not apply, an individual employee may be covered through regular work in interstate commerce or producing goods for interstate commerce. Activities such as processing interstate transactions, regularly communicating across state lines, or handling interstate shipments can matter.
Coverage is only the first question. The worker must also be an employee under the Act, and a particular exemption may remove one or more protections.
The federal minimum wage is $7.25
Section 6 generally requires covered employees to receive at least $7.25 per hour, a federal rate in effect since July 24, 2009. Special rules address tipped employees, youth wages, certain workers with disabilities under valid certificates, and other defined circumstances.
The FLSA measures compliance over the applicable workweek and requires payment for all compensable hours worked. An agreement to work “off the clock” does not erase the employer’s obligation when the employer requires or permits the work.
The broader guide to federal wage standards explains the federal floor and its relationship to more protective state rates.
Overtime usually begins after 40 hours
Covered nonexempt employees generally must receive at least one and one-half times their regular rate for hours over 40 in a workweek. The FLSA does not generally require overtime merely because work occurs on a weekend, holiday, or more than eight hours in one day.
The regular rate can include more than an employee’s stated hourly wage. Nondiscretionary bonuses, commissions, shift differentials, and other compensation may enter the calculation unless the statute permits exclusion.
Employers generally cannot average hours across two workweeks to avoid overtime. A private agreement also cannot waive statutory overtime for compensable hours the employer permits or requires.
Exempt and nonexempt are legal classifications
The Act contains exemptions for defined categories of employment. The familiar executive, administrative, and professional exemptions require specified salary-basis, salary-level, and duties conditions; other exemptions use different tests.
Being salaried does not automatically mean exempt, and being paid hourly does not answer every exemption question. Actual duties and the elements of the applicable exemption control, not a title chosen by the employer.
The guide to a nonexempt employee explains the current federal white-collar tests and salary threshold.
Hours worked include more than scheduled time
Compensable time generally includes work the employer requires or permits, even if it was not requested in advance. Depending on the facts and regulations, waiting time, training, travel between job sites, pre-shift tasks, or work performed remotely may count.
Bona fide meal periods and qualifying off-duty time may be excluded, but short rest periods the employer provides generally count as hours worked. Labels in a handbook do not override the facts of how the time is used.
Employers must keep accurate records
Covered employers must preserve records identifying employees and documenting hours and wages. Basic records include daily and weekly hours, the workweek’s starting time, pay basis, regular rate, straight-time and overtime earnings, additions and deductions, total wages, and payment dates.
The law does not require one particular timekeeping system. The records must be complete and accurate, whether time is captured through a clock, software, schedules with exceptions, or another reliable method.
The Act restricts child labor
Federal child-labor provisions restrict the occupations and hours of work for minors. Hazardous-occupation rules generally protect workers under 18, while additional hours-and-occupation restrictions generally apply to 14- and 15-year-olds.
Agricultural and nonagricultural employment follow different provisions and exceptions. State child-labor law may be more protective, so age alone does not answer whether a particular job or schedule is lawful.
Retaliation is prohibited
The FLSA prohibits discharging or otherwise discriminating against an employee because the employee filed a complaint, began or caused a proceeding, or testified or is about to testify in one. Retaliation protection is distinct from whether the underlying wage claim ultimately succeeds.
Federal law is often only the floor
States and localities may require a higher minimum wage, daily overtime, meal and rest periods, wage statements, or broader coverage. The FLSA does not excuse compliance with a more protective applicable rule.
The Act’s coverage, employee-status, exemption, hours-worked, and pay-calculation questions are separate. A correct analysis therefore identifies the worker, employer, workweek, compensation, duties, location, and each law that may apply.
Sources
- 29 U.S.C. § 203: FLSA definitions
- 29 U.S.C. § 206: Federal minimum wage
- 29 U.S.C. § 207: Hours and overtime
- 29 U.S.C. § 211: Investigations and records
- 29 U.S.C. § 212: Child-labor restrictions
- 29 U.S.C. § 215: Prohibited acts and retaliation
- Department of Labor Fact Sheet 23: Overtime
- Department of Labor Fact Sheet 21: Recordkeeping
