Everything You Need to Know About the Fair Labor Standards Act (FLSA)
Are you still working maximum hours for minimum pay?
If so, it’s important to understand your worker’s rights and how to exercise them. As an employee, you could be pulling more than your weight at the office and should be compensated as such.
This is where the Fair Labor Standards Act (FLSA) comes in.
Designed to protect employees from unbalanced labor conditions, it’s a critical piece of legislation that could help you see the pay and proper treatment you deserve.
Today, we’re diving deep into the FLSA, explaining its clauses, definitions, and terms. We’ll also share how you can get in touch with a professional attorney who can help you leverage it to the fullest extent.
Ready to learn more? Let’s get started.
What is the Fair Labor Standards Act?
Before we go too far into its specific layout, let’s cover the basics of what the FLSA entails.
The Fair Labor Standards Act is a federal law. It provides guidelines that must follow to ensure all employees are treated as fairly as possible for the work they put forth. Specific standards exist to govern the following entities:
- Minimum wage
- Overtime pay eligibility
- Child labor standards
FLSA standards affect both full-time and part-time workers. In addition to the private sector, they also span to federal, state and local governments.
History of the FLSA
President Franklin Roosevelt established the FLSA on June 25, 1938, as part of his “New Deal” platform.
When he signed it into being, it quickly joined the ranks of Social Security (another New Deal law) as being one of the most transformative changes of employment culture to date.
The legislative action couldn’t have been timelier.
At the time of the signing, millions of children across America, some as young as five, were working in treacherous and dangerous conditions. From coal mines to glass factories, they were putting in long hours and risking their lives, with most working up to 18 hours a day!
Yet, their paychecks were hardly representative of their efforts. Most barely tipped $1 per hour. At the same time, adult workers were putting in equally long, 12-hour days at high-intensity job sites including steel factories, with a majority working seven days a week.
Since its inception, the FLSA has helped workers across America achieve the same level of rights that these early employees fought so hard to achieve. However, you could be missing out on these privileges and not realize it.
That’s why it helps to know exactly what’s covered under the FLSA and what isn’t.
Types of FLSA Coverage
The FLSA provides two different types of coverage. Let’s review each in greater detail.
If your company earns at least $500,000 per year and employs two or more people, you’re included in FLSA Enterprise Coverage. You’re also covered if you work for any of the following institutions:
- A school
- The government
- A hospital
- A business that provides medical or nursing services
Even if you don’t fall into the eligibility terms for Enterprise Coverage, the FLSA still applies to you if you’re engaged in interstate commerce on a regular basis.
What does this mean?
Interstate commerce is any form of communication or transaction that crosses state boundaries or involves more than one state.
You don’t have to physically sell the goods yourself to qualify. It covers you even if you just routinely talk to someone in a different state! You’re also protected if you work (in any capacity) in a building where people manufacture goods to ship outside of your state.
While the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL) administers and enforces the FLSA, there are special provisions made for the following circumstances under state and local governments:
- Fire protection activities
- Law enforcement activities
- Volunteer services
In addition, there are other exemptions to FLSA standards that apply based on specific types of work or businesses. Moreover, many states have enacted their own provisions to complement the FSA, including:
- Higher minimum wage standards
- More stringent overtime provisions
- More specific child labor protocols
To keep things simple, we’re covering the basic rules that apply to the general sector.
Basic Wage Standards Under the FLSA
On July 24, 2009, the federal minimum wage increased to $7.25 per hour under the FLSA. While states are prohibited from lowering this rate, they can pass separate legislation to increase it. For instance, the minimum wage in Florida is $8.05 per hour.
Employees who receive more than $30 per month in tips must receive a minimum of $2.13 per hour in direct wages. In addition, employees younger than 20 years old must receive at least $4.25 per hour during their first 90 days on the job.
Note that if an employee is over the age of 16, the FLSA does not put a limit on the hours that he or she can work in a day or week, including overtime hours. There are, however, industry-specific caps on hours, such as the 14-hour shift limit for truck drivers.
The law requires that non-exempt, covered workers must receive this wage. The only variations from this requirement are the special provisions that apply to employees working in American Samoa or the Commonwealth of the Northern Marina Islands.
Keep in mind that there may be instances in which managers deduct from an employee’s wages to cover their required workplace expenses, such as uniforms or tools. Even if this is the case, the deductions can’t lower that employee’s wage beyond the minimum $7.25 threshold.
Calculating Overtime Pay
In addition to the minimum wage, all non-exempt workers must receive appropriate overtime pay. This must be paid at a rate of no less than 1.5 times their regular hourly rate for every hour worked over the standard 40-hour week.
To determine an employee’s hourly rate, managers can divide their total pay, including their shift pay and any bonuses, by 40 hours.
All employees must receive the wages they’re due (including overtime pay) by the regular payday for the applicable pay period. While calculating yours on your timesheet, make sure you aren’t short-changing yourself.
In addition to clocking in extra hours at the office, you could be working overtime and not even realize it. Some activities to time-track include:
- Working at home
- Waiting on work
- Preparing, cleaning, and maintaining equipment
- Attending safety courses, training or professional development
- Attending conflict resolution discussions
- Attending work-related meetings
- Traveling for work
- Performing charity work at the request of an employer
- Receiving medical attention while at work
Classifying Non-Exempt Employees
By law, a non-exempt employee is anyone who earns less than $23,660 a year or $455 per week. For the most part, these are non-managerial employees, including:
- Commissioned employees (sales professionals)
- Manual laborers
- Public servants (e.g. police teams and firefighters)
- First responders
- Hourly workers
Classifying Exempt Employees
Often, managers will attempt to skew the system, classifying an employee with a managerial to claim exemption and avoid paying overtime. If this comes to light, these organizations could face serious consequences, including criminal prosecution and hefty fines.
The following details are required before exemption is granted:
- The employee’s total wages
- How the employee receives those wages
- The type of work that the employee performs
To classify an employee as exempt, managers must be able to show that the employee makes at least $455 per week, receives a salary, and matches at least one of the following descriptions:
- Executive, administrative, and professional employees (e.g. outside salespersons, academic personnel, certain computer-related roles)
- Employees working in seasonal amusement or recreational facilities
- Farmworkers working for anyone who used 500 or fewer “man-days” of labor
- Casual babysitters
- Companions to the elderly
Personnel who meet the above requirements may not be eligible for overtime pay provisions, minimum wage requirements, or both.
FLSA Recordkeeping Requirements
It’s critical that managers keep detailed records of employee time on the job. The FLSA requires it, and it can help avoid disputes down the road.
At the bare minimum, employers should maintain the following records about each employee:
- Full name and contact information
- Social security number
- Birthdate (if younger than 19)
- Job title
- When their workweek starts (time and day)
- Total hours worked each day and each week
- Pay rate per hour
- Total wages earned each pay period
- Wage payment basis (e.g. “per week”, “per hour” or “per project)
- Daily or weekly base earnings
- Overtime earnings accrued over the workweek
- Any wage changes (additions or deductions)
- Date and timeline for pay periods
If a non-exempt employee feels that he or she was not paid adequately for base work or overtime, these records can help verify accusations. Managers should keep payroll records for at least three years. They should also keep crime cards, work schedules, and wage change records for at least two years.
Common Overtime Scams
We’ve touched on the fact that it’s not uncommon for managers to undermine the FLSA system, conducting overtime scams to save money.
As a worker, it’s vital that you’re on the lookout for these common tactics. In addition to misclassifying workers with a more elite job title, let’s review some of the other schemes used.
Requiring Employees to “Clock Out”
Is there still work to be done at closing time? Your employer shouldn’t insist that you clock out at the end of your shift if you still intend to work.
You’re entitled to short breaks throughout the day to restore your mental and physical fitness. Employers cannot deduct breaks that last between five and 20 minutes from your total hours worked.
Withholding Overtime Over Approval
Your employer cannot refuse you overtime pay just because you forgot to submit an official request to work more than your standard hours.
Independent Contractor Classification
Some employers will try to avoid paying overtime by classifying workers as “independent contractors.” Understand that this doesn’t disqualify you from receiving your due compensation.
You will, however, need to know the answers to the questions below to identify whether or not you’re a contractor or a full-time employee:
- Does your employer control how you perform your job?
- How are you paid?
- Does the employer supply your work-related tools and reimburse you for job expenses?
- Do you receive benefits from the contractor?
- Is there a written contract in place that identifies you as an independent contractor?
These questions can help determine the nature of your work, as well as your relationship with your employer. While there is no exact formula to classify a worker as an independent contractor or an employee, the answers can help clarify this distinction.
Misapplying the Half-Time Method
In some cases, managers will pay overtime to salaried employees who are on a fixed payroll but happen to have hours that change on a regular basis.
In this case, managers can calculate overtime at half of that employee’s hourly rate, rather than the 1.5x calculation of FSLA overtime applied to non-exempt workers. This is also called the fluctuating workweek method or Chinese overtime.
Sometimes, managers will shortchange non-exempt employees by paying out their overtime based on the same (smaller) rate.
Any time you’re paid overtime as a non-exempt employee, make sure it’s for the full amount rather than the half-time overtime calculation.
If you feel that you’ve fallen victim to any of the above scams, our attorneys can help. We specialize in Fair Labor Standards Act lawsuits and are well-versed in the specificities of the law.
Making the Fair Labor Standards Act (FLSA) Work For You
We expect to receive appropriate compensation for any work that we perform, regardless of whether or not that work took place during normal business hours.
That’s why it can be disheartening and even debilitating for non-exempt employees to lose out on their deserved overtime earnings. While the Fair Labor Standards Act (FLSA) was designed to protect these privileges, it’s unfortunately not failproof.
There are some instances in which managers find underhanded ways to bypass or even ignore these federal mandates. When this happens, you aren’t defenseless.
Contact our team of qualified and experienced overtime attorneys today. We’ll help you bypass the legal jargon and cut straight to your rights. Then, we’ll help you fight for them, one hour at a time.