The Fair Labor Standards Act - How it Affects Employers

Fair Labor Standards Act
Fair Labor Standards Act. Hero Images/Getty Images


The Fair Labor Standards Act (FLSA) is a federal law, sometimes called the "Wage and Hour Bill," which was enacted by Congress in 1938. FLSA provisions are administered by the Wage and Hour Division of the U.S. Department of Labor. The law applies to employers who are engaged in "interstate commerce" and it regulates minimum wages, overtime, and child labor laws, as well as other laws.

Who is covered

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). You can use a quick quiz on the DOL website to see if your business must comply with the provisions of this law.

The major provisions of the FLSA:
Minimum WageThe FLSA sets the minimum wage rate for workers, some U.S. states have different wage rates.

Overtime Provisions The FLSA requires that employees be paid overtime at the rate of 1 1/2 times regular pay for any hours worked over 40 hours in a week. Some employees are exempt from overtime because of the nature of their jobs (managerial, supervisory, or professional work).

Youth Employment The FLSA also regulates employment of children under the age of 16, limiting the hours they may work and the kind of work they may perform.For more information on youth employment rules, go to the Department of Labor's Youth and Labor website for employers.

Also Known As: Wage and Hour Law

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