The Fair Labor Standards Act (FLSA) and Employers

Minimum Wage, Youth Employment, OSHA, FMLA, Posters - And More

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

Do you know the federal labor laws? Even a company as big as Disney can run afoul of these laws. Recent (2017) violations of the Fair Labor Standards Act (FLSA) caused Disney to have to pay $3.8 million in back wages to Florida employees. 

Specifically, the violations related to: 

If large businesses can fall afoul of the FLSA, so can your business.


In this article, we'll look at the primary law that governs employees, The Fair Labor Standards Act, to help you make sure your business is meeting all the requirements of this law. 

What is the Fair Labor Standards Act? 

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.

Employment covered by the Fair Labor Standards Act

The Department of Labor says: 

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). 

Since most companies do business on the internet, almost every business with employees in the U.S. is covered by this law. 

A Checklist: Is Your Business Meeting These Requirements? 

Minimum Wage Rates - Federal and States

The FLSA sets the minimum wage rate for workers, but some U.S. states have different wage rates.

Is your business meeting these minimum wage requirements? See this article about federal and current wage rates by Allison Doyle, Job Searching Expert. 

The higher of state and federal minimum wage rates must be paid. If your state has a higher minimum wage rate than the federal rate, you must pay employees at the higher state rate. 

Overtime Provisions and New Overtime Rates

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. You can always be more generous in payment of overtime, but you must at least pay the minimum. Wages of employees subject to overtime must be tracked and records must be kept. 

Some employees are exempt from overtime because of the nature of their jobs (managerial, supervisory, or professional work). 

UPDATE: The following new regulation is not yet in effect.  The proposed regulation requires that lower-paid exempt employees must be paid overtime at a higher rate. Check out this article about the new overtime regulations. Until the new regulations are finalized and effective, consult your attorney about how you should pay exempt employees. 

Youth Employment and Child Labor Laws

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.

Posters Required at Most U.S. Workplaces

Most U.S. businesses with employees must provide information to employees. The Wage and Hour Division requires  posters to be used for this purpose. Even if you have just one employee, you must place these posters in a prominent place. 

If you have employees who work online, you should send them electronic copies of the required posters. 

The Family and Medical Leave Act for Employee Time Off

This law, enacted in 1993, provides for time off for employees who have family or medical issues that require them to miss work. The DOL has an employer's guide to the FMLA to help you determine what your business must do to comply with this law. 

What Else Does the Wage and Hour Division Do? 

The Wage and Hour Division provides information to employers to help them stay on top of the ever-changing laws and regulations governing employment.

The WHD also provides information on employer rights and responsibilities, and guidance for new employers. 

For More Information

Here's a comprehensive list of all U.S. federal labor laws, from TheBalance. also has more information about what posters are required for various federal labor laws.