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 U.S. federal labor laws? Even a company as big as Disney can run afoul of these laws. Violations of the Fair Labor Standards Act (FLSA) caused Disney to have to pay $3.8 million in back wages in 2017 to Florida employees. Specifically, the violations related to

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

 

What Is the Fair Labor Standards Act? 

The Fair Labor Standards Act (FLSA) is a federal law, sometimes called the "Wage and Hour Bill," that Congress enacted in 1938. FLSA provisions are administered by the Wage and Hour Division of the US 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 (FLSA) 

The Department of Labor applies the FLSA 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....." 

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 US states have different wage rates. Is your business meeting these minimum wage requirements? TheBalance gives more information about federal and state minimum wage rates. 

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. You must also track wages of employees subject to overtime (using  a time card or time sheet, for example), and you must keep records.  

Some employees are exempt from overtime because of the nature of their jobs (managerial, supervisory, or professional work). But some lower-paid exempt employees must be paid overtime; check the overtime regulations for details. 

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 US 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.

There are a variety of posters for various federal labor laws

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.