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Fair Labor Standards Act

The Fair Labor Standards Act (FLSA) , which prescribes standards for the basic minimum wage and overtime pay, affects most private and public employment. It requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay of one-and-one-half-times the regular rate of pay. For nonagricultural operations, it restricts the hours that children under age 16 can work and forbids the employment of children under age 18 in certain jobs deemed too dangerous. For agricultural operations, it prohibits the employment of children under age 16 during school hours and in certain jobs deemed too dangerous. The Act is administered by the Employment Standards Administration's Wage and Hour Division within the U.S. Department of Labor.

Recordkeeping

Every employer covered by the Fair Labor Standards Act (FLSA) must keep certain records for each covered, nonexempt worker. There is no required form for the records, but the records must include accurate information about the employee and data about the hours worked and the wages earned. The following is a listing of the basic records that an employer must maintain:

• Employee's full name, as used for social security purposes, and on the same record, the employee's identifying symbol or number if such is used in place of name on any time, work, or payroll records;

• Address, including zip code;

• Birth date, if younger than 19;

• Sex and occupation;

• Time and day of week when employee's workweek begins. Hours worked each day and total hours worked each workweek;

• Basis on which employee's wages are paid;

• Regular hourly pay rate;

• Total daily or weekly straight-time earnings;

• Total overtime earnings for the workweek;

• All additions to or deductions from the employee's wages;

• Total wages paid each pay period;

• Date of payment and the pay period covered by the payment.

The Fair Labor Standards Act applies to "employees who are engaged in interstate commerce or in the production of goods for commerce, or who are employed by an enterprise engaged in commerce or in the production of goods for commerce", unless the employer can claim an exemption from coverage.

Generally, an employer who does at least $500,000 of business or gross sales in a year satisfies the commerce requirements of the FLSA, and therefore that employer's workers will be subject to the FLSA's protections if none of the other exemptions apply. Several exemptions exist that relieve an employer from having to meet the statutory minimum wage, overtime, and record-keeping requirements.

The largest exceptions apply to the so-called "white collar" exemptions that are applicable to professional, administrative and executive employees. Exemptions are narrowly construed; an employer must prove that the employees fit "plainly and unmistakeably" within the exemption's terms.

The FLSA applies to "any individual employed by an employer" but not to independent contractors or volunteers because they are not considered "employees" under the FLSA. Still, an employer cannot simply exempt workers from the FLSA by calling them independent contractors, and many employers have illegally misclassified their workers as independent contractors.

Some employers similarly mislabel employees as volunteers. Courts will look at the "economic reality" of the relationship between the putative employer and the worker to determine whether the worker is, in fact, an independent contractor. Courts use a similar test to determine whether a worker was concurrently employed by more than one person or entity; commonly referred to as "joint employers."

For example, a farm worker may be considered jointly employed by a labor contractor (who is in charge of recruitment, transportation, payroll, and keeping track of hours) and a grower (who generally monitors the quality of the work performed, determines where to place workers, controls the volume of work available, has quality control requirements, and has the power to fire, discipline, or provide work instructions to workers).

Presuming an employee is not exempt from overtime, there are many instances in which overtime is not paid properly, including when an employee is not paid for travel time between job sites, activities before their shift starts or after it ends, and activities to prepare for work that are central to work activities.

If an employee is entitled to overtime they must be paid one and a half times the employee's "regular rate of pay" for all hours worked over 40 in the same work week.

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