FLSA Misconceptions: An FAQ for Employers
The Fair Labor Standards Act (FLSA) governs a wide variety of issues related to wage and hour laws for covered employers. The FLSA establishes the minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. Many companies have questions about the FLSA, as violations can lead to expensive fines and litigation. Here are answers to some of the most common queries.
What is the minimum wage?
Covered nonexempt employees are entitled to a federal minimum wage of $7.25 per hour, established July 24, 2009. It's important to note that many states and localities also set minimum wage requirements. While bills have been introduced in Congress since the 2009 increase to raise the federal minimum wage, to date, none have passed. Businesses should monitor ongoing discussions to stay abreast of any changes that might affect FLSA minimum wage guidelines.
Does the FLSA require employers to pay overtime?
Under the FLSA, for nonexempt employees, covered employers must pay overtime compensation at a rate of one and one-half times the employee’s regular rate of pay for those hours worked over 40 in a workweek. Workweeks are defined as a recurring and established period of seven consecutive 24-hour days. There are no stated maximums for the number of hours someone over age 18 may work in a week. No special provisions are made for weekend or holiday work; regulations address only situations where qualified employees work more than 40 hours. Please note states may have additional overtime requirements; where employers are covered by both laws, they must comply with the law most beneficial to the employee.
What are some common misconceptions about the FLSA?
Contrary to what many businesspeople believe, FLSA regulations do not require businesses to provide any of the following, per the Department of Labor (DOL) website:
• Benefits such as vacation time, sick pay or severance packages
• Holiday time-off or rest periods
• Overtime on weekends and holidays
• Raises or benefits
• Immediate payment of wages to fired employees
However, other federal and/or state legislation may impact these areas. It's important to consult a knowledgeable professional on the subject.
What are the FLSA recordkeeping requirements?
The FLSA has two key recordkeeping requirements. The first is that a poster outlining details of the FLSA must be displayed in all work locations. The second is that businesses keep records of certain employee information, including hours worked and payment information. The full requirements on FLSA recordkeeping are available from the DOL website.
What are the federal child labor laws?
Businesses that employ workers under the age of 18 need to be aware of specific FLSA regulations governing child labor. The regulations were put in place to ensure that children aren't doing hazardous work and that working doesn't have a negative impact on their health or education. There are specific requirements for the numbers of hours, payment, and types of jobs allowed. The DOL provides a dedicated resource that can help businesses navigate this important issue. Employers are also encouraged to review applicable state laws on this topic.
Employers may have many misconceptions about the actual requirements associated with the FLSA. Understanding the FLSA is an essential part of managing your business, since failing to comply with the FLSA can have serious and often expensive consequences. Partner with an experienced HR outsourcing provider or contact a knowledgeable employment law attorney to help your business comply with the FLSA and other pertinent employment laws.