What You Should Know about the Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) exists to protect employees from unfavorable work conditions and guarantee them certain rights. It also contains regulations which assist in classifying certain employees as exempt or non-exempt from various provisions of the law.
Classifying Employees Based on Salary Level and Job Duties
- Covered, non-exempt employees are subject to overtime pay and a minimum wage of at least $7.25 per hour, as of July 24, 2009. Overtime pay must be at least 1.5 times the employee's regular rate of pay for each hour worked over 40 in a workweek.
- Employee duties dictate the determination of exempt status under the FLSA, in addition to salary level and salary basis. For example, certain employees meeting the requirements of the executive, administrative, professional, or computer employee exemption must be on a weekly guaranteed salary of at least $455.
- An employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage.
- If the employee's tips combined with the employer's direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference. Many states, however, require higher direct wage amounts for tipped employees.
- Before an employer can use a tip credit, they must provide certain information to their employees. This includes the employee's right to keep all tips they earn, unless employees agree to pool their tips under a valid tip pooling agreement.
Recordkeeping and Posting Requirement
- Every covered employer must keep certain records for each worker. The Act requires no particular form for the records, but does require that the records include certain identifying information about the employee and data about the pay period and the wages earned. There are additional recordkeeping requirements for non-exempt workers regarding hours worked, straight-time earnings, and any overtime pay, where applicable. The law requires this information to be accurate.
- Employers may use any timekeeping method they choose. For example, they may use a time clock, have a timekeeper keep track of employee's work hours, or tell their workers to write their own times on the records. Any timekeeping plan is acceptable as long as it is complete and accurate.
- The official poster "Employee Rights under the Fair Labor Standards Act" must be displayed in plain view of the employees on the job site.