Federal Minimum Wage and Overtime Law – The Fair Labor Standards Act


What is the Fair Labor Standards Act (FLSA)?

The Fair Labor Standards Act (FLSA) is a federal law that affects most private and public employment.  The FLSA requires employers to pay covered employees who are not otherwise exempt at least the federal minimum wage and overtime pay for all hours worked over 40 in a work week. 

Covered employees must be paid for all hours worked in a workweek.  In general, compensable hours worked include all time an employee is on duty or at a prescribed place of work and any time that an employee is suffered or permitted to work.  This would generally include work performed at home, travel time, waiting time, training, and probationary periods.

Federal Minimum Wage = $5.85 per hour effective July 24, 2007; $6.55 per hour effective July 24, 2008; and, $7.25 per hour effective July 24, 2009.

Tipped employees may be paid $2.13 per hour by taking a tip credit for tips earned by the employee.  If the employees cash wages plus tips does not equal the Federal Minimum Wage rate per hour the employer must pay the difference.  The employer must comply with all rules for the tip credit to be valid. 

Overtime after 40 hours in a week = 1½ times an employee’s regular rate of pay

What does the Fair Labor Standards Act NOT require?

There are a number of employment practices which the FLSA does not regulate. For example, the FLSA does not require:

  1. vacation, holiday, severance, or sick pay;
  2. meal or rest periods, holidays off, or vacations;
  3. premium pay for weekend or holiday work;
  4. pay raises or fringe benefits;
  5. a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees;
  6. unemployment compensation; or,
  7. pay stubs or “W-2”s.

The FLSA does not provide wage payment or collection procedures for an employee’s usual or promised wages or for commissions in excess of those required by the FLSA. Also, the FLSA does not limit the number of hours in a day, or days in a week, an employee may be required or scheduled to work, including overtime hours, if the employee is at least 16 years old. However, some states do have laws covering some of these issues, such as meal or rest periods, or discharge notices. 

The above matters, which are not covered by the FLSA, are generally for agreement between the employer and the employees or their union.

 


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