Question

information regarding the Fair Labor Standards Act (FLSA). Please discuss each of the important elements of this act, who is covered, and the impact it can have on organizations.

Answer 1

The Fair Labor Standards Act (FLSA) is a U.S. law that is intended to protect workers against certain unfair pay practices. As such, the FLSA sets out various labor regulations regarding interstate commerce employment, including minimum wages, requirements for overtime pay, and limitations on child labor. The FLSA—which was passed in 1938 and has seen numerous changes—is one of the most important laws for employers to understand, as it sets out a wide array of regulations for dealing with employees, whether salaried or paid by the hour.

KEY TAKEAWAYS

The FLSA protects workers against unfair practices.

FLSA rules specify when workers are considered on the clock and when they should be paid overtime.

Employees are deemed either exempt or nonexempt with regard to the FLSA.

How the Fair Labor Standards Act (FLSA) Works

The FLSA specifies when workers are “on the clock” and which times are not paid hours. There are also elaborate rules concerning whether employees are exempt or nonexempt from the FLSA overtime regulations. The law requires overtime to be paid at 1.5 times the regular hourly rate (“time-and-a-half”) for all hours worked in excess of 40 hours during a seven-day workweek

The FLSA applies to workers who have an employer and are engaged in interstate commerce or in the production of goods for commerce; it also applies to workers who are employed by an enterprise engaged in commerce or the production of goods for commerce. Further included are domestic service workers (housekeepers, cooks, full-time babysitters) and employees of hospitals; schools for mentally or physically disabled or gifted children; educational institutions at any level, from preschools to universities; and public agencies.3 4

It does not apply to independent contractors or volunteers because they are not considered employees.5 Employers that have at least $500,000 per year in gross sales or other business are subject to the requirements of the FLSA, which means that their employees are eligible for FLSA protections.

Fair Labor Standards Act and Workers

Nonexempt employees are entitled to overtime pay, while exempt employees are not. Most FLSA-covered employees are nonexempt. Some hourly workers are not covered by the FLSA but are subject instead to other regulations.2 For example, railroad workers are governed by the Railway Labor Act, and truck drivers fall under the purview of the Motor Carriers Act.

The FLSA applies only to employers whose annual sales total $500,000 or more or who are engaged in interstate commerce. You might think that this would restrict the FLSA to covering only employees in large companies, but, in reality, the law covers nearly all workplaces.