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Summary: Under the FLSA, non-exempt employees must be paid at least the federal minimum wage and receive overtime pay at one and a half times their regular rate of pay for hours worked beyond 40 per week.
Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) is a US federal law established in 1938 to regulate minimum wage, overtime pay eligibility, recordkeeping, and child labor standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments. Under the FLSA, non-exempt employees must be paid at least the federal minimum wage and receive overtime pay at one and a half times their regular rate of pay for hours worked beyond 40 per week.
What are the key provisions of the FLSA?
The FLSA establishes key regulations for US employers regarding minimum wage, overtime pay, record-keeping, and youth employment standards.
Here are the main provisions:
- Minimum wage: The federal minimum wage in the US remains at $7.25 per hour as of 2024. This rate has been unchanged since July 24, 2009. However, many states and localities have set higher minimum wages. For instance, in 2024, the minimum wage in states like California, New York, and Washington is significantly higher than the federal rate.
- Overtime pay: Employees must receive overtime pay of at least one and a half times their regular pay rate for hours worked beyond 40 per week.
- Recordkeeping: Employers must maintain accurate employment records for each non-exempt worker, including hours worked and wages paid.
- Youth employment: The FLSA also contains provisions designed to protect the educational opportunities of minors and prohibit their employment in jobs with conditions detrimental to their health or well-being.
How does the FLSA determine overtime eligibility for employees?
The FLSA determines overtime eligibility based on employee classification. To qualify for overtime, an employee must be non-exempt. This status typically applies to workers who earn less than $684 per week ($35,568 annually) and are paid on an hourly basis. Also, the nature of the work should not involve executive, administrative, or professional duties as defined by FLSA guidelines. Eligible employees are entitled to one and a half times their regular pay rate for hours worked beyond 40 in a single workweek.
What are the recordkeeping requirements under the FLSA?
Employers must maintain accurate records for each non-exempt worker under the FLSA, which include details such as:
- The employee’s full name, Social Security number, address, birth date (if younger than 19), and gender
- The employee’s occupation
- The time and day of the week when the employee’s workweek begins
- The hours worked each day and total hours worked each workweek
- The basis on which employee’s wages are paid (e.g., “$9 per hour” or “$440 a week”)
- The regular hourly pay rate
- The total daily or weekly straight-time earnings and total overtime earnings for the workweek
- All additions to or deductions from the employee’s wages
- Total wages paid each pay period, the date of payment, and the pay period covered by the payment.
These records must be kept for at least three years. Payroll records should be kept on the employer’s premises for easy access and inspection by the Department of Labor’s (DOL) representatives.
What are the penalties for non-compliance with the FLSA?
Penalties for non-compliance with the FLSA include financial repercussions such as back pay for unpaid minimum wage or overtime and an equal amount in liquidated damages. Employers may also face civil penalties of up to $1,100 for each violation concerning underage workers or repeated or willful violations of minimum wage and overtime standards. In severe cases, criminal prosecution could result, potentially leading to additional fines and imprisonment.
Andrew (Drew) joined the Remote People team in 2020 and is currently Director, Regulatory Affairs. For the past 13 years, he has been a trusted advisor to C-Suite executives and government ministers on international compliance and regulatory issues. Drew holds a law degree from the University of Otago, a PhD from the University of Sydney, and is an enrolled Barrister and Solicitor of the High Court of New Zealand.
