What Is the Fair Labor Standards Act?
The Fair Labor Standards Act (FLSA) is the cornerstone of federal labor law in the United States. Enacted in 1938 during the Great Depression, this landmark legislation was designed to protect workers from exploitative labor practices by establishing minimum wage, overtime pay requirements, recordkeeping standards, and youth employment regulations. Today, the FLSA covers more than 143 million American workers and remains one of the most important pieces of employment legislation ever passed.
Administered and enforced by the Wage and Hour Division (WHD) of the U.S. Department of Labor, the FLSA applies to enterprises engaged in interstate commerce or in the production of goods for interstate commerce. Understanding how this law works is essential for both employers who must comply with its provisions and employees who want to know their rights.
Key Provisions of the FLSA
Minimum Wage
The FLSA establishes a federal minimum wage that serves as a floor for worker compensation. As of 2024, the federal minimum wage stands at $7.25 per hour, a rate that has remained unchanged since 2009. However, many states and localities have enacted their own minimum wage laws that exceed the federal rate. When both federal and state laws apply, the employee is entitled to the higher wage.
Overtime Pay Requirements
One of the most significant provisions of the FLSA is its overtime pay requirement. Under the law, covered non-exempt employees must receive overtime pay at a rate of not less than one and one-half times their regular rate of pay for all hours worked beyond 40 in a workweek. This is commonly referred to as "time and a half."
Recordkeeping
Employers covered by the FLSA are required to maintain accurate records for each non-exempt worker. These records must include personal information, hours worked each day, total hours worked each workweek, the basis on which wages are paid, the regular hourly pay rate, total daily or weekly straight-time earnings, total overtime earnings for the workweek, all additions to or deductions from wages, total wages paid each pay period, and the date of payment and pay period covered.
Youth Employment Standards
The FLSA also contains child labor provisions designed to protect the educational opportunities of minors and prohibit their employment in jobs that could be detrimental to their health or well-being. These rules set both the minimum age for employment and limit the number of hours that minors can work.
Who Is Covered by the FLSA?
FLSA coverage can apply in two ways: enterprise coverage and individual coverage. Enterprise coverage applies to businesses that have at least two employees, conduct at least $500,000 in annual business volume, or are hospitals, schools, or government agencies. Individual coverage applies to workers who are engaged in interstate commerce or the production of goods for interstate commerce, including those who handle, sell, or otherwise work on goods that have been moved in or produced for commerce.
"The purpose of the FLSA was to eliminate labor conditions detrimental to the maintenance of the minimum standard of living necessary for health, efficiency, and general well-being of workers." — U.S. Department of Labor
Exempt vs. Non-Exempt Classification
Not all employees are entitled to overtime under the FLSA. The law provides exemptions for certain categories of workers, most notably those classified as "exempt" employees. To qualify as exempt, employees generally must meet three tests:
- Salary Basis Test: The employee must be paid a predetermined, fixed salary that is not subject to reduction based on the quality or quantity of work performed.
- Salary Level Test: The employee must earn at least a minimum salary threshold, which the Department of Labor periodically updates.
- Duties Test: The employee's job duties must primarily involve executive, administrative, professional, computer, or outside sales work as defined by DOL regulations.
Misclassification of employees as exempt when they should be non-exempt is one of the most common FLSA violations. Employers who misclassify workers can face significant penalties, including back pay, liquidated damages, and attorney fees.
Common FLSA Violations
Despite the FLSA being in effect for decades, violations remain widespread. Some of the most common infractions include:
- Failing to pay overtime to eligible employees
- Misclassifying employees as exempt or as independent contractors
- Requiring off-the-clock work before or after shifts
- Making improper deductions from exempt employees' salaries
- Not including bonuses and commissions in overtime calculations
- Failing to maintain accurate time and pay records
How to File an FLSA Complaint
If you believe your employer has violated the FLSA, you have the right to file a complaint with the Wage and Hour Division. Complaints can be filed online, by phone, or in person at any WHD office. The FLSA protects employees from retaliation for exercising their rights under the law, meaning your employer cannot fire, demote, or otherwise punish you for filing a complaint.
The statute of limitations for FLSA claims is two years from the date of the violation, or three years if the violation was willful. Employees may recover unpaid wages, an equal amount in liquidated damages, and reasonable attorney fees and court costs.
Recent Developments and Updates
The FLSA has been amended numerous times since its original passage. Recent years have seen significant developments in the overtime salary threshold, with the Department of Labor proposing and implementing updates to the minimum salary level required for the executive, administrative, and professional exemptions. These changes can affect millions of workers who may become newly eligible for overtime pay.
Staying informed about FLSA developments is critical for both employers and employees. As the workplace evolves with remote work, gig economy growth, and new technologies, the interpretation and application of the FLSA continues to be shaped by court decisions, administrative rulings, and legislative proposals.