FLSA stands for Fair Labor Standards Act, a law in the United States intended to protect workers from certain unfair pay practices. The FLSA establishes various labor regulations governing interstate commerce employment, such as minimum wages, overtime pay requirements, and child labor restrictions. The FLSA, which was passed in 1938, has undergone numerous changes. Since then, it has been one of the most critical laws for employers to understand because it establishes a wide range of regulations for dealing with employees, whether salaried or hourly.
How does it work?
The FLSA outlines when employees are "on the clock" and when they are not being paid for their time. Extensive guidelines define who is exempt and who is non-exempt from the FLSA's employee overtime requirements. Under the law, all hours over 40 in a seven-day workweek must be compensated at "time-and-a-half," or 1.5 times the regular hourly rate.
Exempt employees are monthly salaried instead of being paid by the hour and are not eligible for overtime pay and minimum wage. The FLSA exempts the following job categories:
The specifics may vary by state, but an employee is deemed exempt if they fall under one of the categories mentioned above, are salaried, and make at least $684 per week or $35,568 per year.
Non-Exempt employees are paid hourly. They are eligible for minimum wage and overtime pay and must be paid 1.5 times their regular hourly rate. Under the FLSA, employees earning less than $455 weekly or $23,660 annually are considered non-exempt.
Who is affected by FLSA?
The FLSA applies to employees who have a job and are involved in intrastate commerce or producing goods for commerce. It also applies to employees who work for a company involved in either of these activities. Additionally covered by the FLSA are domestic service workers (housekeepers, cooks, and full-time babysitters) and those employed by public agencies, hospitals, and schools for children with special needs, including those who are mentally or physically challenged.
Who is not affected by FLSA?
Independent contractors and volunteers are not affected by the FLSA as they are not regarded as employees. So, they are not covered by its protections.
Which Employment Practices are covered by the FLSA?
FLSA establishes standards for minimum wage, overtime pay, recordkeeping, and child labor that apply to workers in the private sector and federal, state, and local governments.
1. Minimum Wage
The federal minimum hourly wage is $7.25 as of July 24, 2009. There are minimum wage laws in many states. When subject to state and federal laws, employees are entitled to a higher minimum wage.
2. Overtime Pay
For hours over 40 in a workweek, covered non-exempt employees must be paid overtime at least 1.5 times their regular pay rate. Sixteen and older employees may work an unlimited number of hours per workweek. The FLSA does not mandate overtime pay for work done on weekends, holidays, or rest days unless overtime is done on those days.
The employer must post an official poster outlining the FLSA's requirements and have to maintain records of employee time and pay.
4. Child Labor
These rules are intended to safeguard minors' educational opportunities and forbid their employment in jobs or settings that harm their health or well-being.
5. Violations of FLSA
Numerous violations of the FSLA are possible due to the complexity of the law and the dynamic nature of work and the workforce. The most common examples are listed below:
Confusing Exempt and Non-Exempt employees
Not paying for "of the-clock" work
Not providing overtime pay agreements
Averaging work weeks
Does the FLSA cover Nonprofits?
Nonprofit organizations must abide by the rules of FLSA when dealing with their employees. A nonprofit organization’s employees engaged in commercial activities are covered by the FLSA on an enterprise basis if the organization's commercial activities generate at least $500,000 in revenue annually. But if they are doing any charity work, FLSA does not apply to them because they serve no commercial purpose. Let's say a nonprofit animal shelter offers homeless animals free veterinary care, adoption assistance, and shelter (charitable activities). But, the shelter additionally charges clients for veterinary services (commercial activities). In this case, if they generate at least $500,000 in revenue annually, they will fall under the rules of FLSA.
Does the FLSA apply to Churches?
In most cases, the FLSA does not apply to religious organizations. Because their employees don't carry out "business purposes" as defined by law. Even though a church is not an "enterprise" defined by the FLSA, the legal requirements may apply to each employee individually.