The Fair Labor Standards Act (FLSA) is a federal law proposed in 1937 and passed by Congress a year later. During the Great Depression, many employers took advantage of the crumbling economy and forced workers to work impossibly long hours in dangerous and unhealthy conditions, often for very little pay.
To this day, the FLSA requires employers who are covered to:
- Pay their workers a minimum wage
- Schedule their workers for a certain amount of hours
- Pay their workers extra for any hours worked over 40
- Restrict child labor
- Keep accurate records of employee hours and wages
- Ensure that working conditions are safe and healthy
The FLSA can be very complex and confusing when it comes to who is and is not covered under the law. For the sake of clarity, learn more about the FLSA, who it covers, and who is exempt, below.
Who Does the FLSA Cover?
Employers
Any business, organization, or government entity that makes a minimum of $500,000 per year in sales or engages in interstate commerce (shipping products to other states, communicating [phone, email, letters] with customers or clients in other states, etc.) is required to follow the requirements of the FLSA for their employees.
Employees
Most employees, especially hourly workers, who work for a business that is covered by FLSA are covered by the FLSA. These employees are referred to in the FLSA as “non-exempt” and are eligible to receive the full benefits and rights provided by the Fair Labor Standards Act. These benefits include:
For full-time (40-hours a week) employees:
- $7.25 per hour minimum wage
- If the state in which the employee works sets a higher minimum hourly wage, the employer must pay that higher rate.
- Tipped employees who receive at least $30 a month in tips (paid by customers rather than the employer), their minimum wage according to the FLSA is $2.13.
- Overtime (anything over 40 hours) must be paid one and one half times their hourly wage (time and a half)
Who is Exempt?
Employers
There are very few employers who are exempt from following FLSA requirements. Those who are exempt tend to be small farms who only hire local help, and only sell what they make locally.
Employees
Exempt workers, however, come in various shapes and sizes. It depends sometimes on how they are paid, how much they receive, certain job tasks they perform, and whether or not they are independent contractors.
Executive, Administrative, and Professional Workers
Most of these types of workers receive a salary instead of an hourly wage, but that does not necessarily exempt them from FLSA benefits. In order to be considered exempt from FLSA benefits, these types of workers must also perform the following tasks:
- Executive
- Manage and direct two or more full-time employees
- Have the authority to hire and fire, promote and demote, or discipline employees
- Receive at least $455 per week in salary
- Performs office or non-manual work
- Uses his/her own discretion and judgment regarding work duties
- Receives at least $455 per week in salary
- Performs some sort of creative work: i.e. music, writing, acting, art, etc.
- Performs intellectual work such as law, medicine, theology, accounting, teaching, etc.
- Receives at least $455 per week in salary
Outside Salesperson
These types of workers usually work with little to no direction or supervision, receive a commission from the sales they produce, and regularly works at locations away from their employer.
Computer Workers
Any employee who works in some sort of computer field (computer systems analysts, programmers, software engineers, etc.) and receive at least $455 per week in salary or wages are exempt from FLSA regulations.
Miscellaneous
There are other various types of workers and employees that are exempt from the FLSA. It usually depends, again, on the type of work they do or who they work for. Examples include:
- Employees hired seasonally for amusement or recreational businesses
- Those working on foreign ships
- Newspaper deliverers
- Workers on small farms
- Casual babysitters
- Apprentices: these workers are at least 16 years old and have signed an agreement with a mentor to learn a skilled trade. Although exempt from the FLSA, they may still be covered under any state labor laws.
- Independent Contractors: These workers are exempt because they work for themselves and are not employees with a company or business. These types of workers either work with a direct-sales company on a commission basis (Avon, Mary Kay, Tupperware, etc.), others, or are in some way self-employed and set their own hours and pay.
Conclusion
We hope this article has helped you to better understand what the FLSA is, who is covered by it and who is exempt from these benefits. For more information about the FLSA or to find out if you’re organization’s employees are applicable, speak to an employment attorney at The Brown Firm PLLC.
