Overview of the FLSA

September 24th, 2019

Jill S. Kirila, Shennan Harris

Squire Patton Boggs


The federal Fair Labor Standards Act (FLSA) was enacted in 1938 as a means of economic recovery from the Great Depression. According to Department of Labor (DOL) statistics, more than 135 million workers are affected by the FLSA’s provisions.

Purpose

The Fair Labor Standards Act (FLSA) was intended to:

  • prevent wage exploitation of vulnerable workers
  • promote fair competition in interstate commerce by leveling labor costs
  • generate jobs by encouraging employers to hire more workers rather than extending the hours of their existing workforce.

Congress has amended the FLSA over the years to add provisions that regulate:

  • travel time (the Portal-to-Portal Act)
  • women's wages (the Equal Pay Act)
  • breaks for nursing mothers (Patient Protection and Affordable Care Act).

Regulations

For covered employers, the FLSA sets:

  • minimum wage
  • overtime pay
  • recordkeeping requirements
  • child labor standards

For information on employers covered by the FLSA, see Chapter 3, Covered employers. The FLSA applies to employment within the United States and its territories or possessions.  Employees working abroad are not protected by the FLSA even if the employer has its main office in the United States.

Things not regulated

The FLSA’s coverage is broad and the United States Supreme Court has held the FLSA should be liberally interpreted to favor coverage of employees. However, the FLSA does not regulate many commonplace employment practices, including the following:

  • vacation pay
  • holiday pay
  • severance pay
  • sick pay
  • rest periods (except for the purpose of expressing breast milk)
  • meal breaks
  • holidays off and vacation time
  • premium pay for weekend and holiday work
  • premium pay for work in excess of eight hours per day
  • number of hours in a day or week worked by employees who are more than 16 years of age
  • pay raises and fringe benefits
  • discharge notices
  • reasons for discharge
  • immediate payment of final wages to discharged employees.

NOTE:

Many of these practices, however, are regulated by various state laws, so you should consult the laws of any state in which you have employees.

Interaction with State laws

All states, including the District of Columbia and some of the United States territories, have their own laws regulating wages, hours, or both. Some states have standards which are more stringent than the FLSA. The employer must follow the standards most favorable to the employee.

The FLSA does not excuse compliance with the requirements of state and local laws. State and local laws may cover employers and employees not covered by the FLSA or may provide greater protection for employees. States might adopt standards which:

  • apply to employers too small to be covered by the FLSA
  • apply to employees exempt under the FLSA, such as through narrower exemptions for white collar employees
  • require payment of overtime after an employee works a certain number of hours per day rather than when an employee works 40 hours in a given week
  • provide for a higher minimum wage than the federal minimum wage
  • require payment for certain employee "time" that the FLSA does not.

Enforcement

The Wage and Hour Division of the Department of Labor administers and enforces the FLSA with respect to both private and public employment.

Investigations

In connection with this enforcement, the Department of Labor may enter and inspect any place of business of any employer for the purpose of inspecting the books, payrolls, or other records relating to wages, hours, and conditions of employment. See Chapter 14, Enforcement.

Enforcement actions

The Secretary of Labor, individual employees, or a group of employees may sue an employer to collect past-due wages. If successful, they may also recover liquidated damages in an amount equal to past-due wages, plus interest, and attorney’s fees and costs (in private suits). See Chapter 14, Enforcement.

State agency enforcement

States may also have agencies that investigate wage and hour violations, and permit employees to sue an employer to collect past-due wages. For more information, contact the appropriate state agency listed in Appendix A, State agencies.

Recently the Department of Labor has been partnering with a number of state agencies to share information and coordinate law enforcement efforts relating to misclassification of workers.

Commonly asked questions and answers

Q. Does the FLSA require employers to provide time off or breaks?

A.  Generally, no. For the most part, the FLSA does not require that employers provide any particular time off; but, in 2010, the law was amended to require certain employers to provide reasonable break time to nonexempt employees to express breast milk for one year after the birth of a child. However, state and local laws may impose additional requirements. See  Chapter 11, Nonexempt employees: determining work time.

Q. Does the FLSA require severance or other termination-related payments?

A. No. State and local laws, however, may impose requirements related to severance payments or timing of final pay.

Q. Does the Department of Labor (DOL) have the right to investigate my business?

A. Yes. The FLSA gives the Department of Labor (DOL) the authority to enter any place of business for purposes of inspecting records related to wages, hours and conditions of employment. However, you have certain rights prior to an inspection. See Chapter 14, Enforcement.

Q. How many employees do I need to have to be subject to FLSA regulations?

A. Even if you only have one employee, you amay be subject to the FLSA if your annual gross sales or business volume is at least $500,000 or you are one of the other defined covered entities (such as hospital, elementary school, government entity).