Fair Labor Standards Act: Understanding its Requirements
What is FLSA? Fair Labor Standards Act (FLSA) : • Sets standards for minimum wage and overtime pay. • Establishes record keeping standards. • Prescribes child labor standards
FLSA does not regulate: • vacation, holiday, severance, or sick pay • meal or rest periods, holidays off, or vacations • premium pay for weekend or holiday work • pay raises or fringe benefits • discharge, termination, or final payment procedures
FLSA Requirements • Minimum Wage Requirements • Overtime Pay Requirements • Record Keeping Requirements • Child Labor Restrictions
Minimum Wage Requirements Effective July 24, 2009, federal minimum wage stands at $7.25/hour. The minimum wage requirements state that covered, non exempt employees must be paid not less than federal minimum wage for all hours worked. Minimum wage includes : o Wages o Commissions o Certain bonuses o Tips received by eligible employees o Reasonable cost of room, board and other “facilities” provided by the employer for the employee’s benefit
Overtime Pay Requirements •
FLSA defines overtime as time worked beyond prescribed hours.
• Compensation payable for overtime is 1 ½ times the regular rate of pay for all hours over 40 hours in a workweek. • For instance, if an employee works 45 hours at an hourly rate of $10/hr, he is entitled to $10/hr for all 45 hours plus an additional $5/hr for the five OT hours, totaling up to $475 for the week.
Record Keeping Requirements • Every employer covered by FLSA must maintain certain records for each covered, nonexempt worker. • Maintain payroll records, collective bargaining agreements, sales and purchase records for at least three years. • Retain wage computation records for two years including: –
time cards and piecework tickets
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wage rate tables
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work and time schedules
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records of additions to or deductions from wages
Child Labor Rules Child labor provisions under FLSA are designed to protect the educational opportunities of minors. These provisions: • Prohibit youth employment in jobs that are detrimental to their health and safety • Restrict hours that those under 16 years of age can work • List hazardous occupations too dangerous for young workers to perform
Want to learn more about FLSA, its requirements and best practices to comply with them? ComplianceOnline webinars and seminars are a great training resource. Check out the following links:
• Fair Labor Standards Act: Are Your Employees Classified C • The In's and Out's of FLSA • How to Conduct FLSA Classification Self-Audit • Avoiding Costly Wage and Hour Problems • How to Pay Overtime Correctly under FLSA • Handling Supplemental Pay Under the FLSA