The Fair Labor Standards Act (FLSA) sets forth a set of standards regarding overtime pay, minimum wage, youth employment, and recordkeeping in both the private and public sectors. Workers who are nonexempt are covered under standards establishing a minimum wage of no less than $7.25 per hour. These guidelines also stipulate that overtime pay is at a rate of no less than one and a half times regular rate of pay when covered employees work beyond 40 hours.

A great many workers toil for their employers on a daily basis, and put up with a lot of behavior they shouldn’t have to put up with, primarily because they don’t know there are laws against such behavior. Sometimes, this is because the employer doesn’t realize the laws against such behavior apply, or they think that engaging in certain practices shields them from the law, or creates some sort of loophole. For example, many employers and employees are under the impression that paying someone a salary creates an exemption from the FLSA.

In most cases, of course, they’re wrong. The FLSA covers the vast majority of employees, regardless of their job title or the duties they perform on a daily basis. It’s virtually impossible for any employer to get around wage and overtime laws, even though many will try. In all, at least 130 million workers in at least 7 million workplaces are covered by the FLSA, even if they or their employer don’t realize it.

Types of employee coverage

Under the FLSA, there are two types of coverage:

“Enterprise coverage” means, if the business qualifies for coverage, then virtually every employee of that “enterprise” is entitled to protection under the FLSA. If the business you work for has at least two employees and $500,000 in gross revenue, it is considered to be an “enterprise” under the FLSA. For the purposes of the FLSA, “enterprises” include hospitals and other medical care facilities, schools, including preschools, and government agencies at every level: municipal, state and federal.

“Individual coverage” means even those workers who work for a business that isn’t a covered “enterprise” are still usually covered if they’re engaged in interstate commerce, or in production of goods for commerce, or in domestic service. That means just about every employee in the country is covered by the FLSA, unless they meet a specific exemption.

One of the biggest misconceptions regarding FLSA coverage has to do with the definition of “interstate commerce,” because the definition is much broader than many imagine. If the business deals with a vendor who is out of state, sometimes sells merchandise to tourists from other states, makes sales calls to another state or another country, or even has a website, it is considered to be engaging in “interstate commerce” under the FLSA.

Classification Matters: Exempt and Non-Exempt Employees

Employers and employees are encouraged to verify the terms and conditions of any exemptions to this rule by carefully considering the employee’s duties. Employees and the jobs covered by the FLSA are classified as either “exempt” or “nonexempt”. The majority of employees under the FLSA are classified as non-exempt, but it’s an important distinction since exempt employees are not entitled to overtime pay while non-exempt employees are.

With very few exceptions, an exempted employee has to be paid at least $23,600 each year ($455 per week) on a salary basis and be an employee performing exempted job duties. In order to be exempted from FLSA protections, all three of these conditions must be met.

Exemptions are relatively rare, and fall into several narrow categories of employees and occupations.

Among them are:

More Information About Classification

If you are confused about whether you are an exempted or non-exempted employee, the government offers a website with a tool to help you determine your status. The Department of Labor also has training videos and fact sheets that correlate with a toll-free help line to assist you. Knowing your status and whether you have been misclassified is an important detail to bear in mind with regard to your rights as an employee.

References:

http://www.dol.gov/whd/flsa/

http://www.dol.gov/compliance/guide/minwage.htm#who

http://www.flsa.com/coverage.html

http://www.dol.gov/elaws/esa/flsa/screen75.asp

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