More About the Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) has been around since 1938, but thousands of employers are sued each year for violations. The FLSA sets minimum wage, overtime pay, recordkeeping, and child labor standards for employment. The regulations created to enforce those provisions span several hundred pages, so there’s a lot of potential for misinterpretation and non-compliance. Violations commonly involve failing to record all hours worked and wrongly classifying employees as exempt from overtime.
Every employer covered by the FLSA must keep certain records for each covered, non-exempt worker. The Act requires no particular format, but the records must include accurate information about the employee and data about the hours worked and the wages earned. Covered employers must also post, and keep posted, a notice explaining the Act in a conspicuous place in all establishments. The content of the notice is prescribed by the Wage and Hour Division.
Nearly all employees are covered under the FLSA. Along with most state laws, the FLSA simply defines an employee as someone who is “employed by an employer.” If someone works for an employer, that person is probably an employee. The FLSA does recognize a few non-employee classifications, such as volunteers for charitable organizations, independent contractors, and interns who come to the workplace for their own educational benefit. If an individual does not fit one of these non-employee categories, the worker is probably an employee.
Employees may be classified as exempt or non-exempt. The non-exempt status is the default and simply means the employee is entitled to minimum wage and overtime. Unless an exemption applies (an exemption from overtime, minimum wage, or both), the employee is non-exempt and is entitled to both minimum wage and overtime.
The Wage and Hour Division enforces the FLSA by conducting investigations and gathering data on wages, hours, and other employment conditions or practices. Where violations are found, the agency may recommend changes to bring an employer into compliance, or may bring a lawsuit for back wages, plus (in the case of a willful violation) an equal amount in damages. Willful violations may be prosecuted and the violator fined up to $10,000. A second conviction may result in imprisonment.
A two-year statute of limitations applies to the recovery of back pay, except in the case of a willful violation, in which case a three-year statute applies.