Fair Labor Standards Act (FLSA)

The federal law establishing minimum wage, overtime pay, recordkeeping requirements, and child labor standards for most private and public sector employees.

The Fair Labor Standards Act (FLSA), enacted in 1938, is the primary federal law governing basic wage and hour protections for American workers. It establishes the federal minimum wage (currently $7.25/hour, though many states and cities have higher minimums), requires overtime pay at 1.5× the regular rate for hours worked beyond 40 in a workweek, sets recordkeeping requirements for employers, and restricts child labor. Most private sector and government employers are covered by the FLSA.

The FLSA divides workers into two categories with profoundly different rights: exempt and non-exempt. Non-exempt employees are entitled to overtime pay for hours beyond 40 per week. Exempt employees — those meeting specific criteria related to salary level and job duties, including executive, administrative, professional, and computer employee exemptions — are not entitled to overtime regardless of how many hours they work. Misclassification of non-exempt employees as exempt is one of the most common FLSA violations and the basis for substantial wage-and-hour litigation.

The salary threshold for the FLSA's white-collar exemptions is updated periodically by the Department of Labor and is a recurring source of controversy. To qualify as exempt under the standard white-collar exemptions, employees must be paid a minimum weekly salary (set at $684/week — $35,568/year — under 2019 rules, with updates subject to ongoing regulatory and legal challenges). The salary threshold alone does not determine exemption: the employee's primary job duties must also meet the specific criteria for their exemption category. Paying a salary above the threshold does not automatically make an employee exempt.

FLSA violations are more common than most workers realize, and many occur at employers who do not intend to violate the law. Common violations include misclassifying non-exempt employees as exempt, failing to compensate for off-the-clock work (answering emails before clocking in, staying late without recording it), improper tip credits, and treating employee meal breaks as unpaid when the employee is not fully relieved of duties. Employees have the right to file complaints with the Department of Labor's Wage and Hour Division or bring a private lawsuit, and prevailing employees can recover back wages, an equal amount as liquidated damages, and attorney's fees.

Exempt vs. Non-Exempt: What Determines Your Classification

  • Salary level test: exempt employees must be paid a guaranteed minimum weekly salary — currently $684/week; this threshold is periodically updated.
  • Salary basis test: exempt employees must receive their full salary in any week they perform work, regardless of hours worked.
  • Duties test: exempt status also depends on primary job duties — executive (managing others), administrative (office work with discretion), or professional (advanced knowledge or creative work) exemptions each have specific criteria.
  • Hourly pay = non-exempt: employees paid by the hour are generally non-exempt and entitled to overtime regardless of their salary equivalent.
  • Job title is irrelevant: calling someone a 'manager' or 'coordinator' does not make them exempt — the actual duties determine the classification.
  • Computer employee exemption: applies to certain IT roles but requires specific duties and a salary or hourly rate above defined thresholds.

Common FLSA Violations to Know

  • Off-the-clock work: requiring employees to work before clocking in, after clocking out, or during unpaid breaks without recording the time.
  • Misclassification: treating non-exempt employees as exempt to avoid paying overtime, particularly in supervisory or coordinator roles.
  • Improper deductions: deducting amounts from an exempt employee's salary in ways that violate the salary basis test, converting them to non-exempt status.
  • Tip credits: misapplying the tip credit provision or requiring tipped employees to share tips with non-tipped workers.
  • Training and travel time: failing to pay non-exempt employees for mandatory training or required travel time during the workday.
  • Compensatory time: private sector employers generally cannot offer 'comp time' instead of overtime pay to non-exempt employees — only government employers can do this.

Example

A customer service manager is classified as exempt and paid a $42,000 annual salary. She regularly works 50-hour weeks with no overtime pay. An audit reveals that her primary duties are routine customer service work with minimal supervisory authority — she does not qualify for the executive exemption and has been misclassified. The employer owes her back overtime pay for two years.