What Is the Fair Labor Standards Act (FLSA)?

How the Fair Labor Standards Act Works

The Fair Labor Standards Act (FLSA) regulates minimum wage, overtime pay, and child labor. The FLSA applies to most private employers as well as state, federal, and local government agencies, and it covers both part-time and full-time workers.

The FLSA established the Wage and Hour Division (WHD) of the U.S. Department of Labor. This division enforces provisions of FLSA requirements. WHD also oversees other worker protections, such as the Family and Medical Leave Act, the Migrant and Seasonal Agricultural Worker Protection Act, and some provisions of the Consumer Credit Protection Act. 

• Alternate name: The Fair Labor Standards Act of 1938
• Acronym: FLSA

The Fair Labor Standards Act applies to organizations that engage in interstate commerce—or produce or handle goods that are involved in interstate commerce—and that meet one or more of the following criteria:

• Have an annual gross volume of sales of $500,000 or more
• Operate a hospital, school, or institution of higher learning
• Are part of a public agency

Workers who are covered under the provisions of the FLSA are called "nonexempt," meaning that they are not exempt from the protections of the law. Exempt workers include executives, professionals, administrative workers, outside sales employees, and some IT workers. Typically, exempt workers are paid a salary while nonexempt workers are paid an hourly wage. 

Freelancers and other independent contractors are largely exempt from the provisions of the FLSA. However, the FLSA applies to some domestic workers, such as babysitters, housekeepers, and nannies, provided that they earn a certain amount or work a certain amount per week or year (per employer). 

What Are the Provisions of the FLSA?

The FLSA covers four primary areas: minimum wage, overtime, recordkeeping, and child labor.

Minimum Wage

The FLSA set the first federal minimum wage. Initially set at 25 cents per hour, the minimum wage has increased over 20 times since 1938. The current federal minimum wage is $7.25.

Many states and Washington, D.C. have set higher minimum wages than the federal mandate. In addition, many cities and counties have enacted minimums that are higher than $7.25 per hour. 

Overtime 

Nonexempt employees are entitled to overtime pay if they work more than 40 hours per workweek. Overtime pay is equal to 1.5 times the rate of regular pay. So, for example, if a worker earns $15 per hour and works 42 hours during one workweek, they will earn $15 per hour for the first 40 hours and $22.50 per hour for the last two hours. 

The FLSA sets the workweek at seven consecutive 24-hour periods. Employers need not schedule workweeks to coincide with the standard calendar week, but they cannot average two weeks’ work to avoid paying overtime. They must also pay overtime on the regular payday for the week in which the employee worked.

Record-Keeping

Employers must display an official poster outlining the basic provisions of the FLSA. They must also track basic information for each nonexempt worker. This information includes the worker’s name, Social Security number, address, birth date, hours worked, pay rate, and date of payment.

Child Labor

Children under 14 years old are prohibited from working in jobs that are covered under the FLSA. This means that they are mostly restricted to jobs such as babysitting, household chores, and newspaper delivery. Children under the age of 14 may also work for their family business provided that their family wholly owns the company. 

Children between the ages of 14 and 16 may work outside of school hours at any non-hazardous, non-manufacturing occupation. Hazardous occupations include mining, metalworking, and working around toxic chemicals.

At age 16 or above, younger workers may work in any non-hazardous, non-agricultural job without time restrictions. They may also work in agricultural jobs—even those that are deemed hazardous by the Secretary of Labor.

What Isn’t Covered by the Fair Labor Standards Act? 

The FLSA doesn’t cover the following:

• Time off, including vacation time, sick leave, or holidays
• Paid time off
• Meal or rest periods
• Pay raises or benefits
• Reasons or notice for discharge

However, other federal, state, or local laws may cover some of these provisions. For example, the Worker Adjustment and Retraining Notification (WARN) Act mandates advance notice for some plant closings and mass layoffs.

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