Fair Labor Standards Act
The Fair Labor Standards Act (FLSA) was implemented by Congress in 1938 to protect workers against certain unfair pay practices. Written by southern Senator and future Supreme Court Justice Hugo Black, the law established national minimum wage, provided the basis for the 40-hour work week, and limited child labor. The FLSA guarantees all workers covered by the act receive a minimum wage for each and every hour worked, plus time-and-a-half for every hour of overtime. Employers, in their attempts to improve efficiency, often violate the FLSA by cutting corners, and in doing so, fail to consider the rights of their employees.
The FLSA defines “employee” very broadly which causes employers to frequently misclassify W-2 employees as independent contractors. They will also misclassify hourly workers as salaried workers by trying to take advantage of the Executive or Administrative exemptions. Another common mistake employers will make is that they will benefit from off-the-clock work performed by their employees due to policies where employees arrive early/leave late (sometimes called donning and doffing), or where employees must work through their lunch breaks, without pay. The FLSA requires employers to pay all non-exempt employees minimum wage for the first 40 hours of work, plus time and a half for all overtime. In addition, the FLSA provides for attorneys’ fees, as well as liquidated damages equal to the unpaid wages, when the violation is willful.
The FLSA applies to workers who have an employer and are engaged in interstate commerce or in the production of goods for commerce; it also applies to workers who are employed by an enterprise engaged in commerce or the production of goods for commerce. The FLSA also applies to domestic service workers, hospital workers, educational institutions at any level, and public agencies. It does not, however, apply to independent contractors or volunteers because they are not considered employees.
- The FLSA protects workers against unfair employment practices.
- FLSA rules specify when workers are considered “on the clock” and when they should be paid overtime.
- The Act establishes a federal minimum wage.
- Employees are deemed either exempt (salaried) or nonexempt (hourly) with regard to the FLSA.
- The FLSA applies only to employers whose annual sales total $500,000 or more or who are engaged in interstate commerce.
- Originally the FLSA prohibited child labor, but it has since been expanded to prohibit wage disparity due to gender and discrimination due to age.
Employee Exemptions to FLSA
Some hourly workers are not covered by the FLSA but are instead subject to other regulations. For example, railroad workers are governed by the Railway Labor Act, and truck drivers fall under the purview of the Motor Carriers Act. Many full-time office workers (executive and administrative workers) are also not protected by FLSA rules when it comes to overtime because they are salaried (exempt) employees.
Only employees who are paid an hourly rate are covered by FLSA protections. However, among these employees, there several categories of workers who are considered “exempt” as well. They include the following:
- Executive, administrative, and professional workers who earn salaries of at least $684 per week.
- Executives who manage at least two other employees as a primary job duty, and who have the authority to hire, fire, and promote.
- Administrators who perform office work directly for management and who have the authority to use their own discretion in duties.
- Professionals who perform predominantly intellectual work requiring advanced knowledge, talent, imagination, or imagination.
- Outside salespeople regularly who work away from the employer’s place of business and are paid primarily through commissions.
- Computer workers are compensated either on a salary or fee basis at a rate not less than $684 per week or $27.63 an hour.
Beyond the professionals listed above, other exempt groups include:
- Employees of seasonal amusement parks or recreational businesses
- Employees of local newspapers having a circulation of less than 4,000
- Seamen or women on foreign vessels
- Newspaper delivery workers
- Workers on small farms
- Personal companions, caregivers to seniors, and casual babysitters
There are exceptions for employers as well. The FLSA applies only to employers whose annual sales total $500,000 or more or who are engaged in interstate commerce. A few employers, including small farms, are explicitly exempt.
Employer Violations of the Fair Labor Standards Act
The FLSA is a complex law that provides standards for an ever-evolving workforce, and as a result, employer violations are somewhat common.
Employee misclassification: The exempt and nonexempt classification is based on job duties (vs the job title) and, to some extent, salary levels. This can become confusing for certain jobs or industries. For example, in cases where workers receive a fixed salary, some employers assume they are automatically exempt from overtime wages. This is incorrect. Even workers on a fixed salary can be nonexempt and receive overtime — it depends entirely on the job duties and the amount of earned pay.
Unpaid overtime: If an employee is doing job-related tasks, training, or meetings outside of regular work hours, that counts as work, even if the employer is unaware of the activities or did not authorize them.
Unpaid “breaks”: If an employee answers emails, texts, phone calls during a break, it’s considered work and should be compensated.
Accounting mistakes: If an employee works 35 hours one week, but 45 hours the next, an employer may not always be able to average out those hours between the two weeks to avoid paying overtime.
Waiters and bar tenders, manufacturing workers, assembly line workers, mortgage brokers who work on commission, drivers of cars and couriers, and people who work as independent contractors are the most likely to experience wage theft from employers who violate FLSA laws (either intentionally or unintentionally).
If you have been a victim of wage theft, do not hesitate in setting up a consultation. Phillip Murphy is very experienced in handling wage and hour cases and obtaining very favorable results for his clients.