# Fair Labor Standards Act

## The Fair Labor Standards Act (FLSA) established a national minimum wage, "time-and-a-half" for overtime in certain jobs, and etc.

#### Key Points

• The Fair Labor Standards Act established a national minimum wage, guaranteed "time and a half" for overtime in certain jobs, and prohibited most employment of minors in "oppressive child labor".

• The 1947 Portal-to-Portal Act specified exactly what type of time was considered compensable work time.

• The Fair Labor Standards Amendment included changes to overtime compensation, defined a "regular rate," raised the minimum wage from 40 cents to 75 cents per hour and extended child labor coverage.

### Practical Application

Generally, employees of a company who does at least \$500,000 of business or gross sales in a year will be subject to the FLSA's protections. Several exemptions exist that relieve an employer from having to meet the statutory minimum wage, overtime, and record-keeping requirements. The largest exceptions apply to the so-called "white collar" exemptions that are applicable to professional, administrative, and executive employees. Exemptions are narrowly construed; an employer must prove that the employees fit "plainly and unmistakeably" within the exemption's terms.

The FLSA applies to "any individual employed by an employer" but not to independent contractors or volunteers because they are not considered "employees" under the FLSA. Still, an employer cannot simply exempt workers from the FLSA by calling them independent contractors, and many employers have illegally misclassified their workers as independent contractors. Some employers similarly mislabel employees as volunteers. Courts will look at the "economic reality" of the relationship between the putative employer and the worker to determine whether the worker is, in fact, an independent contractor.

Presuming an employee is not exempt from overtime, there are many instances in which overtime is not paid properly, including when an employee is not paid for travel time between job sites, activities before their shift starts or after it ends, and activities to prepare for work that are central to work activities. If an employee is entitled to overtime, they must be paid one and a half times the employee's "regular rate of pay" for all hours worked over 40 in the same work week.

#### Key Term Glossary

benefit
Employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, perqs or perks) are various non-wage compensations provided to employees in addition to their normal wages or salaries.
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a specific commercial enterprise or establishment
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child labor
The employment of children who are under the legal (or generally recognised) minimum age
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employment
The work or occupation for which one is used, and often paid.
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exempt
Not entitled to overtime pay when working overtime.
fair
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independent contractor
A person working independently, under a contract; a self-employed person.
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inflation
An increase in the general level of prices or in the cost of living.
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IT
Information Technology: the use of computers and telecommunications equipment to store, retrieve, transmit, and manipulate data.
labor
Effort expended on a particular task; toil, work.
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minimum wage
The lowest rate at which an employer can legally pay an employee; usually expressed as pay per hour.
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overtime
The rate of pay, usually higher, for work done outside of or in addition to regular hours.
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Place
Place refers to providing the product at a place which is convenient for consumers to access. Place is synonymous with distribution.
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standard
A level of quality or attainment.
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value
The degree of importance you give to something.
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values
A collection of guiding principles; what one deems to be correct and desirable in life, especially regarding personal conduct.
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wage
An amount of money paid to a worker for a specified quantity of work, usually expressed on an hourly basis.