Fair Labor Standards Act: Everything You Need To Know

The Fair Labor Standard Act or FLSA is a United States labor law that ensures the minimum wage of every laborer and employee. It also ensures “time-and-a-half” overtime pay if an employee works more than 40 hours a week. It also prohibits the employment of minors in “oppressive child labor”.This law applies to all employees engaged in interstate commerce or employed by a company that is engaged in commerce or produces goods for commerce. This law was implemented in 1938. 

The FLSA also applies to full-time, part-time, probationary, and temporary employees and establishes child labor standards. The labor standards do not apply to bona fide independent contractors.

Detailed Aspects Covered by the FLSA 1938

We have seen which aspects are covered in the FLSA in the introduction itself. Now let us see the details of those aspects. 

  • Overtime

Every employee that holds a position determined to be covered under the mandatory overtime rules of FLSA is affected by this law the most. In order to be eligible for overtime pay, the employees need to fill out a time and attendance sheet to keep a record. 

Each agency’s Human Resource office determines whether or not an employee is eligible for overtime pay, set by the US Human Resources Division guidelines. In case any agency would like to change the work period designation from overtime-eligible to overtime-exempt or law enforcement, you must request approval from State HR.

Certain executives can be exempt from the overtime pay by virtue of the act. 

To be eligible for overtime pay, an employee must work more than 40 hours in a whole week. The employer will not be mandated to pay an employee overtime if they work eight hours in one day, but their work hours don’t add up to more than 40 after a week. They will not be paid more for working on a holiday, Saturday or Sunday, if their work hours are not more than 40 in one week. 

Also, private-sector employers are prohibited from avoiding paying overtime by awarding exempt employees who work on an hourly basis with compensatory time. The Fair Labor Standards Act does permit public agencies and employers to award employees with compensatory time in lieu of overtime.

  • The Minimum Wage

The federal government’s minimum wage is subject to review and may change from time to time, that is, in varied economic situations. Some states have a higher minimum wage than others. The current federal minimum wage is $7.25, and the federal minimum wage for tipped employees is $2.13. 

  • Child Labor

The FLSA prohibits the employment of any child in an oppressive environment and strictly regulates the hours for which a child is permitted to be employed. As the age decreases, the regulations become more strict. All children under this law are divided into three groups. A group contains 16 and 17-year-olds, the second group contains 13 and 14-year-olds, and the third group consists of all children below 13. 

The hours they can work for and the occupation they can be employed for varies from group to group. The states often check for minor employment. Everyone under 18 years is a minor in all the states, but the requirements and regulations on child labor vary from one state to another. 

Exempt and Nonexempt Employees 

If bona fide statutory exemptions apply to an employee, the employer is not mandated to pay them over time and/or minimum wage. The federal guidelines have divided the exemptions into two categories:

  1. The employee can be exempt from both the right to minimum wage and the right to overtime pay.
  2. The employee can be exempt from the right to overtime pay but not minimum wage. 

Employers have often been seen to be exploiting the exemption laws and not granting employees rightfully earned money. It is now one of the most active areas of enforcement by the US Department of Labor(DOL). 

Employers who wrongfully classify an employee as exempt are generally required to compensate the money the employee has lost. They are also subject to criminal prosecution in court. The fine can be from 1000 dollars to 10,000 dollars per violation, depending on the frequency and willfulness of the violations. 

For non-exempt employees, the current minimum wage rate is a little over seven dollars per hour. But for any employee who is 20 years old or younger, the minimum wage rate is 4.25 dollars per hour for the first 90 calendar days. Calendar days mean the days worked and not working both. 

The minimum wage rate applies to full-time workers, part-time workers, interns, and volunteers. If an employer fails to meet the minimum wage rate, they are subjected to criminal penalties and required to reimburse the employees who had been affected by this. The penalty may vary according to the gravity and willfulness of the violation.

Benefits of the Fair Labor Standards Act

Here are some undeniable benefits of the Fair Labor Standard Act, 1938

  • Reasonable Pay

For overtime eligibility and minimum wage, there has been an advancement towards fair employment opportunities. The employee is aware of how much they can get paid for any work and manage their expenses accordingly. The exemption category is beneficial for employers because they don’t have to pay overtime to the people who have not produced enough results.

  • Reasonable Work Hours

The work hours limitation has enabled the employees to have a life outside of work. Every employee under or aged 16 is required to keep up with school work; hence, they have special limitations on the hours they can work. This is an incredible feat for the FLSA.   

Employers have the right to establish how many hours they want their employees to work in a day, which is beneficial for the employer. But they have to pay overtime for the excess hours so that no employer can exploit the employees. 

  • Employer Compliance

The US department of labor has tools to ensure the employers comply with the conventions of this Law. Employers are free to use these tools themselves, but any inconsistency is penalized by the US DOL. Without the FLSA, it would have been difficult to regulate the illegal, unethical, and exploitative practices of some employers. 

The Pay and Benefits Not Required Under the Fair Labor Standards Act

The benefits that FLSA does not include are

  • Compensation for the commute to and from work
  • Pay for a vacation, holiday, severance, or sick days.
  • Premium compensation for working on a weekend or a holiday.
  • Meal or rest periods.
  • FLSA 1938 does not have any policy on salary rise or fringe benefits.
  • Immediate compensation of due wage for terminated employees. 

In a Nutshell

FLSA 1938, or Fair Labor Standard Act, covers overtime eligibility, compensation programs, child labor law, work hours, and most importantly minimum wage rate of an employee. A specific law takes executive positions and the tipping custom into account. Child labor laws have been developed further upon since 1938, and they are today almost foolproof. This is one of the few laws made in favor of the employees and laborers in the 1900s. FLSA 1938 has contributed towards a fair employment ground immensely. 

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