Ohio State University Fact Sheet

Community Development

700 Ackerman Road, Suite 235, Columbus, OH 43202-1578

The Fair Labor Standards Act (FLSA)

CDFS-1377-95

Small Business Series

James R. Lindner

Overview

The Fair Labor Standards Act of 1938, as amended (FLSA) is the federal law that establishes minimum wage, overtime pay, and child labor standards. The current minimum wage is $4.25 an hour. FLSA requires payment of overtime wages at a rate of

1 1/2 times the regular rate of pay. Overtime is any time worked over 40 hours in a given workweek. Child labor provisions are designed to protect the educational opportunities of minors and prohibit employment in jobs that are hazardous.

Child labor provisions are subdivided into nonagricultural and farm jobs. The provisions covering farm jobs are beyond the scope of this factsheet and will not be covered; for information on these provisions contact the U.S. Department of Labor Employment Standards Administration Wage and Hour Division. In nonagricultural work, the permissible jobs and hours of work, by age, are as follows:

• Youths 18 years or older may perform any job, whether hazardous or not, for unlimited hours;
• Youths 16 and 17 years old may perform any nonhazardous job, for unlimited hours; and
• Youths 14 and 15 years old may work outside school hours in various nonmanufacturing, nonmining, nonhazardous jobs under the following conditions: no more than 3 hours on a school day, 18 hours in a school week, 8 hours on a nonschool day, or 40 hours in a nonschool week. Also, work may not begin before 7 a.m., nor end after 7 p.m., except from June 1 through Labor Day, when evening hours are extended to 9 p.m. Under a special provision, youths 14 and 15 years old enrolled in an approved Work Experience and Career Exploration Program may be employed for up to 23 hours in school weeks and 3 hours on school days.

Fourteen is the minimum age for most nonfarm work. However, at any age, youths may deliver newspapers; perform in radio, television, movie, or theatrical productions; work for parents in their solely-owned nonfarm business; or, gather evergreens and make evergreen wreaths.

Tipped Employees

Tipped employees are those who customarily and regularly receive more than $30 a month in tips. The employer may consider tips as part of employee wages, but such a wage credit must not exceed 50% of the minimum wage. The employer who elects to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the minimum wage when direct wages and the tip credit allowance are combined. Also, employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement.

Enforcement

The Wage and Hour Division enforces and controls the FLSA in private employment, state and local government employment, some federal employees and others. The Office of Personnel Management is responsible for enforcement of certain other Federal employees.

Covered Employees

The FLSA covers employees of enterprises having workers engaged in interstate commerce, producing goods for interstate commerce, or handling, selling, or otherwise working on goods or materials moved in or produced; this includes most businesses and organizations.

Exemptions

Provisions allow for the payment of subminimum wages, "commensurate wage rates," to the disabled and a few others who meet specified conditions. Payment of commensurate wages is permissible only under special certificates. Special certificates are issued by the Department of Labor. Employers must document the productivity of the worker to receive commensurate wages. Productivity of workers to receive commensurate wages is measured against the productivity of other workers. If a measurable difference can be documented, then a special certificate is issued. The Fair Labor Standards Act also contains provisions exempting certain classes of workers otherwise covered from its minimum wage or overtime requirements: Executive, Administrative, Professional, and Outside Sales Person.

Executive Exemption

Primary duty must be management rather than "working supervisor." Employee must direct the work of two or more employees.

Administrative Exemption

Primary duty must be nonmanual or office work directly related to the overall policies or operations of the organization rather than an individual department. The employee must regularly exercise discretion and independent judgment.

Professional Exemption

Duties must require a prolonged course of specialized instruction or work as a teacher. Work must require consistent exercise of discretion and judgment or require invention, imagination, or talent in a field of artistic endeavor.

Outside Sales Persons Exemption

Duties must require the employee to work away from his or her employer's place or places of business: making sales, taking orders or securing contracts.

Actions for Non Compliance

The Wage and Hour Division may require payment of back wages. The Secretary of Labor may sue the employer. An employee may file a private suit against the employer. A 2-year statute of limitations applies to the recovery of back pay. Certain willful violations have a 3-year statute of limitations.

For Updates and More Information

As with most federal legislation, the Fair Labor Standards Act of 1938 is constantly being reinterpreted, clarified, and amended. For updates and more information contact:

U.S. Department of Labor, Wage and Hour Division
646 Federal Office Building
200 North High Street
Columbus, OH 43215
(614) 469-5678

Sources

U.S. Department of Labor Employment Standards Administration Wage and Hour Division, "The Fair Labor Standards Act of 1938, as Amended," WH Publication 1318, Revised August 1991.

U.S. Department of Labor Employment Standards Administration Wage and Hour Division, "Defining the Terms - Executive, Administrative, Professional and Outside Sales," WH Publication 1281, Revised May 1993.