This is the first article of three that will focus on the Fair Labor Standards Act (FLSA) and the requirements of employers with regards to the payment of overtime. This article will focus on what employers and employees are required to comply with in accordance with the regulations of the FLSA. The second article will focus on the exemption classifications and how to determine if employees are either exempt from overtime laws or not and the third article will focus on how public agencies are different when it comes the regulations of the FLSA with regards to fire and police department employees.
The Fair Labor Standards Act (FLSA) is a government regulation that defines which employees are eligible for overtime payments at a rate of time and one-half for all hours worked over 40 in a workweek. The regulation is fairly straight forward in its explanation. However, many employers continue to not be in compliance with the regulation. For-profit, non-for-profit and all public agencies must comply with the FLSA. However, compliance rules for non-for-profits and for-profit entities may be a little different compared to public agencies.
First of all, the FLSA covers all employers regardless of how many employees there are in an organization, unless covered by a specific exemption. Employers subject to the FLSA include:
- All enterprises engaged in interstate commerce or the production of goods for interstate commerce.
- All hospitals, schools, and public agencies, regardless of size.
Small businesses that are not engaged in interstate commerce and have an annual gross volume under $500,000 are not covered. However, employees of firms who are not covered by the FLSA may still be subject to its provisions if they are individually engaged in interstate commerce or in the production of goods for interstate commerce. Employees who do at least one of the following are included:
- Work in communications or transportation.
- Regularly use the mail, telephones, or telegraph for interstate commerce, or keep records of interstate transactions.
- Handle, ship or receive goods moving in interstate commerce.
- Regularly cross State lines in the course of employment.
- Work for independent employers that contract to do clerical, custodial, maintenance, or other work for firms engaged in interstate commerce or in the production of goods for interstate commerce.
There are also specific exemptions from the overtime requirements of the FLSA and some of them include:
- Employees of interstate motor carriers, airlines, and railroads.
- Outside buyers of poultry and dairy products.
- Any employee employed as a seaman.
- Motor vehicle sales and service personnel.
- Trailer, boat, or aircraft salespeople not working for manufacturers.
- Certain drivers and helpers in local delivery.
- Agricultural employees, including employees working for non-for-profit or cooperative agricultural water storage or suppliers.
- Employees engaged in the initial transportation of fruits and vegetables from a farm.
- Taxi drivers.
- Employees of police and fire departments with fewer than five employees.
- Live-in domestic workers.
- Movie theater employees.
Employees who have partial exemptions from the FLSA’s overtime requirements, include:
- Certain employees of amusement and recreational establishments located in national parks and similar facilities if paid overtime for hours after 56-hours in a workweek.
- Bulk or wholesale petroleum distributors if paid overtime for hours after 56-hours in a workweek.
- Employees receiving literacy training for ten-hours per workweek.
- Hospital and nursing home employees if paid overtime after eight-hours per day or 80-hours during a two-week period.
When employers are trying to determine whether an employee meets the requirements under the FLSA to be exempt from overtime laws, they must first determine if the employee meets both the salary basis and duties requirements of the tests for each exemption classification. These regulations will be discussed in the second article in the series of three.
For additional information on whether an employer must comply with the FLSA, please contact us at www.newfocushr.com or refer to the Department of Labor – Wage and Hour Division website at www.dol.gov/whd .
Written by: Kristen Deutsch, M.B.A., CCP