Fair Labor Standards Act (FLSA)

What is FLSA?

The Fair Labor Standards Act (FLSA) is a U.S. federal law enacted in 1938. It establishes standards for minimum wage, overtime pay, recordkeeping, and child labor.

The main goal of the FLSA is to protect workers from unfair pay and unsafe work practices.

It applies to:

• Private-sector employers
• Federal, state, and local government employers

Why FLSA Compliance Matters

Understanding FLSA rules helps employers:

• Avoid fines and legal issues
• Pay employees fairly
• Maintain clear payroll records
• Promote trust and transparency

Key Provisions of the FLSA

The FLSA focuses on four main areas:

• Minimum wage
• Overtime pay
• Recordkeeping
• Child Labor Standards

Each area plays a key role in fair labor practices.

Minimum Wage

Federal Minimum Wage

• The federal minimum wage is $7.25 per hour
• Some states and cities require a higher wage
• Employers must always follow the highest applicable rate

Tipped Employees

• Employers may pay tipped workers a direct wage of $2.13 per hour
• Tips + direct wages must equal at least $7.25 per hour
• If tips fall short, the employer must pay the difference

Overtime Pay

Overtime Requirements

Non-exempt employees must be paid overtime for any hours worked over 40 in a workweek.

The overtime rate is 1.5× the employee’s regular pay rate.

Overtime must be clearly reflected on employee pay stubs.

Exemptions

Some employees are exempt from overtime pay, including:

• Executive employees
• Administrative employees
• Professional employees
• Outside sales employees
• Certain computer employees

Properly classifying employees as exempt or non-exempt based on their job duties and salary is essential to avoid legal issues.

Recordkeeping Requirements

Employers must keep accurate records of hours worked and wages paid to employees. This includes:

• Employee name, address, and Social Security number
• Hours worked each day and total hours worked each workweek
• Pay type (hourly, salary, piecework)
• Regular pay rate
• Straight-time and overtime earnings
• Wage additions or deductions
• Total wages paid each pay period
• Date of payment and the pay period covered by the payment

Child Labor Standards

The FLSA sets rules for employing minors. These rules limit the hours they can work and the types of jobs they can perform. They are designed to protect the health and safety of young workers.

Under 14 Years Old

Minors under 14 can work only in specific jobs, such as:

• Delivering newspapers
• Babysitting
• Acting
• Certain agricultural work

Ages 14–15

• Can work only in non-hazardous jobs
• Limited hours and times of day
• Work must be outside of school hours
• Jobs must be non-manufacturing and non-mining

Ages 16–17

• Can work in any non-hazardous job
• No limits on hours worked
• Still prohibited from hazardous occupations as defined by the Secretary of Labor

Compliance Tips for Employers

Following these practical strategies helps employers stay compliant with FLSA regulations and maintain a fair, safe workplace.

Classify Employees Correctly

• Properly classify employees as exempt or non-exempt based on job duties and salary.
• Misclassification can lead to legal penalties and fines.
• Review job descriptions regularly to ensure they reflect actual responsibilities.

Maintain Accurate Records

• Use reliable timekeeping systems to track hours worked.
• Accurate records prevent disputes and ensure overtime compliance.
• Keep payroll records for at least three years.
• Consider electronic systems to simplify recordkeeping and reporting.

Understand State and Local Laws

• Some states and localities offer stronger worker protections than the FLSA.
• Always follow the law that benefits employees most.
• Regularly review state and local labor laws, including minimum wage and overtime rules.

Training and Education

• Educate employees about their rights under the FLSA.
• Regular training prevents misunderstandings and promotes transparency.
• Provide supervisors and managers with training to identify and handle compliance issues.

Conduct Regular Audits

• Regularly audit payroll and employment practices to ensure compliance.
• Early audits help catch and correct issues before violations occur.
• Consider hiring an external auditor for an objective review of your compliance practices.

Additional Best Practices

• Consult HR or employment law professionals
• Update company policies when laws change
• Communicate clearly about pay and work hours

Conclusion

FLSA compliance is essential for every employer.

By following wage, overtime, recordkeeping, and youth labor rules, you create a fair and lawful workplace.

Regular training, audits, and accurate pay stub documentation help protect both employers and employees.

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We have updated this article from its original publication date of January 29, 2026.