Wage and Hour Laws
The Fair Labor Standards Act (FLSA) sets basic minimum wage and overtime pay standards. Employers are required to pay overtime wages to certain employees after 40 hours of work in a week. In some states, overtime must be paid after 10 hours in a day, regardless of how many hours are worked during the week. Overtime rates must be at least one and a half times the regular rate of pay. The FLSA does not require companies to provide holiday pay, sick pay, paid or unpaid vacation time, or severance pay.
Generally, federal law does not require companies to provide meal or rest periods. However, if a company does provide a short break (usually 5 to 20 minutes), then the FLSA requires the company to count that time as compensable work hours. Under the FLSA, companies must treat any required “pre” and “post” work activities as compensable time. Examples include preparing tools or work surfaces, cleaning tools or work surfaces, and meeting at a central location for transportation to a job site.
Not all employees are covered by FLSA wage and hour laws. Under the terminology used by the FLSA, “nonexempt” employees are entitled to overtime pay, whereas “exempt” employees are not. An employee must be careful to properly classify employees as exempt or nonexempt based on the FLSA guidelines. If employees are incorrectly classified, they may be eligible to receive back overtime pay and other compensation via a lawsuit under the FLSA.
Generally speaking, employees are exempt from the overtime pay provisions of the FLSA if they:
- Are paid less than $455 per week during a year,
- Are paid a salary rather than an hourly wage, and
- Work in an exempt industry (e.g., a movie theater or many agricultural jobs) or perform “exempt” job duties, which are either administrative, professional or management
Employers are encouraged to seek qualified legal advice if they have questions about whether an employee should be classified as exempt or nonexempt.