Definition: The Fair Labor Standards Act (FLSA) is a federal law that establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting full-time and part-time workers in the private sector and in federal, state, and local governments.
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According to the U.S. Department of Labor’s Wage and Hour Division FLSA overview, the law establishes minimum wage, overtime pay, recordkeeping, and youth employment standards, and it affects most full-time and part-time workers in the private sector and in federal, state, and local governments. For hourly employers, the FLSA defines the basic rules of pay: what counts as work time, the minimum that must be paid for it, when overtime is owed, and what records must be kept.
| Standard | Key federal rule | Source |
|---|---|---|
| Minimum wage | Not less than $7.25 per hour for covered nonexempt workers, effective July 24, 2009 | DOL FLSA overview |
| Overtime | At least 1.5 times the regular rate for hours over 40 in a workweek | DOL Fact Sheet #23 |
| Recordkeeping | Records of hours worked each day and week, pay rates, and wages for nonexempt workers | DOL Fact Sheet #21 |
| Youth employment | Youth employment (child labor) standards | DOL FLSA overview |
The DOL also notes that many states have their own minimum wage laws, and where an employee is subject to both, the employee is entitled to the higher rate. Employers that meet certain criteria may take a partial credit against the minimum wage for tipped employees, known as a tip credit.
DOL Fact Sheet #23 defines the workweek as a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods, that can begin on any day and hour. Overtime is calculated for each workweek separately; averaging hours over two or more weeks is not permitted. The fact sheet also says employees cannot waive their right to overtime by agreement, an employer’s announcement that overtime is unauthorized does not remove the right to pay for overtime actually worked, and overtime must be paid on the regular payday for the period in which it was earned.
Worked example (hypothetical): A nonexempt server is paid $15.00 an hour and earns a $50.00 nondiscretionary attendance bonus in a week she works 45 hours. Her regular rate includes the bonus.
| Step | Calculation | Result |
|---|---|---|
| Straight-time earnings | 45 × $15.00 | $675.00 |
| Add nondiscretionary bonus | $675.00 + $50.00 | $725.00 |
| Regular rate | $725.00 ÷ 45 | $16.111 per hour |
| Overtime premium (half-time) | 5 × $16.111 × 0.5 | $40.28 |
| Total pay | $725.00 + $40.28 | $765.28 |
Fact Sheet #23 explains that the regular rate includes all pay for employment except statutory exclusions, such as discretionary bonuses, gifts, and pay for time not worked due to vacation, holidays, or illness. Check calculations with the overtime calculator or read the FLSA overtime rules guide.
Pay depends on what counts as work. DOL Fact Sheet #22 explains that “employ” includes “to suffer or permit to work,” so work the employer knows about or allows is compensable even if it was not requested. Short rest periods of usually 20 minutes or less count as hours worked, while bona fide meal periods, typically 30 minutes or more with the employee completely relieved from duty, generally do not.
The DOL’s FLSA questions and answers list several things the law does not require, including:
Many of these topics are covered by state or local laws, so the FLSA is a floor, not a complete rulebook.
Some employees are exempt from minimum wage and overtime. DOL Fact Sheet #17A explains the common white-collar exemptions, which generally require a salary of at least $684 per week paid on a salary basis plus qualifying duties. Job titles do not determine exempt status. See exempt employee for details.
DOL Fact Sheet #21 lists required records for nonexempt workers, including the time and day the workweek begins, hours worked each day and week, the regular hourly rate, overtime earnings, and wages paid each period. Payroll records must be kept for at least three years, and records on which wage computations are based, such as time cards and schedules, for two years. Employers may use any timekeeping method that is complete and accurate.
The FLSA sets national minimums, and states and cities often build on top of them. Higher minimum wages, daily overtime, required meal and rest breaks, paid sick leave, pay frequency rules, and scheduling laws all come from state or local law. When both apply, employers generally must follow whichever standard is more protective for the employee. The DOL makes this point directly for minimum wage, noting that employees subject to both federal and state minimum wage laws are entitled to the higher rate. A multi-state employer therefore needs a location-by-location view of its obligations, with the FLSA as the baseline that applies everywhere.
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This is general information, not legal advice.
The DOL states that covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour, effective July 24, 2009. Where state law sets a higher rate, employees receive the higher rate.
Covered nonexempt employees must receive at least time and one-half their regular rate for hours worked over 40 in a workweek.
No. The DOL says the FLSA does not require breaks or meal periods (except break time for nursing mothers) or payment for time not worked such as vacations.
Payroll records for at least three years, and records on which wage computations are based, such as time cards, for two years, according to DOL Fact Sheet #21.