Wage and Hour Q&A for Employers

What is the Fair Labor Standards Act (FLSA)?
The FLSA establishes minimum wage, overtime, recordkeeping and youth employment standards for full and part-time workers in the U.S.  Here is a handy reference guide to understanding the FLSA.

What is the minimum wage and am I required to pay it?

As of 2011, the FLSA requires the following:
$7.25 per hour for non-exempt employees (see below for state requirements)

For youth under 20 years old,
$4.25 per hour for the first 90 calendar days of employment.  Note that this is 90 calendar days starting from the first day of work, not 90 work days that the youth has worked.  Also, it is illegal to fire an employee for the purpose of hiring a youth to replace them.  For more information on youth employment, click here.

For tipped employees,
employers may consider tips as part of their wages, but employers must pay a cash wage minimum of $2.13 per hour.  Also, the employee must make the minimum wage, with a combination of the cash wage minimum and tips.  Otherwise, the employer must make up the difference.  For more information on pay for tipped employees, click here.

Employers are allowed to pay certain employees less than the minimum wage.  Those employees are:
1. students (such as interns)
2. full time students who work in retail, service, or colleges (such as under work-study programs)
3. individuals with physical or mental disabilities where the disability impairs their ability to work productively

Are there different state requirements for wage pay?
Yes.  Certain states have set a higher minimum wage standard than the federal standard.  Check out this comprehensive chart to find out your state’s minimum wage.  Some of the highest are:
Washington $8.67
Oregon $8.50
Connecticut, District of Columbia, Illinois, Nevada $8.25
Vermont $8.15
California, Massachusetts $8.00

What is the difference between an exempt and non-exempt employee?
Non-exempt employees are employees covered under the FLSA who are required to be paid the minimum wage for all hours worked and overtime pay.  Many workers who are paid hourly fall under this category.

Exempt employees are not required to be paid overtime.  The category of exempt employees includes executive, administrative, professional and sales employees.  To qualify for exemption, employees must 1) be paid more than $455 per week, and 2) meet certain job description requirements.  This group of employees is often called “white collar” employees.

Is there a limit on the number of hours I can ask my employees to work?
For adults age 16 and over, there is no limit on the number of hours or number of days the employer can require the employee to work.  However, overtime is required if employees work in excess of 40 hours in a week.

Do I have to pay my employees overtime?
Employees covered by the FLSA must be paid a minimum of 1.5 times their base pay for work over 40 hours per week. 

If my employee works nights and weekends only, but under 40 hours, must they be paid overtime?
No.  Under the FLSA, extra pay for working non-traditional hours is up to the employer and employee to work out; there is no requirement that overtime be paid for evening or weekend work if the employee works under 40 hours.

Image by Flickr user GirlReporter (Creative Commons)


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