Fair Labor Standard Act of 1938 ( FLSA)

Nature:

• Ist federal legislation for compensation in private sector
• Administered by wage and hour division of Dept. of labor

Applicability- Two categories

• Enterprise coverage -Having 2 employee with atleast $500,000 sales or employers who are hospital school or govt. agency.
• Individual coverage- Those companies that are involved in Interstate business.

Area of FLSA

• Introduce minimum wage for covered employees
• OT payment
• Identify the criteria that are exempted under FLSA
• Limiting work condition for children
• Record keeping rules

Exempted classification :

• If they are paid more than $ 455 per week .

NB: check the latest amendment and laws regarding exempted categories

• Have supervision of 2 or more full time employees
• Have the authority to hire fire, promote, evaluate
• Performs work that requires specialized knowledge acquired through intellect instruction .
• Those involved in original and creative work
• Those that impart knowledge in school system
• Those that are paid in salary

Minimum wage : Check your state current minimum wage . It varies from state to state.


Overtime:

• For non exempted employee its 1.5 times the regular wage rate, for all compensable time work that exceeds 40 hours in a work week .
• Regular rate of pay includes Basic Pay + non discriminatory bonus, shift premium, production bonus and commission.
• It does not includes discretionary bonus , employees contribution to benefit plans , pays for unworked hours.

Compensatory off or comp off- Public employees compensate with comp off that is 1.5 times the hours worked as OT rather than compensation in cash.
For eg if the worker worked for 20 hours OT then he would get 1.5 * 20=30 hours comp off.

NB: FLSA requires that OT be paid on time worked and not on time compensated. Therefor no OT be paid on sick pay , holiday pay , vacation Pay and jusy duty pay.


Child Labour-

• Children under 14 cannot work under FLSA
• 14-15 age can work in non harzardous , non mining and non farming outside school hours
• they can work not more than 3 hours a day or 18 hours a week in a school days
• Not more than 8 hours on a non school days
  
• Can work between 7.00 am -7.00 pm and in summer from 7.00 am to 9.00 pm.

Record Keeping : It can be positive record keeping or exceptional record keeping.
In positive record keeping actual hours worked, along with vacation, sick and other time off are recorded.
In exceptional only the changes to the regular work schedule are recorded.

Note : Employee Vs Independent Contractor:
An employer has no obligaton under FLSA to self employed independent contractor. Therefore it is critical that organizaton clearly identify which of its workers are employees ( covered by FLSA) and which are independent contractors.