Overview: The Fair Labor Standards Act (FLSA) was enacted in 1938, during the depths of the Great Depression. Its goal was to lift the nation back into prosperity by spreading the workload among more workers, thereby alleviating unemployment, and by giving consumers more spending money, thereby spurring the economy.
To accomplish those goals, the law established two main requirements for employers:
Although the Great Depression has passed, the law continues to challenge employers. Few employers set out to deliberately violate FLSA regulations. Rather, most violations are the result of common mistakes, such as:
Employers also often get tripped up by variations between the FLSA regulations and state wage and hour laws. Sometimes the differences can be subtle; other times, they can be significant. But whatever the difference, employers must always comply with whichever law is more favorable to the employee.
Trends: The chances of getting away with noncompliance seem to get increasingly slim with every passing year.
Thousands of lawsuits are filed under the FLSA every year, more than any other federal employment law other than the Employee Retirement Income Security Act (ERISA). At the same time, the U.S. Department of Labor continues to enforce the FLSA regulations aggressively.
The potential liability for noncompliance can be costly, including back wages, attorney fees and civil penalties.
These damages are often multiplied by hundreds or even thousands of employees, since it is relatively easy for large groups of employees to file collective actions under the FLSA. This results in settlements or verdicts that can easily add up to millions of dollars for larger employers.
Author: Michael Cardman, Legal Editor
Updated to reflect forthcoming provisions in the Milpitas minimum wage ordinance.
Updated to reflect forthcoming working time provisions in the West Virginia Safer Workplace Act.
Updated to reflect information on a court ruling clarifying the day of rest law.
Updated to reflect forthcoming legislation repealing the law that allows the Vermont Department of Labor to suspend hours of work restrictions during wartime.
Updated to reflect the lifting of an injunction that had blocked implementation of the St. Louis minimum wage ordinance, effective May 5, 2017.
The US House of Representatives has passed a bill that would amend the Fair Labor Standards Act (FLSA) to allow private-sector employers to offer compensatory time off instead of cash for overtime hours.
Updated to reflect information on a court ruling that the tip credit does not apply to restaurant delivery drivers.
Updated to reflect information on a court ruling rejecting daily overtime on top of weekly overtime for certain employees.
HR guidance on complying with the Fair Labor Standards Act (FLSA). Support on following all the complex FLSA regulations and standards.