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 the 2017 annual inflation adjustment to Washington's minimum wage.
Updated to reflect IRS final regulations defining 'spouse' for federal tax and benefits purposes.
Several states have filed a lawsuit asking a federal court to nullify new Fair Labor Standards Act (FLSA) overtime regulations from the US Department of Labor (DOL) before they take effect December 1.
Effective December 1, 2016, new regulations from the US Department of Labor will raise the minimum salary for most employees exempt from the overtime requirements of the Fair Labor Standards Act (FLSA) from $455 per week to $913 per week. This calculator can help an employer estimate the costs of different options for compensating employees who are currently classified as exempt but are paid a salary of less than $913 per week.
HR guidance on complying with the Fair Labor Standards Act (FLSA). Support on following all the complex FLSA regulations and standards.