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Fair Labor Standards Act Q&A

Fair Labor Standards Act (FLSA) Wages and Overtime

Frequently Asked Questions

What is the Fair Labor Standards Act (FLSA)?

The FLSA sets minimum wage, overtime pay, recordkeeping and child labor standards. 

Who does the FLSA apply to?

The FLSA applies to part-time and full-time employees. The FLSA applies to employees in both the private and public sectors.

What is the federal minimum wage rate?

The federal minimum wage rate as of July 24, 2009 is not less than $7.25 per hour for covered nonexempt workers. 

The federal minimum wage rate for individuals under the age of 20 is not less than $4.25 an hour during the first 90 consecutive calendar days of employment with an employer.

Is minimum wage required for employees that receive tips?

Yes. Employers must pay employees receiving tips a cash wage of at least $2.13 per hour. If an employee does not make at least $7.25 per hour from the combination of tips plus the cash wage of $2.13 per hour, the employer is required to pay the difference.

Who is exempt from the minimum wage rate?

The following are examples of employees that are exempt from the minimum wage rate: casual babysitters; employees engaged in fishing operations; employees engaged in newspaper delivery; executive, administrative, and professional employees (including teachers and academic administrative personnel in elementary and secondary schools); farm workers employed on small farms; and outside sales employees.

When is overtime due?

Overtime pay is required after 40 hours of work in a single workweek. The overtime pay rate is one and one-half times the employee’s regular rate of pay.

What is considered a workweek?

The FLSA defines a workweek as a period of 168 hours during seven consecutive 24-hour periods.

Who is exempt from overtime pay?

The Department of Labor has provided exemption tests for certain employees:

Administrative Exemption. To qualify for the administrative employee exemption, all of the following tests must be met: (1) The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; (2) the employee’s primary duty must be the performance of office or non-manual work directly related to the management or general business operations of the employer or the employer’s customers; and (3) the employee’s primary duty includes the exercise of discretion and independent judgment with respect to matters of significance.

Executive Exemption. To qualify for the executive employee exemption, all of the following tests must be met: (1) The employee must be compensated on a salary basis (as defined in the regulations) at a rate not less than $455 per week; (2) the employee’s primary duty must be managing the enterprise, or managing a customarily recognized department or subdivision of the enterprise; (3) the employee must customarily and regularly direct the work of at least two or more other full-time employees or their equivalent; and (4) the employee must have the authority to hire or fire other employees, or the employee’s suggestions and recommendations as to the hiring, firing, advancement, promotion or any other change of status of other employees must be given particular weight.

Computer Employee Exemption. To qualify for the computer employee exemption, the following tests must be met: (1) The employee must be compensated either on a salary or fee basis at a rate not less than $455 per week or, if compensated on an hourly basis, at a rate not less than $27.63 an hour; (2) the employee must be employed as a computer systems analyst, computer programmer, software engineer or other similarly skilled worker in the computer field performing the duties described below; (3) the employee’s primary duty must consist of:

  • the application of systems analysis techniques and procedures, including consulting with users, to determine hardware, software or system functional specifications;
  • the design, development, documentation, analysis, creation, testing or modification of computer systems or programs, including prototypes, based on and related to user or system design specifications;
  • the design, documentation, testing, creation or modification of computer programs related to machine operating systems; or
  • a combination of the aforementioned duties, the performance of which requires the same level of skills.

Outside Sales Exemption. To qualify for the outside sales employee exemption, all of the following tests must be met: (1) The employee’s primary duty must be making sales (as defined in the FLSA), or obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer; and (2) the employee must be customarily and regularly engaged away from the employer’s place or places of business.

Learned Professional Exemption. To qualify for the learned professional employee exemption, all of the following tests must be met: (1) The employee must be compensated on a salary or fee basis (as defined in the regulations) at a rate not less than $455 per week; (2) the employee’s primary duty must be the performance of work requiring advanced knowledge, defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment; (3) the advanced knowledge must be in a field of science or learning; and (4) the advanced knowledge must be customarily acquired by a prolonged course of specialized intellectual instruction.

How is vacation pay, sick pay, and holiday pay computed?

The FLSA does not require pay for time off. This computation is generally included in an employment agreement.

When are pay raises required?

The FLSA does not require employers to provide pay raises. A pay raise is generally discussed between an employer and an employee.


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