Fair Labor Standards Act (FLSA) Flashcards
Record-keeping
- Employers must maintain accurate employee records, including:
- Employee’s name and Social Security number.
- Hours worked each day and total hours per workweek.
- Basis of wage payment (e.g., hourly, salary, commission).
- Regular hourly pay rate and total earnings.
- Overtime earnings and wage deductions.
- Pay period dates and payment amounts.
Exempt employees
- Not entitled to overtime pay.
- Must meet specific criteria, such as being paid on a salary basis and earning a minimum of $684 per week ($35,568 annually).
- Common exemptions: executive, administrative, professional, outside sales, and certain IT positions.
Non-exempt employees
- Eligible for overtime pay for hours over 40 per week.
Meal and Break Periods
- The FLSA does not require meal or rest breaks, but when provided:
- Short breaks (under 20 minutes) are compensable.
- Meal periods (30+ minutes) are not compensable if the employee is fully relieved of duties.
Equal Pay
- Requires employers to pay men and women equally for equal work under similar working conditions, per the Equal Pay Act (EPA) (part of FLSA).
Compensable Time
- Includes time worked and certain non-productive times like:
- Training time.
- Waiting periods required by the employer.
- On-call time if the employee must remain on-site or within a restricted area.
- Travel time if it’s part of the employee’s principal activities.
Non-Exempt Employees Cont.
Non-exempt employees are entitled to:
* Minimum wage (federal or state, whichever is higher).
* Overtime pay: At least 1.5 times their regular hourly rate for hours worked over 40 in a workweek.
Qualifications
1. Hourly Pay:
* Most hourly employees are classified as non-exempt.
2. Job Duties:
* Typically involve manual labor, clerical work, or routine tasks.
3. Salary Threshold:
* If paid on a salary basis, earning less than $684 per week ($35,568 annually) automatically qualifies the employee as non-exempt, regardless of duties.
Exempt Employees Cont.
Exempt employees are not entitled to overtime pay or minimum wage protections. To qualify as exempt, an employee must meet all three tests:
A. Salary Basis Test
- The employee must be paid a fixed salary, regardless of the number of hours worked.
- Partial-day deductions are not allowed unless for certain circumstances like unpaid leave under FMLA.
B. Salary Level Test
- The employee must earn at least $684 per week ($35,568 annually).
- Highly compensated employees (HCEs) earning more than $107,432 annually may also qualify for exemption with less strict duties requirements.
C. Duties Test
The employee’s job duties must primarily involve executive, administrative, or professional work as defined by the FLSA. Common exemption categories include:
1. Executive Exemption:
* Primary duty: Managing the enterprise or a department.
* Supervises at least two full-time employees (or equivalent).
* Has authority to hire, fire, or make significant recommendations about employment status.
2. Administrative Exemption:
* Primary duty: Office or non-manual work related to management or general business operations.
* Exercises discretion and independent judgment on significant matters.
3. Professional Exemption:
* Primary duty: Work requiring advanced knowledge in a field of science or learning, typically acquired through a prolonged course of specialized study (e.g., doctors, lawyers, engineers).
* Includes creative professionals (e.g., artists, writers, actors) if their work requires originality and talent.
4. Computer Employee Exemption:
* Applies to computer systems analysts, software engineers, or similar roles.
* Must be paid either:
* A salary of at least $684 per week, or
* An hourly rate of at least $27.63 per hour.
* Primary duties include system analysis, programming, or designing computer systems.
5. Outside Sales Exemption:
* Primary duty: Making sales or obtaining contracts or orders.
* Regularly works away from the employer’s place of business.
* No minimum salary required.
6. Highly Compensated Employee (HCE) Exemption:
* Earns at least $107,432 annually.
* Performs at least one exempt duty from the executive, administrative, or professional categories.
FLSA Exemptions
The FLSA does not cover:
1. Independent contractors (not considered employees under FLSA).
2. Certain employees in small farms.
3. Workers in executive, administrative, or professional roles (if meeting exemption tests).
4. Employees of seasonal recreational or amusement businesses.
Fair Labor Standards Act (FLSA)
The Fair Labor Standards Act (FLSA) establishes key policies that regulate minimum wage, overtime pay, record-keeping, and child labor standards for most employees in the United States. Here’s a comprehensive breakdown of its policies:
