What is the Fair Labor Standards Act?

The Fair Labor Standards Act is the federal wage and hour law enacted by Congress in 1938. It establishes the federal minimum wage, requires overtime pay at one-and-a-half times the regular rate for hours over 40 in any workweek, and sets recordkeeping requirements for employers. The FLSA is enforced by the Department of Labor's Wage and Hour Division and through private civil lawsuits brought by workers. It applies to most private-sector employees and establishes a floor for wages that no employer can negotiate around, no matter what a contract says.

Who does the FLSA cover?

Most workers are covered by the FLSA under one of two theories. Enterprise coverage applies when the employer has annual gross revenues of at least $500,000 or is engaged in certain activities like operating schools, hospitals, or government agencies. Individual coverage applies when the employee personally engages in interstate commerce as part of their job duties, even if their employer is smaller. The practical effect is that most workers in the country fall under the FLSA. The statute's default is coverage; exemptions are the exception, and they have to be proven by the employer.

What is the FLSA overtime rule?

The overtime rule is straightforward: for every hour you work over 40 in a workweek, your employer must pay you at least one-and-a-half times your regular hourly rate. The workweek is a fixed, recurring seven-day period, and overtime is calculated within each workweek independently. Hours from different weeks cannot be averaged together. A specific exemption has to apply for the overtime obligation to disappear, and most exemptions are narrower in practice than employers claim. If you work the hours, you're owed the premium.

What are FLSA exemptions?

Exemptions are specific, narrow categories where Congress or the DOL has decided that the overtime requirement doesn't apply. The most commonly invoked are the white-collar exemptions: executive, administrative, and professional. Each requires both a salary of at least $684 per week and a detailed duties test based on what you actually do at work. There are also exemptions for certain agricultural workers, transportation workers, and a handful of other specific occupations. Employers invoke exemptions constantly, but the actual legal requirements are strict. Most workers who are told they're exempt don't actually qualify.

What are FLSA damages and attorney's fees?

FLSA damages include the full amount of unpaid wages owed, plus liquidated damages in an equal amount, which effectively doubles the recovery. The only way an employer avoids liquidated damages is to prove it acted in good faith with a reasonable basis for believing its conduct was lawful. That's a high standard that most employers can't meet. The lookback period is two years for standard violations and three years for willful ones. I handle FLSA cases on contingency, meaning if there is no recovery, you pay nothing, not even the costs.

What Is the FLSA? The Fair Labor Standards Act Explained

What the FLSA Does

The Fair Labor Standards Act, passed in 1938 and amended multiple times since, does four main things:

1. Requires minimum wage. Employers must pay at least the federal minimum wage ($7.25 per hour as of this writing) for every hour worked. Many states have higher minimum wages, and the higher wage applies.

2. Requires overtime pay. For any week an employee works more than 40 hours, the employer must pay time-and-a-half (1.5 times the regular rate) for each hour over 40. This applies to non-exempt employees. That time-and-a-half calculation includes all compensation, not just hourly wages, but bonuses, commissions, and other pay.

3. Regulates child labor. The FLSA restricts the types of work children can do and the hours they can work. This isn't relevant to my practice, but it's part of the statute.

4. Requires recordkeeping. Employers must keep records of hours worked and pay. These records are evidence in wage disputes.

The FLSA is a federal floor, not a ceiling. States can (and do) provide greater protections. But the FLSA's protections apply nationwide to all covered employees.

Who Is Covered by the FLSA

The FLSA covers employees of companies that meet one of two tests: the enterprise coverage test or the individual employee coverage test.

Enterprise coverage. A business meets enterprise coverage if it has gross annual sales of at least $500,000 and is involved in interstate commerce (buying, selling, or handling goods that move across state lines, or providing services that impact interstate commerce).

Most private employers with $500,000 in annual revenue are covered. That's a low threshold. A small plumbing company, a local staffing agency, a regional healthcare system, all likely covered.

Individual employee coverage. Even if the employer doesn't meet enterprise coverage, an individual employee is covered if the employee's work involves interstate commerce. This is broad. If you:

Process checks from other states
Handle credit cards or payments (which move across state lines)
Communicate with out-of-state customers or clients
Work with goods that came from or will go to other states
Provide services that affect interstate commerce in any meaningful way

...you're covered under individual employee coverage.

The FLSA is intentionally broad. Congress didn't want employers to use a technicality to avoid wage and hour obligations.

What's not covered: employees of very small businesses (some exceptions apply), certain employees of agricultural employers, some employees of seasonal amusement parks or specific recreational establishments, and certain other narrow categories.

If you work in the private sector for a business of any meaningful size, you're almost certainly covered.

How Overtime Works Under the FLSA

The overtime rule is straightforward, but it's often misapplied.

For any workweek in which you work more than 40 hours, you're entitled to overtime pay for the excess. Here's the formula:

Identify your regular rate of pay (total compensation divided by hours worked).
For hours over 40 in the week, multiply the regular rate by 1.5.
Pay that amount for each overtime hour.

The workweek is 168 consecutive hours. The employer sets the workweek (e.g., Monday through Sunday). Once set, the workweek is fixed, and overtime is calculated weekly, not monthly or annually.

If you work 45 hours in Week 1 and 35 hours in Week 2, you get overtime for 5 hours in Week 1. The 35 hours in Week 2 don't roll over or average out. Each week stands alone.

Here's an example. You earn $1,500 per week on a salary basis. You work 50 hours in a week. Your regular rate is $1,500 / 50 = $30 per hour. For the 10 hours over 40, you owe overtime: $30 x 1.5 = $45 per hour x 10 hours = $450. Total owed: $1,500 + $450 = $1,950.

Wait, but you're salaried. Doesn't that matter? No. The FLSA requires overtime pay based on hours actually worked, regardless of whether you're paid a salary or an hourly wage.

The regular rate includes bonuses, commissions, and other compensation, not just base hourly or salary pay. If you earned a $5,000 bonus last month, that bonus spreads across the weeks you worked that month for purposes of calculating the regular rate.

FLSA Exemptions: What They Are and Aren't

The FLSA doesn't apply to all employees. There are exemptions for certain categories of workers: executive, administrative, professional, and a few others.

But exemptions are narrow and must be proven. It's not enough for the employer to call someone a "manager" or "professional." The employee's actual job duties must fit the exemption.

For the executive exemption: you must manage a department or subdivision, direct at least two employees, have authority to recommend hiring and firing, and exercise discretion. You can't be exempt just because you're called a manager.

For the administrative exemption: your work must relate to management policies or general business operations, and you must exercise discretion and independent judgment on matters of significance.

For the professional exemption: you must be a recognized professional (lawyer, doctor, engineer, architect, accountant, teacher, nurse) or perform work requiring advanced specialized knowledge. You can't be exempt just because you have a college degree.

Many employers misapply these exemptions. I've seen hundreds of cases where the employer classified a worker as exempt when the worker's duties clearly don't fit. When exemptions are misapplied, the worker is entitled to all overtime that should have been paid.

FLSA Enforcement: Private Right of Action

Here's what makes the FLSA powerful: workers can sue. The FLSA gives employees a private right of action under section 216(b). You don't have to file with a government agency first. You can hire a lawyer and sue directly.

This is critical, because it means wage and hour claims are economically viable for employees. The statute includes a fee-shifting provision (section 216(b)) that makes it possible for attorneys to take these cases on contingency with no upfront cost to the worker.

You can also file a collective action, bringing other employees together to sue the same employer for the same violation. If multiple employees have been wronged the same way, the collective action multiplies the pressure and the damages.

Damages: What You Recover

If you win an FLSA case, you recover three things:

Back pay. All the overtime pay you should have been paid but weren't. Calculated from the date of violation back to the beginning of the statute of limitations.

Liquidated damages. An equal amount in damages, doubling your recovery. Congress provided this to deter employer wrongdoing. If you're owed $20,000 in back pay, you're also owed $20,000 in liquidated damages, for a total of $40,000.

Attorney's fees and costs. The FLSA's fee-shifting provision makes it possible for attorneys to take these cases on contingency, with no upfront cost to the worker.

Statute of Limitations

You have two years from the date of violation to file suit. If the violation was willful (meaning the employer knew the law and violated it anyway, or acted recklessly), the statute of limitations is three years.

Most wage and hour violations are willful. The FLSA has been on the books since 1938. Employers know about it. If they violate it, especially if they have a systematic policy that violates it, courts often find the violation willful.

Why the FLSA Matters

The FLSA is the foundation of worker protections for millions of people. It sets a federal baseline: you must be paid for your work, at a fair rate, with time-and-a-half premium for overtime.

Violations are common. I see automatic lunch deductions, misclassified independent contractors, salaried workers denied overtime, off-the-clock work, and countless other violations. Many employers understand the law and violate it anyway because the potential profits from wage theft outweigh the legal risk in their minds.

That's why the FLSA's fee-shifting provision exists. It makes it economically possible to hold employers accountable.

If you think your employer has violated the FLSA, unpaid overtime, minimum wage violations, off-the-clock work, misclassification, reach out. I handle these cases on contingency. If there is no recovery, you pay nothing, not even the costs.

I handle FLSA cases nationwide. I've recovered millions of dollars for workers over 30 years in employment law, with 15+ years focused exclusively on overtime.

Call me at (512) 799-2048 for a free consultation.