The Fair Labor Standards Act (FLSA) is the federal law requiring employers to pay minimum wage and overtime. If you work more than 40 hours in a week, you're entitled to time-and-a-half pay for the overtime hours. The law applies to most private employers and covers millions of workers nationwide.
What does the FLSA do?
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 does overtime work 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 × 1.5 = $45 per hour × 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.
What are the FLSA exemptions?
The FLSA does not apply to every employee. There are exemptions for certain categories of workers: executive, administrative, professional, and a few others.
The employer bears the burden of proving every element of any exemption it claims. It is not enough for the employer to call someone a "manager" or a "professional." The employee's actual job duties must satisfy the regulatory test for that 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.
How does FLSA enforcement work?
The FLSA gives employees a private right of action under 29 U.S.C. § 216(b). Workers do not have to file with a government agency first. They can hire a lawyer and sue directly.
That structure makes wage and hour claims economically viable for employees. I handle these cases on a contingency fee basis. If there is no recovery, you pay nothing, not even the costs.
Workers can also bring a collective action, joining other employees who suffered the same violation by the same employer. If a group of workers was wronged in the same way, the collective action multiplies the pressure and the damages.
What damages can you recover under the FLSA?
If you win an FLSA case, you recover three things:
Back pay. All the overtime pay you should have been paid but were not. Calculated from the date of the violation back to the beginning of the statute of limitations.
Liquidated damages. An equal amount on top of the unpaid wages, doubling the recovery. Congress provided this to deter employer wrongdoing. If you are owed $20,000 in back pay, the liquidated damages add another $20,000, for a total of $40,000.
Attorney's fees and costs. That structure is what makes it possible for me to take these cases on a contingency fee basis. If there is no recovery, you pay nothing, not even the costs.
What is the FLSA 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 does the FLSA matter?
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 for overtime.
Violations are common. I see automatic lunch deductions, misclassified independent contractors, salaried workers denied overtime, off-the-clock work, and many 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.
If you think your employer has violated the FLSA, whether unpaid overtime, minimum wage violations, off-the-clock work, or misclassification, reach out. I handle these cases on a contingency fee basis. If there is no recovery, you pay nothing, not even the costs.
I handle FLSA cases nationwide.
Call me at (512) 799-2048 for a free consultation.