The Fair Labor Standards Act (FLSA) is a federal law that guarantees minimum wage and overtime pay for many workers. Workers whose FLSA rights are violated can join together and file a special type of class action lawsuit known as a collective action.
Enforced by the U.S. Department of Labor, the FLSA protects more than 130 million American workers. Workers are also covered under state laws that may in some cases provide stronger protections than the FLSA.
Wage and hour collective and class actions, already among the most common types of employment law litigation, are expected to continue at a strong pace due to recent legal developments affecting independent contractor classification, overtime regulations, and increases in the minimum wage.
Employees’ awareness of their ability to bring legal action for violations of wage and hour laws is critical for ensuring that their rights—and the rights of all workers—are safeguarded. If you feel that management is treating workers improperly, get in touch with ClassAction.com for a free case review.
Brief History of the FLSA
The Fair Labor Standards Act of 1938 was a landmark piece of legislation that banned child labor, set the first minimum hourly wage (at 25 cents per hour), and established a maximum workweek of 44 hours.
The FLSA fulfilled FDR's vow that “Something has to be done about the elimination of child labor and long hours and starvation wages.”
A legacy of President Franklin D. Roosevelt’s New Deal and a major victory for the labor movement, the FLSA fulfilled the President’s vow that “Something has to be done about the elimination of child labor and long hours and starvation wages.” The FLSA was a direct response to the Great Depression, a period when many employers exploited the tight labor market by subjecting workers (including children) to harsh conditions and long hours.
While maximum hours and minimum wages were taken up on the state level prior to the election of FDR, the Supreme Court routinely struck down labor laws. Indeed, it would require three sessions of Congress and a tireless effort on the part of supporters to finally get the FLSA passed.
In 1940 the work week under the FLSA was reduced from 44 to the current 40 hours per week. A 1963 FLSA amendment prohibited gender-based pay differences. Minimum wage amendments to the FLSA have also been instituted, including most recently in 2009, when the federal minimum wage was raised from $6.55 to $7.25.
The FLSA mandates that all covered, nonexempt workers (see below) be paid not less than $7.25 per hour. Many states and even some municipalities, however, have minimum wages that exceed the federal rate. Employees are entitled to whichever applicable minimum wage (state, federal, or municipal) is higher.
Massachusetts, California, and the District of Columbia, have minimum wages of $10.00 per hour or higher. Twenty-nine states, plus Washington DC, have minimum wages greater than the federal minimum wage. Eleven states (AZ, CO, FL, MO, MT, NJ, NV, OH, OR, SD, and WA) have a minimum wage linked to the consumer price index that typically increases each year.
City minimum wages are even higher than state minimum wages in some municipalities. SeaTac, Washington has a minimum wage of $15.24/hour, and several cities are set to raise their minimum wages to $10.00 - $15.00 by 2016-2021. City minimum wage laws take precedence over state and federal wage laws.
Servers and Other Tipped Employees
The FLSA defines tipped employees as those who customarily and regularly receive more than $30 per month in tips.
Wait staff and other tipped employees are entitled to the FLSA statutory minimum wage of $7.25/hour, unless their state minimum wage law mandates a higher rate of pay. Employers must pay tipped workers a cash wage of at least $2.13/hour, unless the state law is higher. If the minimum cash wage of $2.13/hour, plus tips, does not equal $7.25/hour, the employer must make up the difference.
Tips are the sole possession of tipped workers. Employers may only claim a “tip credit” not to exceed $5.12/hour towards its minimum wage obligation (the minimum wage of $7.25 minus the minimum cash wage of $2.13 = $5.12), except in states that establish a different “tip credit” (such as Florida, which has a maximum $3.02 tip credit per hour).
The only situation in which an employee does not retain sole possession of tips is when there is a valid tip pooling or sharing arrangement among tipped workers. An “invalid tip pool” is one that includes employees who do not customarily and regularly receive tips (such as dishwashers and cooks). Employers may not retain tips from a valid tip pool for any purpose other than a tip credit.
Employers are also barred from making deductions for walk-outs (i.e. “dine and dash”), breakage, cash register shortages, or uniforms that reduce a tipped worker’s hourly wage below the minimum wage.
The FLSA requires that after 40 hours of work in a workweek, covered, nonexempt employees be paid overtime of at least 1.5 times an employee’s regular pay rate. For example, if a workers regular rate of pay is $10.00/hour, he or she would be entitled to $15.00/hour in accordance with FLSA overtime pay requirements.
As is the case with minimum wage laws, some states have their own overtime laws. When both state and federal overtime laws apply, the employee is owed overtime based on the law that provides higher overtime pay. Some states, for example, require overtime pay after eight hours worked in a day, or for more than six days worked in a workweek. Double overtime may also be required in some states under certain circumstances (double time pay is not required under the FLSA).
Workers Governed by the FLSA
FLSA minimum wage and overtime protections apply only to covered, nonexempt workers. A workers must also be considered an “employee” of the employer (not an independent contractor) in order for FLSA provisions to apply.
Some employees are exempt from FLSA overtime pay provisions, while some are exempt from both the minimum wage and overtime pay provisions. Workers not receiving FLSA wage and overtime protections may have similar rights under other laws or through a specific employment agreement.
The FLSA covers employees of certain “enterprises” as well as individuals whose work involves interstate commerce.
Workers for any of the following enterprise types should be covered by the FLSA:
- Federal, state, or local government agencies
- Hospitals or institutions that care for the sick, aged, mentally ill or mentally retarded who live on the premises (including public, private, for profit and non-profit hospitals and institutions)
- Pre-schools, K-12 schools, colleges, or schools for handicapped or gifted children (including public, private, for profit, and non-profit schools)
- Companies/organizations with annual sales of $500,000 or more
Workers not eligible for FLSA enterprise coverage are still covered if their work regularly involves interstate commerce. Although “interstate commerce” is a general term, the courts have interpreted it in such a way that most workplaces are covered.
Some workers are exempt from the FLSA’s overtime and minimum wage provisions. Exemptions are based on how much a worker is paid, how they are paid (i.e. salary or hourly), and the job duties they perform.
The following lists are not all-inclusive. If you have questions about whether you an exempted worker, get in touch with an employment law attorney.
Overtime Pay Exemptions
The following workers are exempt from overtime pay provisions:
- Movie theatre employees
- Domestic service workers who live in the employer’s residence
- Railroad and airline workers
- Taxi drivers and truck drivers who drive tractor trailers across state lines
- Some commissioned retail and service industry workers
- Auto, truck, trailer, farm equipment, boat, and aircraft sales workers
- Some auto, truck, and farm equipment clerks and mechanics
Minimum Wage and Overtime Pay Exemptions
The following workers are exempt from both overtime pay and minimum wage provisions:
- Executive, administrative, professional, computer, and outside sales employees
- Seasonal employees of amusement or recreational establishments
- Employees of small newspapers and newspaper delivery workers
- Fishing operation employees
- Agricultural workers
- Casual babysitters
A new overtime pay rule for Executive, Administrative, and Professional workers is set to take effect December 1, 2016. The rule, which redefines the salary and compensation levels needed for white collar workers to be exempt from FLSA overtime regulations, is expected to extend overtime protections to more than 4 million workers during its first year.
Were Your Workers’ Rights Violated? We Can Help.
You work hard, but your employer may be shortchanging you in order to boost their own bottom line.
ClassAction.com wants workers to know that they have rights. A violation of your workers’ wage and hour rights could qualify you for legal action that provides lost wage recovery.
To learn more, schedule a free case review.