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Minimum Wage

Understanding Minimum Wage Under the Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA), also known as the federal Wage and Hour Law, regulates minimum wage, overtime, equal pay, recordkeeping, and child labor for employees of enterprises engaged in interstate or foreign commerce and employees of state and local governments. The U.S. Department of Labor’s Wage and Hour Division administers and enforces the federal FLSA.

The current federal minimum wage under FLSA is $7.25 per hour. The FLSA does not supersede any state or local laws that are more favorable to employees. Therefore, if a state has a minimum wage that is higher than the federal minimum, employers subject to the state minimum wage law are obligated to pay the higher rate to employees working in that state

Hours worked.

"Hours worked" includes all time an employee must be on duty, on the employer's premises, or at any other prescribed place of work, as well as any additional time the employee is permitted to work.

Workweek.

A workweek is a period of 168 hours during 7 consecutive 24-hour periods. A workweek may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of computing minimum wage, each workweek stands alone, regardless of whether employees are paid on a weekly, biweekly, semimonthly, or monthly basis. Compensation from 2 weeks cannot be averaged for purposes of satisfying minimum wage laws.

Nonexempt employees.

An employee is generally covered by the FLSA's minimum wage and overtime pay requirements, unless the employee qualifies for one of the FLSA's exemptions. Employees that do not qualify for an exemption are "nonexempt" employees. An employee who is paid on an hourly basis is usually considered to be nonexempt, regardless of the hourly rate paid. Employees generally classified as nonexempt include clerical, blue-collar, maintenance, construction, and semiskilled workers, as well as technicians and laborers.

Exempt employees.

The FLSA exempts broad categories of "white-collar" jobs from minimum wage and overtime requirements if they meet certain tests regarding job duties and responsibilities and are paid a certain minimum salary. These categories of employees are commonly known as "exempt" employees and include executive, administrative, and professional employees. The FLSA also provides exemptions for outside sales personnel, certain specialized computer personnel, certain highly compensated employees, certain retail sales employees, and employees covered by the Motor Carrier Act (MCA).

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