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 FLSA is enforced by the Wage and Hour Division of the U.S. Department of Labor (DOL). The FLSA applies in all states, but states are permitted to develop their own laws and regulations to provide even greater protection for their workers than is provided under federal law. In cases in which the two laws conflict, the law most beneficial to the employee prevails. Therefore, it is essential that employers understand both the state and federal laws.

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. Please see the national Child Labor section. Please see the national Equal Pay/Comparable Worth section. Please see the national Records section. The FLSA is enforced by the Wage and Hour Division (WHD) of the U.S. Department of Labor (DOL). Although the FLSA applies in all states, it permits states to regulate areas not covered by the FLSA and to afford workers greater protections. Where state law and the FLSA conflict, employers must follow the provision that is more favorable to the employee. There are a number of employment practices that the FLSA does not regulate. For example, it does not require vacation, holiday, severance, or sick pay; meal or rest periods; time off for holidays or vacations; premium pay for weekend or holiday work; pay raises or fringe benefits; and a discharge notice, reason for discharge, or immediate payment of final wages to terminated employees.

Employers faced with a pandemic need to know how to manage a variety of wage and hour issues. Federal law has addressed many of the factors to consider when preparing for or working through a pandemic, as outlined below. Keep in mind that individual state laws or collective bargaining agreements may apply as well.

There is no federal law that sets out how often or in what form employers must pay wages to employees. Virtually all states regulate how frequently employers must pay employees their wages. State laws also specify the length of time that may elapse between the end of the pay period and payday. Even in the case of a pandemic, employers must pay employers their wages due for hours worked in a timely fashion. Employers may face fines and penalties for the late payment or nonpayment of wages. If there is a dispute about wages, the employer must pay the employee what it concedes is due. The employee may file a wage claim with the commissioner of Labor to collect any remaining wages the employee believes are owed.

It is important for employers to understand their state laws on final paychecks because many states have enacted laws regarding the payment of wages upon the termination of employment, including accrued vacation. These rules often differ depending on whether the termination is voluntary or involuntary. There is no federal law that sets out how often or in what form employers must pay wages to the employee, but state laws do regulate how frequently employees must be paid. If there is a dispute about wages, the employer must pay the employee what it concedes is due. The employee may file a wage claim with the commissioner of Labor to collect any remaining wages the employee believes are owed.

States often distinguish between voluntary and involuntary termination. Under the most common state provision, employees who are fired or laid off must be paid just after termination; employees who resign must wait until the next regular payday. However, some state laws provide that employees who give their employers sufficient advance notice of their intention to resign are entitled to receive their pay on their final day of work. Some states require that, in addition to wages, employers pay terminating employees for accrued vacation time.

During a pandemic, a company may be looking for assistance in the form of volunteers. Keep in mind that there are strict laws around volunteering under the FLSA.

Private, for-profit companies. According to the federal Department of Labor, in general, covered, nonexempt workers working for private, for-profit employers have to be paid at least the minimum wage and cannot volunteer their services. Due to the possibility of coercion to perform unpaid services, paid employees may not volunteer to perform the same type of services for their employer that they are normally employed to perform. Time spent in work for public or charitable purposes at the employer’s request, under the employer's direction or control, or while the employee is required to be on premises is working time. However, time spent voluntarily in such activities outside of the employee’s normal working hours is not hours worked, as long as the volunteer activities are not the same or similar to the activities the employee is employed to perform. Therefore, the employer must compensate employees for the hours spent volunteering during their normal working hours or when the volunteer work performed is similar to their regular duties. As for those employees who perform duties that are not similar to their regular duties and that are voluntarily performed after their normal working hours, those volunteer activities are not considered hours worked for the purpose of the FLSA.

Religious, charitable, civic, humanitarian, or similar nonprofit organizations. The FLSA recognizes the generosity and public benefits of volunteering and allows individuals to freely volunteer time to religious, charitable, civic, humanitarian, or similar nonprofit organizations as a public service. Volunteers will ordinarily not be considered employees for FLSA purposes if the individuals volunteer for these types of organizations without contemplation or receipt of compensation. Additionally, the volunteer services must be given freely without coercion or undue pressure. According to the federal Department of Labor, individuals who volunteer their services in an emergency relief capacity to private not-for-profit organizations for civic, religious, or humanitarian objectives, without contemplation or receipt of compensation, are not considered employees due compensation under the FLSA. However, employees of such organizations may not volunteer to perform on an uncompensated basis the same services they are employed to perform. Where employers are requested to furnish their services, including their employees, in emergency circumstances under federal, state, or local general police powers, the employer’s employees will be considered employees of the government while rendering such services. No hours spent on the disaster relief services are counted as hours worked for the employer under the FLSA.

Public employees who volunteer. Employees of public agencies may wish to volunteer for the same organization for which they work. That is allowed but only in very limited situations. To preserve employees’ volunteer status, the line between volunteer work and paid work should be clearly defined. When an employee of a public agency wishes to perform volunteer work for the employer, the rules are strict. Unlike private employers, public and not-for-profit employers can allow their employees to volunteer their services to the employer as long as they are doing it for “civic, charitable, or humanitarian reasons.”

Volunteer work performed by public employees must also meet the same additional requirements as employees of private companies for determining volunteer work status.

To volunteer legally for their own employers, employees of public agencies must perform a service that is distinctly different from their ordinary work activities. The challenge is to determine whether the work the employee wishes to do may be treated as noncompensable and, if so, to determine when the employee is wearing an “employee hat” versus a “volunteer hat.”

Here are some examples of volunteer work that is and is not allowed: A paid city police officer cannot perform police or related duties for the city on a volunteer basis; however, an officer may volunteer as a part-time referee in a basketball league sponsored by the city; an employee of the city Parks Department may also serve as a volunteer city firefighter; an office employee of a city hospital may volunteer to spend time with a disabled or elderly person in the same institution during off-duty hours.

Public employees who wish to volunteer services identical to those they normally provide in exchange for salary may offer their services only to a different public agency than their employer. For example, a receptionist at a county tax office could offer telephone answering services at a fundraising event run by a state agency, but a nurse at a state hospital might not be able to volunteer their nursing services at a state-run neighborhood health clinic because both the hospital and clinic could be considered parts of the same public agency.

Exempt employees. Except for a few narrow exceptions, when an exempt employee works for any part of a week, the employee should be paid for a full week. No pay is required when an employee does not work at all during a workweek. No deductions may be made from the employee's compensation for time lost caused by the employer or by the operating requirements of the business. During office closures due to pandemics, inclement weather, disasters, or by the operating requirements of the business, a private employer may direct exempt staff to take vacation or leave bank deductions without jeopardizing the employees’ exempt status. There is no prohibition on an employer giving vacation time and later requiring that the vacation time be taken on specific days. However, an employee will not be considered a salaried employee if the employer deducts from the employee's pay for absences caused by the employer or by the operating requirements of the business. If an employee is ready, willing, and able to work, deductions from pay may not be made for time when work is not available. Therefore, if an employer closes the office because of a pandemic for less than a full workweek, the employer must pay the employee’s full salary even if the employer does not have a bona fide benefits plan; the employee has no accrued benefits in the leave bank; the employee has limited accrued leave benefits, and reducing that accrued leave will result in a negative balance; or the employee already has a negative balance in the accrued leave bank.

Exempt employees should not be docked for less than a full day because to do so would require calculating an hourly wage.

Nonexempt employees. If an employer is unable to provide work to a nonexempt employee during hours that the employee would usually have worked, the employer is not required to pay the employee. Employers only need to pay nonexempt employees for hours worked.

Exempt Employees. Deductions may be made for absences of a full day or more occasioned by sickness or disability if the deduction is made under a bona fide plan, policy, or practice of providing compensation for loss of salary caused by both sickness and disability. Similarly, if the employer operates under a state or private sickness and disability insurance law, deductions may be made for a day or longer if benefits are provided under the particular law or plan.

Sickness and disability deductions are an area of confusion for some employers. It is important to distinguish between deducting from an exempt employee's paycheck and deducting from an employee's allotted sick time. The employer may not deduct from an employee's pay for less than a day's absence for sickness or disability. But, if an employer, for example, provides an employee with 2 weeks of paid sick time by company policy and the employee has used up all of their sick time, an employer may deduct from the employee's paycheck in full-day increments if the employee is out for a day or more. If the employee works for any part of a day, though, and is out sick the remainder of the day, the employer may not deduct from the employee's paycheck.

On the other hand, employers may deduct from an employee's allotted sick time under the company's leave plan in increments of less than a day as long as the employee has not used up their paid sick time.

Nonexempt employees. Employers only need to pay nonexempt employees for hours worked. Nonexempt employees may have earned sick time or paid time off they can use during a pandemic.

Exempt employees. An employer is not prohibited from prospectively reducing the salary of an exempt employee during a business or economic slowdown, provided the change is bona fide and not used to evade the salary basis requirements. This type of salary reduction, not related to the quantity or quality of work performed, will not result in a loss of exempt status, as long as the employee still receives on a salary basis at least $684 per week. On the other hand, deductions from predetermined pay occasioned by day-to-day or week-to-week determinations of the operating requirements of the business constitute impermissible deductions and would result in loss of the overtime exemption. The difference is that the first instance involves long-term business needs, rather than a short-term day-to-day or week-to-week deduction from the fixed salary for absences from scheduled work occasioned by the employer or its business operations.

Nonexempt employees. An employer is not prohibited from prospectively reducing the pay of a nonexempt employee during a business or economic slowdown, provided nonexempt employees are paid at least minimum wage and overtime for all hours worked.

Weeklong furlough for exempt employees. If an employer sets up a weeklong furlough and doesn’t pay exempt employees, there is no risk of losing the employees’ exempt status because the FLSA regulations provide that exempt employees need not be paid for any workweek in which they perform no work.

Partial-week furlough deducting exempt employee pay. If an employee sets up a partial-week furlough and deducts the pay of exempt employees for the furlough days, the employees are at risk of losing their exempt status and may be entitled to overtime.

Partial-week furlough of exempt employees using vacation time. If an employer sets up a partial-week furlough and uses vacation time for the furlough time so that the employees receive their usual salary, there is no risk of losing the exemption. But this requires that every employee on furlough has enough vacation time to cover the furlough.

Permanent furlough arrangement for exempt employees. Employers may set up a permanent change in an employee's usual weekly schedule, such as changing the weekly work schedule from 5 days to 4 days, and altering the employee's salary to match. As long as the exempt employees receive at least the $684 weekly salary required by the FLSA for exempt status, they will remain exempt.

Furloughs for nonexempt employees. Furloughs may be used for nonexempt employees by an employer during pandemics. Employers only need to pay nonexempt employees for hours worked. Employers may reduce nonexempt workers’ hours per week in order to reduce costs during a pandemic.

If an employee is on-call during a furlough day. On-call time must be counted as hours worked when the employee is required to remain on call so that their time is so restricted that the employee cannot use it effectively for personal purposes. If, in the case of standby or on-call status, the restrictions placed on the time of the employee are such that the employee is unable effectively to engage in private pursuits, the time is subject to the control of the employer and constitutes hours worked. Factors to consider include the terms of the employment agreement, if any; physical restrictions placed on an employee while on call; the maximum period allowed by the employer between the time the employee was called and the time the employee reports back to work (response time); the percentage of calls expected to be returned by the on-call employee; the frequency of actual calls during on-call periods; the actual uses of the on-call time by the employee; and the disciplinary action, if any, taken by the employer against employees who fail to answer calls. Some minor restrictions on freedom do not trigger compensation requirements. The more restrictive the on-call policy is, the more likely that a court will conclude the on-call time is compensable working time.

According to the Department of Labor, employers should “be accommodating and flexible with workers impacted by government-imposed quarantines. Employers may offer alternative work arrangements, such as teleworking and additional paid time off to such employees.”

As long as an employee is 16 years old or older, federal law does not limit the number of hours employees can be asked to work. Keep in mind that nonexempt employees must be paid at least minimum wage and overtime for all hours worked. While there are no federal limits on working hours for 16- and 17-year-old workers, many state laws do restrict working hours for these young workers, however, with stricter requirements applicable to employment on school days or evenings before school days. State laws that are more restrictive than federal laws must be followed.

As long as an employee is 18 years old or older, federal law does not limit the type of work employees can be asked to do. The child labor provisions of the FLSA prohibit employers from hiring minors (individuals under the age of 18) to work at dangerous occupations. States also have child labor laws and when state and federal laws differ, the stricter law applies.

In pandemic situations, based on information from public health authorities, employers can require telecommuting. Employers covered by FLSA must monitor hours of work by nonexempt employees and maintain records recording total hours worked each day and workweek. Nonexempt employees are covered by the FLSA's restrictions on minimum wage and overtime regardless of where they perform their jobs, including home offices. Therefore, a telecommuting agreement should require the telecommuter to report hours worked on a daily and weekly basis. Employees may keep timecards, but computer or telephone tracking systems that generate logs of hours worked are more reliable. Covered employers are required to pay employees for all hours worked, regardless of whether they have issued rules prohibiting work beyond a prescribed number of hours. Nonetheless, an agreement should include a provision advising the employee not to work more than a specified number of hours a week without prior approval.

If a workplace closes, there may be some employees who are unable to work from home. Employers only need to pay nonexempt employees for hours worked. If nonexempt employees cannot perform their work from home, then they do not need to be paid. Exempt employees should be paid for any week in which they perform work, with a few very narrow exceptions.

If it is possible, an employer can consider requiring those employees who can work from home to do so. Then, if the government allows, for those employees who cannot perform their work from home, there may be a way to stagger work shifts or space out the few employees who still need to be at the workplace in order to achieve physical distancing in a pandemic situation.

Setting employees up to work at home during a pandemic may require additional costs for the employer, such as computers and tools. Employers may not deduct the cost of these business expenses from an employee’s pay and other material necessary for carrying out the employer's business if the deduction reduces the employee's pay below the minimum wage. Note that employers generally absorb the cost of providing computers to telecommuting employees, rather than passing that cost to their employees.

Employers subject to the FLSA include:

Small businesses that are not engaged in interstate commerce and have an annual gross volume under $500,000 are not covered.

Employees of firms that are not covered by the FLSA may still be subject to its provisions if they are individually engaged in interstate commerce or in the production of goods for interstate commerce. This includes employees who work in communications or transportation; regularly use the mail, telephones, or telegraph for interstate communication, or keep records of interstate transactions; handle, ship, or receive goods moving in interstate commerce; regularly cross state lines in the course of employment; or work for independent employers that contract to do clerical, custodial, maintenance, or other work for firms engaged in interstate commerce or in the production of goods for interstate commerce.

Nonexempt employees are those who are covered by the FLSA minimum wage and overtime pay provisions. An employee who is paid on an hourly basis is usually considered to be nonexempt, regardless of the hourly rate paid. (There is an exception: Computer programmers, systems analysts, and similar employees may be exempt if they are paid at an hourly rate of $27.63 or more.) Employees are also nonexempt if they do not qualify for one of several “white-collar” exemptions. Employees generally classified as nonexempt include, but are not limited to, clerical, blue-collar, maintenance, construction, and semiskilled workers, as well as technicians and laborers.

DOL regulations make it clear that manual laborers or other employees who perform work involving repetitive operations with their hands, physical skill, and energy are nonexempt. Thus, nonmanagement employees in production, maintenance, construction, and similar occupations are nonexempt no matter how highly paid they might be. The regulations also make it clear that police officers, firefighters, paramedics, and other so-called “first responders,” such as detectives, deputy sheriffs, and state troopers, are not exempt employees and are entitled to overtime pay.

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 include executives, administrative employees, professional employees, outside and certain retail sales personnel, and highly compensated individuals. Please see the national Exempt Personnel section.

Employers should periodically review the classification of exempt employees to ensure that they still qualify for exempt status, especially if the company has undergone restructuring or downsizing.

Motor Carrier Act (MCA) exemption. Under the MCA exemption to the FLSA, the overtime provisions of the FLSA do not apply to motor carriers, such as truck drivers and their helpers, operating in interstate commerce. The exemption is not limited to those who ship large amounts of property or ship property as their principal business. A U.S. appellate court has held that the exemption extends to field engineers who carry tools, parts, and equipment in their private cars on interstate trips to install, maintain, and repair computers (Friedrich v. CableData, 974 F.2d 409 (CA-3, 1992)). However, such personnel are still covered by the equal pay, minimum wage, and recordkeeping requirements of the FLSA.

Thus, the MCA overtime exemption applies to employees who are:

Motor carrier or motor private carrier. Motor carriers are persons providing motor vehicle transportation for compensation. Motor private carriers are persons other than motor carriers transporting property by motor vehicle if the person is the owner, lessee, or bailee of the property being transported, and the property is being transported for sale, lease, rent, or bailment, or to further a commercial enterprise.

Employee’s duties. The employee’s duties must include the performance, either regularly or from time to time, of safety affecting activities on a motor vehicle used in transportation on public highways in interstate or foreign commerce. Employees must perform their duties as a driver, driver’s helper, loader, or mechanic. Employees performing these duties meet the duties requirement of the exemption, regardless of the proportion of “safety affecting activities” performed, except where the continuing duties have no substantial direct effect on “safety of operation,” or where such safety affecting activities are so trivial, casual, and insignificant as to be de minimis, so long as there is no change in the duties. Transportation involved in the employee’s duties must be in interstate commerce (across state or international lines) or connect with an intrastate terminal (rail, air, water, or land) to continue an interstate journey of goods that have not come to rest at a final destination. Safety affecting employees who have not made an actual interstate trip may still meet the duties requirement of the exemption if the employer is shown to have an involvement in interstate commerce and the employee could, in the regular course of employment, reasonably have been expected to make an interstate journey or could have worked on the motor vehicle in such a way as to be safety affecting.

The overtime provisions of the FLSA will apply to an employee of a motor carrier or motor private carrier in any workweek that the employee performs duties on motor vehicles weighing 10,000 pounds (lb) or less and the employee’s work, in whole or in part, is that of a driver, driver's helper, loader, or mechanic affecting the safety of operation of motor vehicles weighing 10,000 lb or less in transportation on public highways in interstate or foreign commerce, except vehicles:

The FLSA provides for a number of miscellaneous exemptions from either the minimum wage or overtime requirements or from both.

Minimum wage and overtime exemptions. Among the occupations exempt from both the FLSA minimum wage and overtime provisions are:

Overtime exemptions. Among the occupations exempt from overtime requirements are:

Partial overtime exemptions. A few categories of workers have partial exemptions from the FLSA overtime requirements. These include:

The FLSA states that it is a violation for any person to discharge or in any other manner discriminate against any employee because the employee has filed any complaint or instituted or caused to be instituted any proceeding under the FLSA, has testified or is about to testify in any such proceeding, or has served or is about to serve on an industry committee.

Employees are protected regardless of whether the complaint is made orally or in writing. Complaints made to the WHD are protected, and most courts have ruled that internal complaints to an employer are also protected.

Because the law prohibits any person from retaliating against any employee, the protection applies to all employees of an employer even if the employee’s work and the employer are not covered by the FLSA. The law also applies in situations where there is no current employment relationship between the parties; for example, it protects an employee from retaliation by a former employer.

Any employee who is discharged or in any other manner discriminated against may file a retaliation complaint with the WHD or may file a suit seeking remedies, including, but not limited to, employment, reinstatement, lost wages, and an additional equal amount as liquidated damages.

The FLSA requires for-profit employers to pay employees for their work. Interns and students, however, may not be employees under the FLSA, in which case the FLSA does not require compensation for their work. Interns who qualify as employees rather than trainees, typically must be paid at least the minimum wage and overtime compensation for hours worked over 40 in a workweek. Courts have used the “primary beneficiary test” to determine whether an intern or student is, in fact, an employee under the FLSA. In short, this test allows courts to examine the economic reality of the intern-employer relationship to determine which party is the primary beneficiary of the relationship. Courts have identified the following seven factors as part of the test:

Courts have described the “primary beneficiary test” as a flexible test, and no single factor is determinative. Accordingly, whether an intern or student is an employee under the FLSA necessarily depends on the unique circumstances of each case. If analysis of these circumstances reveals that an intern or student is actually an employee, they are entitled to both minimum wage and overtime pay under the FLSA. On the other hand, if the analysis confirms that the intern or student is not an employee, they are not entitled to either minimum wage or overtime pay under the FLSA.

Nonprofit organizations are not automatically exempt from the FLSA. There are basically two types of nonprofits. First are nonprofits that engage solely in charitable activities and do not engage in commerce. These nonprofit organizations would be exempt from the FLSA. Second are nonprofits that have a charitable purpose but do engage in commerce whether to reach their ultimate goal of charity or to entertain their target audience. These nonprofits are not exempt.

Religious institutions are not automatically exempt from the FLSA. Many religious organizations do operate businesses. The FLSA does cover the ordinary commercial activities of religious organizations. If a religious organization runs a hospital, school, or residential care institution, it will be covered by the FLSA. Enterprise coverage, however, is not applicable to employees who are engaged exclusively in the operation of a religious organization because their activities are not performed for a business purpose.

DOL's Field Operations Handbook (Handbook) states that there is no provision in the FLSA that prohibits an employer-employee relationship between a religious, charitable, or nonprofit organization and people who perform work for the organization. For example, a church or religious institution may operate an establishment to print books and employ a regular staff who do this work as a means of livelihood. In such cases, an employer-employee relationship would exist under the FLSA.

The Handbook also states that "persons such as nuns, monks, priests, lay brothers, ministers, deacons, and other members of religious orders who serve pursuant to their religious obligations in the schools, hospitals, and other institutions operated by their church or religious order shall not be considered to be ‘employees.’" However, the Handbook also states that the fact that such a person is a member of a religious order does not automatically preclude an employer-employee relationship. This rule is rather ambiguous, and an employer should consider consulting an attorney to determine whether an employer-employee relationship exists in this situation.

State and local government employers, defined as public agencies by the FLSA, are covered by the Act. "Public agencies" are the federal government, the government of a state or political subdivision of a state, any state or federal agency, or any interstate governmental agency. The public agency definition does not extend to private companies that are engaged in work activities normally performed by public employees.

Certain employees of a public agency who, solely at their own option, occasionally or sporadically work on a part-time basis for the same public agency in a capacity other than the one in which they are primarily employed may be exempt from the overtime requirements of the FLSA.

Police. Public law enforcement personnel are covered by the FLSA. Law enforcement personnel are employees who are empowered by state or local ordinance to enforce laws designed to maintain peace and order, protect life and property, and to prevent and detect crimes; who have the power to arrest; and who have undergone training in law enforcement.

Firefighters. Public firefighters are covered by the FLSA. Fire protection personnel employed by a fire department include firefighters, paramedics, emergency medical technicians, rescue workers, ambulance personnel, or hazardous materials workers who are:

The FLSA provides that employees engaged in fire protection or law enforcement may be paid overtime on a work period basis. A "work period" may be from 7 to 28 consecutive days. For example, fire protection personnel are due overtime under such a plan after 212 hours worked during a 28-day period, while law enforcement personnel must receive overtime after 171 hours worked during a 28-day period. For work periods of at least 7 but fewer than 28 days, overtime pay is required when the number of hours worked exceeds the number of hours that bears the same relationship to 212 (fire) or 171 (police) as the number of days in the work period compares to 28.

Exception. The FLSA provides an overtime exemption to law enforcement or fire protection employees of a public agency that employs fewer than five employees in law enforcement or fire protection activities.

Under the FLSA, an employer must pay minimum wage and overtime, but the Supreme Court has made it clear that the FLSA was not intended to stamp out volunteering. The FLSA recognizes the generosity and public benefits of volunteering and allows individuals to freely volunteer time to religious, charitable, civic, humanitarian, or similar nonprofit organizations as a public service. Volunteers will ordinarily not be considered employees for FLSA purposes if the individuals volunteer for organizations without contemplation or receipt of compensation. Additionally, the volunteer services must be given freely without coercion or undue pressure.

Due to the possibility of coercion to perform unpaid services, paid employees may not volunteer to perform the same type of services for their employer that they are normally employed to perform. Time spent in work for public or charitable purposes at the employer’s request, under the employer's direction or control, or while the employee is required to be on premises is working time. However, time spent voluntarily in such activities outside of the employee’s normal working hours is not hours worked, as long as the volunteer activities are not the same or similar to the activities the employee is employed to perform. Therefore, the employer must compensate employees for the hours spent volunteering during their normal working hours or when the volunteer work performed is similar to their regular duties. As for those employees who perform duties that are not similar to their regular duties and that are voluntarily performed after their normal working hours, those volunteer activities are not considered hours worked for the purpose of the FLSA.

Public employees who volunteer. Employees of public agencies may wish to volunteer for the same organization for which they work. That is allowed but only in very limited situations. To preserve employees’ volunteer status, the line between volunteer work and paid work should be clearly defined. When an employee of a public agency wishes to perform volunteer work for their employer, the rules are strict. Unlike private employers, public and not-for-profit employers can allow their employees to volunteer their services to the employer as long as they are doing it for “civic, charitable, or humanitarian reasons.”

Volunteer work performed by public employees must also meet the same additional requirements as employees of private companies for determining volunteer work status.

To volunteer legally for their own employers, employees of public agencies must perform a service that is distinctly different from their ordinary work activities. The challenge is to determine whether the work the employee wishes to do may be treated as noncompensable and, if so, to determine when the employee is wearing an “employee hat” versus a “volunteer hat.”

Here are some examples of volunteer work that is and is not allowed: A paid city police officer cannot perform police or related duties for the city on a volunteer basis; however, the police officer may volunteer as a part-time referee in a basketball league sponsored by the city; an employee of the city Parks Department may also serve as a volunteer city firefighter; an office employee of a city hospital may volunteer to spend time with a disabled or elderly person in the same institution during off-duty hours.

Public employees who wish to volunteer services identical to those they normally provide in exchange for salary may offer their services only to a different public agency than their employer. For example, a receptionist at a county tax office could offer telephone answering services at a fund-raising event run by a state agency, but a nurse at a state hospital might not be able to volunteer their nursing services at a state-run neighborhood health clinic because both the hospital and clinic could be considered parts of the same public agency.

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 and overtime, each workweek stands alone, regardless of whether employees are paid on a weekly, biweekly, monthly, or semimonthly basis. Two or more workweeks cannot be averaged.

An employer must generally pay an exempt employee the full salary for any workweek in which the employee performs any work without regard to the number of days or hours worked. An exempt employee's salary may be reduced when the employee is absent from work for 1 day or more for personal reasons, when an employee is absent 1 day or more because of sickness or disability if the deduction is made under a bona fide sick pay or disability pay plan, for absence due to an unpaid disciplinary suspension for violation of workplace conduct rules, for any time interval in which an employee is on leave under the federal Family and Medical Leave Act (FMLA), and for absence due to an unpaid disciplinary suspension for violation of a major safety rule. Please see the national Salaried Employee section.

“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.

The current federal minimum wage 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. Please see the state Minimum Wage section.

An employer may pay four groups of employees below the minimum wage: people with mental or physical disabilities, full-time students, certain employees under the age of 20, and certain employees who receive tips.

Covered employers must post notices outlining the federal minimum wage requirements. The notices must be posted conspicuously and in enough places so employees can see them as they enter and exit the workplace. Posters are available from the U.S. DOL, WHD, and may be downloaded from its website at http://www.dol.gov.

Opportunity wage. New hires under the age of 20 may be paid an “opportunity wage” of $4.25 per hour during the first 90 calendar days of employment. Employers may not displace any current employee in order to hire a worker at the opportunity wage.

Students. Full-time students may be employed at 85 percent of the minimum rate by retail stores and some service establishments upon obtaining a certificate from the federal wage and hour administrator.

Federal law defines tipped employees as employees in occupations where they customarily and regularly receive more than $30 per month in tips (29 USC § 203).

Credit card fees. Under the FLSA, when tips are charged on customers’ credit cards and the employer can show that it pays the credit card company a percentage on such sales as a fee for payment using a credit card, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA.

Limitations on credit card fees. Federal law prohibits employers from reducing the amount of tips paid to the employee by any amount greater than the transactional fee charged by the credit card company, regardless of whether or not it takes a tip credit. Additionally, this transactional fee may not reduce the employee’s wage below the required minimum wage, including the amount of any tip credit claimed. Under federal law, the amount due the employee must be paid no later than the regular pay day and may not be held while the employer is awaiting reimbursement from the credit card company.

Service charges. A compulsory charge for service, for example, 15 percent of the bill, is not considered a tip under the FLSA. Sums distributed to employees from service charges are not tips, but may be used to satisfy the employer’s minimum wage and overtime pay obligations under the FLSA. Further, these sums are part of the employee’s total compensation and must be included in the regular rate of pay for computing overtime. If an employee receives tips in addition to the compulsory service charge, those tips may be considered in determining whether the employee is a tipped employee and in the application of the tip credit.

The federal minimum tipped wage is $2.13 and employers are permitted to take a tip credit up to $5.12 per hour.

The actual tips per hour must equal at least the tip credit amount. Actual tips plus cash wages must equal at least the federal minimum wage, currently $7.25 per hour (29 USC § 203; 29 CFR § 531.59).

Employer requirements. Employers taking a tip credit must be able to show in each workweek that tipped employees receive at least the full federal minimum wage when direct (or cash) wages and the tip credit are combined. If an employee’s tips combined with the employer’s direct (or cash) wages do not equal the minimum hourly wage of $7.25 per hour in each workweek, the employer must make up the difference.

Notice requirements. Employers must provide the following information in either oral or written notice to tipped employees before taking a tip credit under the FLSA:

Generally. The FLSA allows employers to require employees to share or “pool” tips with other eligible employees. The FLSA does not impose a limit on the percentage or amount of the contribution of each employee in valid mandatory tip pools. The federal rules governing tip pools depend on whether or not the employer pays a direct (or cash) wage equal to the full minimum wage of tipped employers.

Traditional tip pooling. An employer that takes a tip credit can require tipped employes to contribute tips only to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel (who serve customers), bussers, and service bartenders. An employer that implements a traditional tip pool must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for tips each tipped employee ultimately receives, and may not retain any of the employees’ tips for any other purpose. An employer may not receive tips from such a tip pool and may not allow managers and supervisors to receive tips from the pool.

Other tip pooling. When an employer pays its employees a cash wage of at least the federal minimum wage, currently $7.25 per hour, the employer may impose a mandatory tip pooling arrangement that includes employees who are not employed in an occupation in which employees customarily and regularly receive tips. This is sometimes known as a “nontraditional” or “other” tip pool. For example, an employer that implements a nontraditional tip pool may require tipped employees, such as servers, to share tips with non-tipped employees, such as dishwashers and cooks, but only if all workers receive a direct cash wage of at least the federal minimum wage. In addition, an employer may not receive tips from such a tip pool and may not allow managers and supervisors to receive tips from the pool.

Distributing tips from tip pools. When an employer collects tips to administer a tip pool, the employer must fully distribute any collected tips at the regular payday for the workweek, or, for pay periods of more than one workweek, at the regular payday for the period in which the particular workweek ends. To the extent an employer cannot determine the amount of tips received or how tips should be distributed before processing payroll, those tips must be distributed to employees as soon as practicable after the regular payday.

Recordkeeping. An employer that does not take a tip credit, but still operates a mandatory tip pool, must keep records of each employee who receives tips, and the weekly or monthly amount of tips received by each employee.

The FLSA requires that overtime must be paid at a rate of 11/2 times a covered (nonexempt) employee's regular rate of pay for each hour worked in excess of 40 hours in a workweek (or the maximum allowable in a given type of employment). The FLSA does not require that overtime be paid for hours worked in excess of 8 hours per day or on weekends or holidays. (Some states require overtime to be computed on a daily hour basis.) Please see the state Overtime section.

Only hours worked count in the overtime calculation. Therefore, holidays not worked, vacation days, sick days, etc., are not counted. The fact that an employee receives holiday pay, vacation pay, or sick pay is of no consequence for overtime purposes. The test is hours worked rather than hours paid.

Although overtime must be computed weekly, the FLSA does not require that it be paid on a weekly basis; it only requires that overtime be paid in the next regular pay period following the period in which the overtime is earned.

An employer may require an exempt employee to work more than 40 hours in a workweek without having to pay a premium for overtime hours.

The FLSA does not apply to any employee whose services during the workweek are performed in a workplace within a foreign country (9 USC Sec. 213(f)). Therefore, the FLSA would not apply to a U.S. citizen (or non-U.S. citizen) working in China for an American company.

Covered employers must post notices outlining the federal minimum wage and overtime regulations. The notices must be posted conspicuously and in enough places so that employees can see them as they enter and exit the workplace. Posters are available from the DOL WHD.

DOL’s WHD is responsible for administering and enforcing a number of federal laws that set basic labor standards. The WHD conducts investigations for a number of reasons, all having to do with enforcement of the laws and ensuring an employer’s compliance. An investigator from the WHD may conduct an investigation to determine whether the laws it enforces apply to an employer. If the employer is subject to these laws, the investigator will verify that workers are paid and employed properly according to the laws administered and that youths under the age of 18 are employed as provided by the child labor provisions. The WHD does not require an investigator to previously announce the scheduling of an investigation, although in many instances, the investigator will advise an employer before opening the investigation. The investigator has sufficient latitude to initiate unannounced investigations in many cases in order to directly observe normal business operations and quickly develop factual information. An investigator may also visit an employer to provide information about the application of, and compliance with, the labor laws administered by the WHD.

The WHD does not typically disclose the reason for an investigation. Many are initiated by complaints. All complaints are confidential, so the name of the worker, the nature of the complaint, and whether a complaint exists may not be disclosed. In addition to complaints, the WHD selects certain types of businesses or industries for investigation. The WHD often targets low-wage industries because of high rates of violations or egregious violations, the employment of vulnerable workers, or rapid changes, such as growth or decline, in an industry. Occasionally, a number of businesses in a specific geographic area are examined. The objective of targeted investigations is to improve compliance with the laws in those businesses, industries, or localities. Regardless of the particular reason that prompted the investigation, all investigations are conducted in accordance with established policies and procedures.

The WHD has stated that it will focus on fissured industries. These are industries where employers often employ people through various relationships, including employment agencies, contractors and subcontractors, and franchises.

During an investigation, DOL representatives visit a business and gather data on wages, hours, and other employment conditions or practices in order to determine compliance with the law. The WHD does not require an investigator to previously announce the scheduling of an investigation, although investigators will often advise an employer before opening the investigation. The investigator has sufficient latitude to initiate unannounced investigations in many cases in order to directly observe normal business operations and develop factual information quickly. If violations are found, the employer may owe back pay, face penalties, and be advised by the DOL to make changes in employment practices in order to avoid future violations.

Section 11(a) of the FLSA authorizes representatives of the DOL to investigate and gather data concerning wages, hours, and other employment practices; enter and inspect an employer’s premises and records; and question employees to determine whether any person has violated any provision of the FLSA. The WHD investigator will identify themselves and present official credentials. The investigator will explain the investigation process and the types of records required during the review. An investigation consists of the following steps:

The DOL looks for complete, accurate, and unambiguous pay records for every employee for each pay period from the past 3 years. As a result, it is imperative that employers strive to keep accurate, well-organized wage and hour records that can be produced quickly.

In general, employers in the following categories must comply with the wage and hour requirements of the FLSA:

Employees in firms not covered by the FLSA might still be protected under the Act if their individual work involves interstate commerce or the production of goods for interstate commerce.

Tip: If an employer believes that it may have wage and hour issues, it should contact an attorney experienced in wage and hour investigations as soon as possible. An experienced attorney can provide details about the employer's rights and responsibilities from the outset.

The FLSA prohibits employers from discharging or discriminating against any employee who files a wage and hour complaint or who provides information during a DOL investigation. As a result, employers should be cautious not to discourage employee cooperation with wage and hour investigations or to respond negatively to any employee who files a wage and hour complaint.

In order to prepare for a wage and hour investigation, consider taking the following steps:

Cooperation is key. Employers should demonstrate their willingness to cooperate with DOL investigators and to adjust their procedures and policies as necessary to avoid violations in the future.

The following are some strategies to prevent a wage and hour investigation:

Avoid unfair compensation practices. Make sure employees are compensated in a consistent manner. If an employer's pay practices are consistent, complaints are less likely to arise, and the employer will be in a better situation if the DOL does launch an investigation.

Understand the regulations. It is important that employers take the time and make a concerted effort to understand and familiarize themselves with the FLSA. It is the law, and if employers fail to follow the law, they may face litigation or a DOL audit.

Training. Train managers so they are fluent in the language of the FLSA.

Analyze state versus federal law. Determine whether the state’s wage and hour laws conflict with federal law, and then follow the law that is most beneficial to the employee.

Pay past overtime due. If it is determined that an employee is wrongly classified as exempt, the employer should determine how many overtime hours the employee has worked in the past 2 years, and then pay the employee the overtime due. The employer should also have the employee sign a release to free the employer from further liability. Paying past overtime due to employees now will be far less expensive than paying them in a DOL settlement.

Respond to internal complaints expeditiously. If an employee files a wage and hour complaint internally, the employer should take it seriously. Since many investigations are prompted by an employee's complaint, employers might be able to prevent an investigation by addressing an employee's initial internal complaint.

Seek compliance assistance from the DOL. Various compliance tools and information are available on DOL's website at http://www.dol.gov.

Conduct a self-audit. Employers can hire attorneys to audit their companies—or they can do it themselves before the DOL initiates an investigation. Conducting a self-audit helps ensure compliance with federal and state laws. As part of an audit, employers should:

There are a variety of fines and penalties an employer may face for violating the law:

Some of these penalties are found in other laws administered by the WHD, such as the Migrant and Seasonal Agricultural Worker Protection Act, which also provides for the assessment of civil money penalties, criminal sanctions, fines, and imprisonment.

In the case of the government contracts, the statutes provide that contract funds may be withheld for violations under the Walsh-Healey Public Contracts Act, McNamara-O’Hara Service Contract Act, Davis-Bacon and Related Acts, and Contract Work Hours and Safety Standards Act. Administrative hearings or court action may be initiated to recover back pay under these laws. In addition, liquidated damages may be assessed for certain violations. Violators of these laws may also lose their federal contracts and be declared ineligible for future contracts for a specified period.

The amount of the penalty generally depends on the size of the business and the seriousness of the violation. In some cases, however, the DOL may also consider:

Disagreeing with a penalty. If an employer disagrees with the amount of a penalty, the employer must take exception to it within 15 days after receipt of the notice of determination and request a hearing. Otherwise, the administrative determination is considered final.

Collection of penalties. Once a final determination is made, the penalty is immediately due and payable via a check or money order made payable to DOL's WHD. The penalty must be delivered or mailed to the regional office for the area in which the violations occurred.

An employee may sue an employer, in federal or state court, for violating the minimum wage or overtime provisions of the FLSA or for retaliating against an employee for exercising rights under the FLSA. And remember, individual owners, managers, and directors may be sued individually under the FLSA. However, an employee may not personally bring a suit for recordkeeping violations.

Time limits. Suits to enforce nonwillful violations of the FLSA must be brought within 2 years after the accrual of the cause of action. Typically this means that an employer’s period of exposure is measured by counting backward 2 years from the date the lawsuit is filed. The limitations period for willful violations is 3 years.

Damages. The damages available to employees in FLSA actions are potentially huge. The available civil remedies include all unpaid compensation for time worked but not paid, or time paid at an incorrect rate, mandatory liquidated damages (equal to the amount of the unpaid compensation), equitable relief (such as reinstatement), and attorneys’ fees. Employers that have not kept accurate time records (such as in cases of employees misclassified as exempt) face even greater exposure. In such cases, an employee can basically testify to any number of hours worked per week, and the burden is on the employer to prove that a different (lesser) number of hours was actually worked by the employee.

Employees suing under the FLSA cannot recover compensatory or consequential damages (such as for emotional distress, loss of enjoyment of life, or lost opportunities). Nor are punitive damages generally available. However, some courts have held that punitive damages are available for violations of FLSA’s antiretaliation provisions. This is because although the FLSA limits damage claims for minimum wage and overtime reimbursement claims to unpaid compensation and an additional equal amount as liquidated damages, the damage provision for retaliation claims is open-ended and allows “such legal or equitable relief as may be appropriate to effectuate the purposes of [the Act]....” Given the open-ended nature of this provision, plaintiffs have attempted to seek punitive damages by filing retaliation claims, and the courts have been quite receptive. However, other courts have rejected such attempts.

Employers should also be aware that, unlike in other forms of employment litigation, calculation of damages is almost totally objective and based on a set formula. There are generally no mitigating factors or offsets available against back wages owed an employee.

Arbitration of FLSA claims. Employees covered by a collective bargaining agreement are entitled to bring FLSA lawsuits in federal court without exhausting the grievance procedure.

Releases. Employers attempting to negotiate settlement of a potential FLSA claim with an employee before litigation or during the course of litigation must exercise extreme caution, since releases of FLSA claims for back wages have generally been held to be unenforceable.

Defenses. There are several affirmative defenses available to employers. (An “affirmative” defense is one that the employer has the burden of proving.) Statutory defenses include statute of limitations defense and two good-faith defenses.

An employer should assert the statute of limitations defense when it appears that the employee bringing the suit was employed for a longer period of time than covered by the applicable 2- or 3-year period.

Good-faith defenses. An employer will be completely relieved of liability “if he pleads and proves that the act or omission complained of was in good faith in conformity with and in reliance on any written administrative regulation, order, ruling, approval, or interpretation” issued by the administrator of the Wage and Hour Division of the DOL. In other words, an employer is protected from liability if it, in good faith, relies on the agency’s interpretation that is subsequently held to be wrong.

An employer may avoid otherwise mandatory liquidated damages if it demonstrates that its compensation practices were undertaken in good faith. At the most, an employer’s showing of good faith with reasonable grounds for believing that it was not in violation of the act will allow a judge to exercise discretion to deny or reduce liquidated damages. This does not affect attorneys’ fees and costs. To prevail under this defense, an employer must show that:

In a collective action under the FLSA, a named plaintiff sues on behalf of himself and “other employees similarly situated.” No employee may be a party plaintiff to such an action “unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought.” This is very different from a class action under Fed. R. Civ. P. 23(b)(3) in which the consent of class members is not required where class members instead have a right to be notified of the class action and to opt out of it and seek their own remedies. Under the FLSA, on the other hand, if an individual has not given written consent to join the suit, or if the individual has given consent but has not filed the consent with the court, that individual cannot be a party. Conversely, a similarly situated plaintiff who decides not to join a pending collective action is not bound by the outcome of that case—they retain their own claim and can sue the employer later, individually, or even bring a separate collective action against the employer, rounding up similarly situated employees who failed to join up previously.

Process. The fact that a collective action has been filed does not toll the limitation periods for potential plaintiffs. Rather, the statute of limitations for each opt-in plaintiff’s FLSA claim continues to run until an individual files a signed statement with the court. District courts have discretionary power to authorize the sending of notice to potential class members in a collective action brought pursuant to FLSA Sec. 216(b). In determining if the named plaintiff is similarly situated to the presumed members of a collective action, the majority of courts use a two-step approach. Under this approach, two levels of review are utilized, depending on the procedural stage of the case.

The first tier, which typically occurs very early in the litigation before any discovery has taken place, is known as the notice-stage determination and typically results in conditional certification of a representative class. At the notice stage, courts typically require nothing more than substantial allegations that the presumed class members were together the victims of a single decision, policy, or plan infected by discrimination. To establish that employees are similarly situated, a plaintiff must show that they are similarly situated with respect to their job requirements and with regard to their pay provisions. The positions need not be identical, but similar.

The second tier involves a more strict level of scrutiny and typically follows a defendant's motion for decertification of the collective action at or near the close of discovery. In this phase of the inquiry, the court reviews several factors, including:

The U.S. Supreme Court has ruled that an employer's offer to settle an employee's unpaid wage claim effectively cut off her lawsuit even though she never accepted the offer (Genesis Healthcare Corp. v. Symczyk, S. CT. No. 11–1059 (2013)). A registered nurse in Pennsylvania filed a collective action against her former employer, Genesis Healthcare, claiming it violated the FLSA by automatically deducting half an hour of pay from her daily wages for meal breaks. Rather than litigating the issue of how many times the plaintiff worked through her meal breaks, Genesis made an "offer of judgment," which is a type of settlement offer to a plaintiff. She never responded to the offer. The Supreme Court stated that Genesis' offer of judgment rendered the plaintiff's individual claims moot and that the collective action couldn't continue. The Court explained that once her entire claim was satisfied, the plaintiff couldn't adequately represent the interests of the unidentified coworkers who would have been members of her collective action. Employers facing collective actions under the FLSA can consider using offers of judgment as a tool for expeditiously resolving such lawsuits. If you offer an amount that fully satisfies the lead plaintiff's claim and no other employees have opted into the collective action, the lawsuit will likely be dismissed under the Supreme Court's ruling.

To obtain additional information from the WHD, including how to contact a regional or district office of the WHD, contact: