An HR Glossary for HR Terms
Glossary of Human Resources Management and Employee Benefit Terms
Fair Labor Standards Act (FLSA)
What is FLSA?
FLSA is the Fair Labor Standards Act, a United States federal law created to protect workers from unfair pay practices or work standards. The law has been altered many times since its creation in 1938. The original purpose was to protect workers from abuses during the Industrial Revolution and Great Depression, but the law still works to restrict child labor, ensure employees are paid a living wage, and ensure employees are paid for overtime work.
What is FLSA Exempt?
Every employee is either “exempt” or “non-exempt” under FLSA regulations. Exempt employees are not entitled to overtime pay, though their employer may choose to offer it as a benefit. This means an employer may require them to work more than 40 hours per week and they are not required to pay overtime.
To qualify as an exempt employee, the worker must:
- Be paid at least $23,660 per year, or $455 per week
- Be paid on a salary basis, meaning their pay does not increase or decrease depending on work output or amount of hours worked
- Perform exempt job duties, as outlined in the FLSA Regulations
However, the Department of Labor (DOL) proposed a rule change in March, 2019 which could substantially raise the amount employees must be paid before they can be eligible for exemption (though not as high as a widely quoted 2016 rule change which was blocked from taking effect).
What is FLSA Non-Exempt?
Non-salary employees may be considered FLSA non-exempt if they meet certain requirements. Non-exempt employees are entitled to overtime pay, which is time and a half pay for every hour worked over 40 hours per week. Employees who are paid less than $455 per week or $23,660 annually are considered non-exempt under FLSA.
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What Employment Practices are Regulated By the FLSA?
The FLSA regulates a variety of employee practices, mainly in regards to employee wages, health, and safety. Here are the categories the FLSA covers:
The FLSA requires employers to pay non-exempt employees overtime pay of 1.5 times their regular rate of pay. Exempt employees, such as salaried employees who are paid more than $23,660 annually and perform exempt job duties, are not entitled to overtime pay.
The federal minimum wage is dictated by FLSA. States may also have minimum wage laws. If a state has a minimum wage higher than the federal minimum wage, the employee is entitled to the state minimum wage.
FLSA protects children from labor that may be a detriment to their health or safety. These laws are meant to keep educational opportunities open to school-age children.
Employers must display FLSA requirements with the official FLSA poster. They also must keep track of employee time and pay records.
What is the FLSA Overtime Rule?
The FLSA overtime rule states that non-exempt employees are entitled to overtime pay of 1.5 times their regular pay when they work more than 40 hours in a work period. Employees who are paid a consistent salary of $455 per week, or $23,660 annually and perform exempt job duties are exempt from overtime pay, but their employer may still grant it to them if they so choose.
Who Are Exempt Employees Under FLSA?
Under FLSA, exempt employees are those not entitled to overtime pay. These employees must meet three requirements, including:
- Payment on a salary basis (Pay does not change depending on output or amount of hours worked)
- Wages of at least $455 per week, or $23,660 annually.
- Perform exempt job duties, as outlined in the FLSA Regulations.
Does FLSA Apply to Nonprofits?
FLSA applies to any business with sales or revenue of at least $500,000 annually. This requirement does not apply to charitable activities like collecting donations, but it does apply to revenue a nonprofit might bring in. For example, if a nonprofit group sells a t-shirt or operates a gift shop, the revenue collected would be considered for the FLSA requirement. FLSA may apply to nonprofits like hospitals, schools, preschools, and government agencies.
Are Churches Exempt from the FLSA?
Generally, churches and religious workers are exempt from the FLSA. However, there are some occasional exceptions, such as when a church or religious group operates a school or nursing home.
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