Significance

• The U.S. Department of Labor's Wage and Hour Division administers the Fair Labor Standards Act (FLSA). The Act was implemented to establish guidelines for child labor, minimum wage, overtime and record-keeping. To receive coverage under the FLSA, the employee must work for an organization that generates at least $500,000 in yearly revenue, a government agency, a hospital or school, or a business that does interstate commerce.
  
  

Non-exempt Employees

• To be classified as "non-exempt," the employee must be eligible for overtime pay and not be in a management role. The FLSA requires that employers pay FLSA-covered non-exempt workers no less than the federal minimum wage of $7.25 per hour, effective July 24, 2009. But under the Youth Minimum Wage Act, employers can pay workers under 20 a reduced wage of $4.25 per hour for the first 90 days. Furthermore, FLSA-covered non-exempt workers qualify for overtime pay at 1-1/2 times their regular pay rate for hours worked above 40 in a week.
  
  

Exempt Employees

• An exempt employee is not covered under overtime protection laws. Exempt employees include those in an executive, administrative or professional role as well as outside salespersons and some computer employees. The employee must satisfy the testing criteria the DOL administers to be categorized as exempt. For example, the criteria for an executive to be classified as exempt include being compensated a salary of no less than $455 per week and having the authority to hire and terminate other workers. If the employee is paid on a salary basis but does not meet the exempt testing criteria, he qualifies for overtime pay.
  
  

Salary Provisions

• According to the DOL, salary compensation is a fixed wage per pay period. The salaried worker must receive his full salary each payday, despite the number of hours or days he works. But, in some cases, he is not entitled to pay. This includes weeks in which he performs no work; disciplinary cases, such as suspension; overuse of benefit days, such as vacation and personal time provided under the company plan; and if he is absent for reasons other than disability or sickness. In the latter instance, the employer cannot deduct the employee for a half-day taken, only for full days.
  
  

Child Labor

• The FLSA provides provisions for working minors under age 16. While children under the age of 18 are not subject to job or hours restrictions, those age 16 and 17 cannot perform jobs deemed hazardous (such as mining and excavation) by the U.S. Department of Labor. Employees between the ages of 14 and 15 are allowed to perform non-manufacturing and non-mining jobs as well as those not regarded as hazardous. Minors that are 14 and 15 years of age also have work hour restrictions, such as working no more than three hours on a school day and 18 hours in a school week.
  
  

Considerations

• Employees can contact their regional Department of Labor agency if the employer violates federal labor and employment laws. Furthermore, if the state minimum wage differs from the federal minimum wage, the employer must pay workers the greater of the two amounts.