What Is the Fair Labor Standards Act?
The Fair Labor Standards Act (FLSA), enacted in 1938 and administered by the U.S. Department of Labor's Wage and Hour Division, is the cornerstone federal law governing minimum wage, overtime pay, recordkeeping, and child labor standards. Understanding its overtime provisions is essential for both workers protecting their rights and employers maintaining compliance.
The Basic Overtime Rule
Under the FLSA, non-exempt employees must receive overtime pay of at least 1.5 times their regular rate of pay for all hours worked beyond 40 in a single workweek. This is commonly referred to as "time and a half."
Key details to understand:
- Overtime is calculated on a workweek basis — a fixed, recurring period of 168 hours (seven consecutive 24-hour periods).
- Employers cannot average hours across two workweeks to avoid overtime obligations.
- The overtime obligation is based on hours worked, not hours scheduled.
Exempt vs. Non-Exempt Employees
Not all employees are entitled to overtime. The FLSA distinguishes between exempt and non-exempt workers. Exempt employees are not entitled to overtime pay. To qualify as exempt under the most common exemptions, an employee must generally meet all three of the following tests:
- Salary basis test: The employee is paid a fixed salary that does not vary based on hours worked.
- Salary level test: The salary meets the minimum threshold set by the USDL (subject to regulatory updates — check the current threshold with the Wage and Hour Division).
- Duties test: The employee's primary job duties fall into an exempt category.
The Main Exemption Categories
| Exemption | Primary Duties |
|---|---|
| Executive | Manages the enterprise or a department; directs the work of two or more full-time employees; has authority over hiring and firing |
| Administrative | Performs office or non-manual work related to management or business operations; exercises discretion and independent judgment |
| Professional | Works requiring advanced knowledge in a field of science or learning customarily acquired through prolonged education |
| Computer Employee | Systems analysts, programmers, software engineers, and similar IT workers meeting specific duties criteria |
| Outside Sales | Primarily makes sales or obtains orders away from the employer's place of business |
| Highly Compensated | Total annual compensation above the HCE threshold and performs at least one exempt duty |
Common Employer Mistakes and Misclassification
Misclassification — incorrectly labeling a non-exempt employee as exempt — is one of the most common FLSA violations. Employers sometimes assume that:
- Paying someone a salary automatically makes them exempt (it does not).
- Giving an employee a managerial title exempts them from overtime (the duties test, not the title, controls).
- Independent contractors are exempt (misclassifying employees as contractors is a separate and serious violation).
How to File an Overtime Complaint
If you believe your employer has violated your overtime rights, you have options:
- File a complaint with the USDL Wage and Hour Division online, by phone, or in person at a local WHD office. Complaints can be filed confidentially.
- Consult a private employment attorney. The FLSA allows workers to sue for back wages, an equal amount in liquidated damages, and attorney's fees.
- Contact your state labor agency, as many states have overtime rules that are more protective than the federal standard.
There is generally a two-year statute of limitations for FLSA claims, extended to three years for willful violations.