FLSA 101 The Fair Labor Standards Act (e-book)

Ross Brand

FLSA 101: The Fair Labor Standards Act

Twitter: @iRossBrand

TABLE OF CONTENTS
Introduction………………………………………………………………………

2

History…………………………………………………………………………....

2

Department of Labor…………………………………………………………...

3

Covered Businesses……………………………………………………..…….

3

Child Labor Provisions…………………………………………………………

4

Employee vs. Independent Contractor……………………………………….

5

Exempt vs. Non-exempt…………………………………………………..…...

7

Overtime…………………………………………………………………………

11

Equal Pay Act……………………………………………………………………

12

Health Care Reform and FLSA………………………………………….…….

13

Rest Breaks………………………………………………………………...……

14

Employee Records……………………………………………………….……..

14

Conclusion…………………………………………………………………........

16

End Notes………………………………………………………………….…….

17

Bibliography………………………………………………………………..……

19

About the Author………………………………………………………….........

21

Acknowledgements…................................................................................

21

Disclaimer……………………………………………………………………….

21

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Introduction
The Fair Labor Standards Act (FLSA) is the seminal piece of federal legislation
addressing minimum wage, overtime pay, child labor law and record keeping related to
the previous subjects. Also known as the Wage and Hour Law, the FLSA is a
complicated and sometimes vague set of regulations that can cost an organization
greatly for failure to comply. The Equal Pay Act is an important amendment requiring
equal wages for men and women doing equal work. Further revisions in minimum
wage, overtime rules and variations in enforcement by different administrations, as well
as judgments by courts, have all added to the
demands on employers to stay up-to-date on
Whenever a disparity
FLSA issues and consult with attorneys when
exists between
they have questions. FLSA standards most
recently underwent a significant revision in
federal and state law,
2004.

the employer is
obligated to abide by
the terms most
favorable to the
employee.

In addition, many states have laws on
minimum wage, overtime pay and child labor
that differ from the FLSA. Whenever a
disparity exists between federal and state law,
the employer is obligated to provide the
amount of pay or abide by the terms most
favorable to the employee. Employers must
also factor into their scheduling and
compensation determinations both municipal laws and the terms of any collective
bargaining agreements, employee contracts or employment policies contained in their
employee handbook.

History
The FLSA was passed in 1938 to address severe abuses of employees who
were often forced to work long hours for low pay in hazardous conditions. Children from
poor families spent their youth working rather than in school, and frequently suffered
injuries toiling at round-the-clock shifts in sweat shop environments.
Because the courts had typically ruled that restrictions on employee hours and
minimum pay laws were unconstitutional, the United States Congress sought to enact a
major piece of legislation to address the aforementioned issues. Further impetus for
passing the FLSA was due to the large number of unemployed and impoverished
Americans during the Great Depression. President Franklin D. Roosevelt and Congress
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believed that by limiting the hours of younger workers and requiring overtime pay for
hours worked by adult employees in excess of 40 in a week, the quality of life would not
only improve for America’s most vulnerable employees, but more jobs would open up
for the unemployed as owners would choose to hire new employees for evening and
overnight shifts rather than pay time and a half to their current employees. Setting a
minimum wage was also intended to “maintain the purchasing power of the public to lift
the country out of the economic depths of the Great Depression.”i

Department of Labor
As a federal statute, the Fair Labor Standards Act is administered and regulated
by the Department of Labor (DOL). Complaints regarding minimum wage and overtime
violations are investigated by the DOL’s Wage and Hour Division. Employees also have
the option of pursuing legal action in court, regardless of whether they first lodge a
complaint with the Wage and Hour Division. ii
In 2004, the DOL published new regulations updating and clarifying the
definitions of white-collar employees, including exemptions for outside sales and
computer employees, “whose duties, minimum salaries and basis of compensation
exclude them from the FLSA’s overtime pay requirements.” iii The five white-collar
exemptions will be discussed in more depth in the pages that follow. The salary level
test for exempt employees, which has been a part of the FLSA exemption criteria since
1938, had remained at $8,060 annually (or $155 per week) since 1975. iv The 2004
regulations raised the minimum annual salary for exempt employees to $23,600 (or
$455 per week). At the time, the DOL estimated that 6.7 million additional U.S. workers
would enjoy overtime protections based on the new minimum salary, including 5.4
million who were already non-exempt, but were gaining the guarantee of overtime pay
resulting from the new rules.v In 2009, the minimum wage was raised to its current level
of $7.25 per hour. The minimum wage can only be altered by Congressional legislation.
The DOL requires employers to display an official poster outlining the provisions of the
FLSA, which is available for free download at the DOL website or can be obtained at no
cost by phone or in person at the local offices of the Wage and Hour Division.vi

Covered Businesses
The employees of most private-sector businesses are covered under the FLSA.
Private-sector employers engaged in interstate commerce and retail service firms with
two or more employees and more than $500,000 in annual business fall under the
provisions of the FLSA, as do state and local hospitals and educational institutions.
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FLSA also covers individual employees engaged in interstate commerce, regardless of
whether their employer’s volume of business reaches the $500,000 level. vii The
interstate commerce clause is so broadly defined as to cover employees who make
phone calls or send emails to a person in another state. viii
Even if employers or employees are not covered under the FLSA, it is very likely
that they will fall under the jurisdiction of state laws similar to the FLSA. In 1974, state
and local government employees, most federal government employees (excluding
members of the military) and private household domestic employees received coverage
under FLSA.ix An ensuing Congressional
amendment to the FLSA enabled state and
municipal employers to compensate overtime
Comp time is not a
x
work with “comp time” instead of overtime pay.
legal option for private
Comp time is not a legal option for private
sector businesses
sector businesses when it comes to
when it comes to
compensating their non-exempt employees for
overtime work.
compensating their

non-exempt
While most jobs are governed by the
employees for
FLSA, there are some exceptions. For
example, employees of movie theaters and
overtime work.
many agricultural workers are not covered by
the FLSA. Employees who work in jobs
governed by some other federal labor law, such
as railroad workers covered by the Railway Labor Act or truck drivers covered by the
Motor Carrier Act, are not governed by the FLSA. Very small family-owned and
operated business and family farms are also excluded from the FLSA.xi
Child Labor Provisions
A major success of the FLSA has been to reduce drastically the number of
minors working in exploitative conditions since it was enacted 74 years ago. The FLSA
set the age limit for employment in most cases to 14 years and older, with strict
limitations on the amount of hours children ages 14-15 can work, protecting the
educational opportunities for young Americans and prohibiting their employment in jobs
that posed a significant threat to their health and safety. xii The Wage and Hour Division
of the Department of Labor has approved proof-of-age certificates for minors, which are
available at the appropriate state agency. SHRM strongly recommends that any
organization interested in employing a minor obtain a proof-of-age certificate prior to
hiring the minor.xiii
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According to the FLSA regulations, children under 14 are prohibited from most
farm work. They may be employed by parents, except in hazardous industries,
manufacturing and mining. Certain other jobs,
such as actors and newspaper carriers, are
SHRM strongly
permitted for children younger than 14.xiv

recommends that any

The rules for 14 and 15 year olds
organization
restrict work hours during the school year to no
interested in
more than 3 hours a day and 18 hours a week.
During school vacations, 14 and 15 year olds
employing a minor
can work up to 8 hours a day and 40 hours a
obtain a proof-of-age
week. That work must be performed between
certificate.
7 A.M. and 7 P.M., except from June 1 through
Labor Day, when 14 and 15 year olds can
work until 9 P.M.xv Teens ages 16 and 17
have no special restrictions placed upon the
hours that they may work on a given day or week. However, all workers 17 and
younger are banned from hazardous occupations. xvi

Employee vs. Independent Contractor
The first determination that an employer must make in deciding how to
compensate a worker is to figure out whether that individual is legally an employee or
an independent contractor. As the Society of Human Resource Management succinctly
sums it up, “an employer has no ongoing obligations under the FLSA to self-employed
independent contractors.”xvii The Internal Revenue Service previously supplied a “20
factor” test to distinguish independent contractors from employees. xviii
Today the IRS organizes its criteria into three groups: behavioral control,
financial control and relationship of the parties. If the employer has a “right to direct and
control how the worker does his or her tasks,” that worker is almost certainly an
employee.xix Behavioral control can take place through employer instruction, including
the mandate that the worker follow organizational rules about how, when and where to
work. It can also include training the worker to perform services in a particular manner.
If the employer has a “right to control the business aspects of the worker’s job,”
that worker should be classified as an employee. xx An independent contractor is more
likely to have unreimbursed expenses, have a significant investment in his or her
business, is free to pursue other business opportunities simultaneously, is paid a flat
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rate rather than a regular wage amount and can make a profit or suffer a loss from his
or her efforts.xxi Regarding the relationship between the parties, an independent
contractor will typically have a written contract, finance his or her own benefits, have a
short-term relationship (usually a year or less) with the company (as opposed to the
expectation for an ongoing long-term relationship) and not perform services which cover
a key aspect of the organization’s business. xxii
It is critical that employers who wish to classify a worker as an independent
contractor stay within the boundaries set by the IRS in dealing with that worker.
Otherwise, that worker can be considered an
employee and the organization can be deemed
responsible for compensating that worker for
It is critical that
time spent on tasks related to the business.
employers who wish

to classify a worker as
For example, many businesses use
independent sales representatives to cover
an independent
territories outside their home region. Those
contractor stay within
representatives are typically given annual
the boundaries set by
contracts and are paid on a straight commission
the IRS.
basis. The company does not reimburse the
independent sales representative for expenses
related to travel, office supplies or cell phone
service incurred in pursuit of selling the
organization’s products. Nor does the organization pay for the representative’s benefits
or limit the ability of the representative to take on other business opportunities. Simply
put, the representative is an independent contractor who makes his or her own
investment in time and money toward selling the product, and thus either profits or loses
money from the relationship without reimbursement for expenses or regular wages from
the company for time worked.
However, the company must be careful not to direct how the representative
spends his or her time. For example, should the company demand sales call reports
from the representative or tell the representative that he or she must visit specific
customers at certain days and times, the company is in danger of treating that
representative as an employee by “directing and controlling how the worker does his or
her tasks.”xxiii Once a worker is legally considered an employee, the organization is
responsible for paying Social Security, unemployment and workers’ compensation
costs.

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Exempt vs. Non-Exempt
All individuals categorized as employees and governed by the FLSA will fall into
one of two categories: exempt or non-exempt for the purposes of minimum wage and
overtime pay. An employer does not have to pay an exempt employee the minimum
wage or overtime. To qualify as an exempt employee, the worker must be paid on a
salary basis at a minimum of $23,600 per year or $455 per week, without improper
deductions, and perform exempt job duties. It is important that employers focus on job
tasks, including how those tasks fit into the
employer’s overall operations, rather than
utilizing job titles in determining which
An exempt employee
employees are exempt. xxiv

must be paid on a
salary basis at a
minimum of $23,600
per year or $455 per
week, without
improper deductions,
and perform exempt
job duties.

The Society for Human Resource
Management recommends identifying an
employee’s “primary duty” in evaluating whether
or not their position should be classified as
exempt. “Although no particular percentage of
exempt duties is required under the FLSA, the
lower the percentage, the greater the legal risk if
challenged.”xxv All non-exempt employees must
be paid a minimum wage of $7.25 per hour (or
more if state or municipal law has a higher
minimum wage) and overtime for hours worked
over 40 in a workweek. Blue-collar workers and
first responders are always classified as non-exempt, regardless of their income or job
title, meaning that they must receive at least the minimum wage for all time worked and
overtime pay at a rate of time-and-a-half for any hours worked in excess of 40 in a
workweek.xxvi
An exempt employee holds a job that falls into one of the following categories:
executive, administrative, professional (learned or creative), highly-compensated,
computer employees and outside sales employees.xxvii Individuals performing jobs in
the aforementioned categories must also meet other criteria, some of which is quite
specific and others that are rather vague. Attorneys Amy DelPo and Lisa Guerin,
authors of The Manager’s Legal Handbook, warn employers that job duties are more
important for FLSA classification purposes than job titles. “When it comes to eligibility
for overtime and compliance with equal pay and other wage discrimination laws, job

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titles don’t matter. It’s what employees actually do on the job that determines your
company’s obligations.”xxviii
To qualify as an exempt executive, the employee must manage the business or
one of its subdivisions or recognized departments, regularly direct the work of two or
more full-time employees (two half-time employees count as a full-time employee) and
have the authority to hire and fire employees or provide input regarding employees’
change of status that carries significant weight. The law firm of Chamberlain, Kaufman
and Jones advises that “‘Mere supervision’ is not sufficient. In addition, the supervisory
employee must have ‘management’ as the ‘primary duty’ of the job.” xxix
A list of typical management duties contained in the FLSA regulations includes
interviewing, selecting and training employees; setting rates of pay and hours of work;
maintaining production or sales records (beyond the merely clerical); appraising
productivity; handling employee grievances or complaints, or disciplining employees;
determining work techniques; planning the work; apportioning the work among
employees; determining the types of equipment to be used in performing work or
materials needed; planning budgets for work; monitoring work for legal or regulatory
compliance; and providing for safety and security of the workplace. “Determining
whether an employee has management as the primary duty of the position requires
case-by-case evaluation,” according to Chamberlain, Kaufman and Jones. “A ‘rule of
thumb’ is to determine if the employee is ‘in charge’ of a department or subdivision of
the enterprise (such as a shift). One handy clue might be to ask who a telephone
inquiry would be directed to if the caller asked for ‘the boss.’ Typically only one
employee is ‘in charge’ at any particular time.”xxx
An administrative employee’s duties will be primarily office or non-manual in
nature “directly related to the management or general business operations of the
employer or the employer’s customers” and involve the “exercise of discretion” or
“independent judgment” on “matters of significance” as a primary component of the
position. Chamberlain, Kaufman and Jones call the administrative exemption “the most
elusive and imprecise of the definitions of exempt job duties.” xxxi It is intended for
“relatively high-level employees” whose main job is to “keep the business running.” The
lawyers at Chamberlain, Kaufman and Jones suggest, “Questions to ask might include
whether the employee has the authority to formulate or interpret company policies; how
major the employee’s assignments are in relation to the overall business operations of
the enterprise (buying paper clips versus buying a fleet of delivery vehicles, for
example); whether the employee has the authority to commit the employer in matters
which have significant financial impact; whether the employee has the authority to
deviate from company policy without prior approval.”xxxii
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Chamberlain, Kaufman and Jones advise distinguishing administrative
employees from “operational” or “production” employees. “Employees who make what
the business sells are not administrative employees.” xxxiii Chamberlain, Kaufman and
Jones list as administrative functions the following: “labor relations and personnel
(human resource employees), payroll and finance (including budgeting and benefits
management), record maintenance, accounting and tax, marketing and advertising (as
differentiated from direct sales), quality control, public relations (including shareholder or
investment relations, and government relations), legal and regulatory compliance, and
some computer-related jobs (such as network,
internet and database administration).”xxxiv

DelPo and Guerin
advise against
docking an exempt
employee’s pay.

A learned professional performs work
that requires advanced education, is intellectual
in nature and requires independent decisions or
judgment. Examples of learned professionals
include lawyers, accountants, doctors, dentists,
engineers, teachers, scientists, architects and
pharmacists, “if their jobs involve using their
own judgment and discretion,” according to
attorney Fred S. Steingold, author of The Employer’s Legal Handbook, who adds that
“the same is true for certain health care professionals, such as certified medical
technologists, registered nurses, dental hygienists and physician’s assistants.” xxxv
Steingold offers some rather blunt advice for employers: “For anyone else who seems
like a professional but doesn’t fall into one of these clear-cut cases, consult an
lawyer.”xxxvi
Another category of exempt employees is creative professional, a classification
that applies to actors, musicians, composers, essayists, novelists, cartoonists and some
journalists. Regarding journalists, Steingold wrote, “Journalists may qualify if their
primary work is creative—for example, contributing a unique interpretation or analysis to
the news—but not if they only collect, organize and record information that’s routine or
already public.”xxxvii The Society of Human Resource Management advises that for jobs
to be covered by the creative professional exemption, employees in those positions
must “have a primary duty of performing work that requires invention, imagination,
originality or talent in a recognized field of artistic or creative endeavor.” xxxviii
Employees who earn high salaries but cannot easily be classified as executive,
administrative or professional will still be exempt if they perform one or more of the
duties of an exempt executive, administrative or professional and have a total annual
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compensation of more than $110,000, including a salary or fee of at least $455 per
week.xxxix Also exempt are certain computer employees (but not those who make or
repair computers and related equipment) earning a salary of $455 per week or $27.63
per hour and outside sales representatives who regularly perform their jobs away from
the employer’s facilities. xl There is no minimum salary for which outside sales
employees must be paid to be classified as exempt. xli
Steingold notes that there are some other employees who are always exempt
from minimum wage and overtime: employees of seasonal amusement or recreational
businesses; employees of local newspapers having a circulation of less than 4,000;
newspaper delivery workers; switchboard operators employed by phone companies that
have no more than 750 stations and some farmworkers. xlii DelPo and Guerin
recommend conducting annual job classification audits. “Once a year, review the jobs
titles, classifications, and actual responsibilities of the employees reporting to you.
Make sure that employees who are classified as exempt from wage and hour laws meet
the legal requirements.”xliii
According to The American Bar Association Guide to Workplace Law, the
requirement that exempt employees be paid on a salary basis under FLSA “requires
that the amount paid to the employee not be subject to reduction because of variations
in the quality or quantity of work performed. To maintain this exemption, an exempt
employee must receive the full salary for any week in which he performs any work,
without regard to the number of days or hours worked.” xliv There are certain
circumstances under which an exempt employee can suffer a pay deduction and not
lose exempt status under FLSA:
Deductions from pay are permissible when an exempt employee: is absent from
work for one or more full days for personal reasons other than sickness or
disability; for absences of one or more full days due to sickness or disability if the
deduction is made in accordance with a bona fide plan, policy or practice of
providing compensation for salary lost due to illness; to offset amounts
employees receive as jury or witness fees, or for military pay; for penalties
imposed in good faith for infractions of safety rules of major significance; or for
unpaid disciplinary suspensions of one or more full days imposed in good faith
for workplace conduct rule infractions. Also, an employer is not required to pay
the full salary in the initial or terminal week of employment, or for weeks in which
an exempt employee takes unpaid leave under the Family and Medical Leave
Act.xlv
DelPo and Guerin advise against docking an exempt employee’s pay. “Find another
way to discipline exempt employees for poor performance or minor misconduct. If you
reduce an exempt employee’s salary for these reasons, you risk making that
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employee—and all other employees who work for you in the same job classification—
eligible for overtime.”xlvi

Overtime
Under the FLSA, employers are required to pay non-exempt employees overtime
pay for any hours worked beyond 40 in a week. The rate of pay for overtime is oneand-a-half times the regular hourly rate. For salaried non-exempt employees, their
annual salary should be broken down to an hourly rate based on a 40-hour workweek.
An employee’s regular compensation rate, for the purposes of overtime computation,
includes longevity pay, shift differentials and nondiscretionary bonuses (such as
educational stipends). xlvii
Overtime pay must be paid to the employee when due, which is considered the
next regularly scheduled pay day. The danger to an employer of paying overtime
wages late is that it is usually considered the same as not paying wages under the
FLSA, which can result in a judgment against the organization of double damages. An
employer is only obligated to pay overtime on time actually worked, not on time for
which the employee is paid. xlviii For example, an employee on a 5-day a week, 8-hour
per day schedule takes two paid vacation days
on Monday and Tuesday, and then works three
An employee’s
10-hour days, has worked a total of 30 hours for
regular compensation
that 7-day period (assuming two weekend days
off), and is not entitled to overtime. The
rate includes
employee would be paid for 46 hours, but only
longevity pay, shift
entitled to straight time (regular) pay for the two
differentials and
extra hours per day of work on Wednesday,
Thursday and Friday that fall beyond that
nondiscretionary
employee’s normal 8-hour day. An employer
bonuses.
can designate its workweek to start on any day
of the week, but cannot manipulate that day
from one week to another in order to avoid
paying overtime.
DelPo and Guerin recommend that employers require employees to get
authorization prior to working overtime. “If your reports work overtime—even without
your knowledge or permission—the company will have to pay them for it. Cut down on
surprises by requiring employees to get your approval in advance. And discipline
employees who continue to work unauthorized overtime.” xlix An announcement that the
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company will not pay overtime or permit any employee to work overtime will not protect
the employer from responsibility to pay an employee who works overtime.
Many managers make the mistake of believing that compensatory time (“comp
time”) is an acceptable alternative to paying overtime. For private employers, giving an
employee an hour to take off from work at a later date for an hour of overtime worked is
illegal under FLSA. It is legal to adjust an employee’s hours during a workweek to
ensure that the employee does not work more than 40 hours during said workweek. l In
addition, employers can avoid paying overtime for employees who work more than 40
hours in a week if those employees then take time off without pay in the same pay
period (for example, in the following week), making the total amount of the paycheck for
the two-week period what it would normally equal without overtime pay. In this
situation, the employee would need to take off an hour and a half for every hour worked
over 40 the previous week so that the arrangement would be legal under FLSA. li
Although some workers would not mind trading an hour of future time off for an
hour of overtime worked, and in fact may prefer it to overtime pay, Steingold cautions
against making private deals with employees, even though federal and state labor
investigators rarely look into comp time arrangements unless an employee files a
complaint. “This can be dangerous. You never know when a friendly, loyal employee
may turn sour and look for some legal technicalities to use against you.” lii
DelPo and Guerin concur with Steingold: “It is illegal for private employers to use
comp time, but some managers have an informal practice of allowing it anyway. Even if
your employees would rather take comp time than be paid overtime, don’t fall into this
habit.”liii In fact, the Department of Labor’s fact sheet on overtime pay requirements
explicitly states that the “overtime requirement may not be waived by agreement
between the employer and employees.”liv

Equal Pay Act
The Equal Pay Act of 1963 is a significant amendment to the FLSA, making it
illegal for employers to practice gender discrimination when paying employees. At the
time it was passed, women made just 59 cents for every dollar earned by a man. The
Equal Pay Act requires that men and women be provided equal pay and benefits for the
same or “substantively” equivalent work without regard to gender. “A common core of
tasks must be similar, but tasks performed only intermittently or infrequently do not
make jobs different enough to justify significantly different wages.” lv Two jobs are equal
for the purposes of the Equal Pay Act, according to Steingold, “when both jobs require
the same level of skill, effort and responsibility—and are performed under equal
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conditions. The jobs do not have to be identical to be equal.” lvi Steingold recommends
employers consider as equal those jobs that contain only small differences. lvii However,
employers are allowed to pay women and men
in the same jobs differently due to differences
in seniority, performance, quality or quantity of
The Equal Pay Act’s
production and factors other than sex, such as
protections extend to
“skill, effort and working conditions.”lviii The
men as well as
Equal Employment Opportunity Commission
women.
enforces the Equal Pay Act, which applies to all
employers regardless of size. Employers
should note that while the Equal Pay Act was
passed to combat rampant discriminatory
practices against women in matters of compensation and benefits, the law’s protections
against unequal pay extend to men as well as women.
A related concept gaining increasing support in some states is pay equity, which
holds that pay for jobs of similar worth or requiring similar levels of knowledge, skill and
ability should receive similar pay. The impetus for the idea of pay equity is that, in 2008,
the annual average pay rate for full-time female workers was 80 percent of what the
average full-time male worker earned. lix Federal courts, however, have typically “ruled
that the existence of pay differences between different jobs held by women and men is
not sufficient to prove that illegal discrimination has occurred.” lx

Health Care Reform and FLSA
The most recent amendment to the FLSA occurred as a result of the passage of
the Patient Protection and Affordable Care Act in 2010. The law entitles a new mother
to take a break from work each time she needs to express breast milk for up to a year
following the birth of a child. The employer must have a private place, other than a rest
room, where the new mother can express the breast milk.lxi The law does not indicate a
specific time or numbers of breaks, but calls for “reasonable” break time as needed for
the aforementioned purpose. Employers with fewer than 50 employees are exempted
from following the law if it would impose an undue hardship (Steingold: “defined as
significant expense or difficulty, considering the employer’s size, structure and
resources”) on the organization. lxii Only employees who are not exempt from overtime
under the FLSA are entitled by law to lactation breaks, though state laws may require
such breaks for all new mothers. lxiii
Employers are not obligated to compensate employees for such breaks, though
employers who give paid breaks to their workers must similarly compensate the
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lactation breaks. However, employers who do not wish to give paid breaks must ensure
the entire break time is free from work; otherwise they are obligated to pay the
employee.
DelPo and Guerin believe the new law benefits not just new mothers, but
employers as well. “For employers, providing these breaks makes good sense. It
allows women to return to work more quickly after having a baby, enhances employee
loyalty, and provides mothers and babies with the proven health benefits of breast
feeding.”lxiv

Rest Breaks
Under the FLSA, employers are not obligated to provide rest or coffee breaks for
employees. If an organization does give rest breaks, it must pay employees for breaks
of 20 minutes or less. The employer is not required to compensate employees for
breaks longer than 20 minutes, including meal breaks, assuming the employee is
relieved of all job duties for the duration of that break.
Steingold advises employers that “it’s better not to quibble” when it comes to
providing—and paying—for brief rest periods. “Most employees today expect to get one
or two paid breaks during an eight-hour shift. Such breaks may help employees work
more efficiently, because they’ll return to the job refreshed. It can put a damper on
employee morale if you try to avoid paying for that time.” lxv

Employee Records
All employers covered by the FLSA must keep certain accurate employee
records for each non-exempt employee that includes identifying information about the
employee and data on their hours worked and wages earned. No specific form is
mandated, but the Department of Labor lists the following information as required:
1. Employee's full name and social security number.
2. Address, including zip code.
3. Birth date, if younger than 19.
4. Sex and occupation.
5. Time and day of week when employee's workweek begins.
6. Hours worked each day.
7. Total hours worked each workweek.
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8. Basis on which employee's wages are paid (e.g., "$9 per hour", "$440 a week",
"piecework")
9. Regular hourly pay rate.
10. Total daily or weekly straight-time earnings.
11. Total overtime earnings for the workweek.
12. All additions to or deductions from the employee's wages.
13. Total wages paid each pay period.
14. Date of payment and the pay period covered by the payment.lxvi
Under the FLSA, employers are required to maintain payroll records, collective
bargaining agreements and sales and purchase records for three years. “Records on
which wage computations are based should be retained for two years, i.e., time cards
and piece work tickets, wage rate tables, work and time schedules, and records of
additions or deductions from wages.” lxvii The
records need to be housed at the place of
employment or a central office and made
Employers are
available for inspection by the Wage and Hour
required to maintain
Division of the Department of Labor.

payroll records,
collective bargaining
agreements and sales
and purchase records
for three years.

While a company could be sued for
failing to comply with FLSA record-keeping
requirements, most issues related to record
keeping arise during litigation over such claims
as failure to pay overtime or improper
deductions of pay. lxviii DelPo and Guerin
explain, “The real danger of failing to keep
adequate records is that your company will be
unable to prove that it complied with wage and hour laws if the government or an
employee challenges its practices…And once workers offer some evidence that they
worked any hours for which they were not paid, the burden shifts to the company to
prove its workers wrong, or to at least show that they are overstating their unpaid hours.
A company that hasn’t kept records won’t be able to meet this burden.”lxix

September 2012
15

Ross Brand



Conclusion
Since 1938, the Fair Labor Standards Act has been responsible for giving nonexempt workers basic rights, such as a minimum wage and overtime pay. It has
protected younger U.S. workers from suffering the abuses experienced by children prior
to its passage and prevented employers from having minors toil in hazardous
occupations. Over the years, the law has been amended to help female workers
overcome wage discrimination and assist new mothers who are balancing the demands
of their employer with health needs of their newborn.
For employers, the FLSA remains a sometimes daunting piece of legislation that
requires time and effort for adequate compliance. An organization that treats
employees as independent contractors, misclassifies non-exempt employees, fails to
pay overtime, makes private comp time agreements with non-exempt employees, has
pay or benefit systems that differ along gender lines, retaliates against an employee
who files an FLSA complaint or simply fails to remain abreast of the latest regulations of
the Department of Labor can find itself facing stiff penalties. The investigations
conducted by the Wage and Hour Division and penalties subsequently imposed by the
DOL can cost an organization millions of dollars. Moreover, courts will likely find in
favor of employees unless the company can disprove the employees claims. Failure to
pay overtime can result in liquidated (double) damages imposed on the offending
organization. It is essential for any organization to regularly review its job
classifications, job duties, compensation and benefit policies and recordkeeping. And
when in doubt, consult an attorney.

September 2012
16

Ross Brand



End Notes
i

Patrick J. Cihon and James Ottavio Castagnera, Employment & Labor Law, 7th ed. (United States:
South-Western Cengage Learning, 2011) 689.
ii
The American Bar Association Guide to Workplace Law, 2nd ed. (New York: Random House Reference,
2006) 281.
iii
Chamberlain, Kaufman and Jones: Attorneys at Law, “FLSA Homepage,” (2006), accessed April 12,
2012, http://www.flsa.com/index.html.
iv
Ronald Miller and Lisa Milam-Perez, “CCH Employment Law Briefing: White-Collar Exemption
Revisions,” CCH, (April 21, 2004), accessed April 12, 2012.
http://www.cch.com/press/news/2004/EmploymentLawBriefing.pdf.
v
Miller and Milam-Perez, “CCH Employment Law Briefing.”
vi
Fred S. Steingold, The Employer’s Legal Handbook, 10th ed. (United States: Nolo, 2011) 71.
vii
American Bar Association Guide to Workplace Law, 280-281.
viii
Amy DelPo and Lisa Guerin, The Manager’s Legal Handbook, 6th ed. (United States: Nolo, 2011) 5960.
ix
Cihon and Castagnera, Employment and Labor Law, 684-685.
x
Cihon and Castagnera, Employment and Labor Law, 685.
xi
Society for Human Resource Management: SHRM Essentials of HR Management (United States:
SHRM, 2010) 23.
xii xii
Steingold, Employer’s Legal Handbook, 81.
xiii
SHRM Essentials of HR Management, 28.
xiv
xv
xvi
xvii
xviii
xix
xx
xxi
xxii
SHRM Essentials of HR Management, 24-25.
xxiii
U.S. Department of Labor, Wage and Hour Division, “Fact Sheet #13: Employment Relationship Under
the Fair Labor Standards Act (FLSA),” accessed April 12, 2012.
http://www.dol.gov/whd/regs/compliance/whdfs13.pdf.
xxiv
DelPo and Guerin, Manager’s Legal Handbook, 85.
xxv
xxvi
xxvii
xxviii
xxix
“FLSA Homepage.”
xxx
xxxi
xxxii
xxxiii
xxxiv
xxxv
xxxvi
xxxvii
xxxviii
xxxix
xl
September 2012
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Ross Brand



xli

Steingold, Employer’s Legal Handbook, 62-63.
xliii
xliv
American Bar Association Guide to Workplace Law, 77.
xlv
U.S. Department of Labor, Wage and Hour Division, “Fact Sheet #17G: Salary Basis Requirement and
the Part 541 Exemption Under the Fair Labor Standards Act (FLSA),” accessed April 12, 2012,
http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.pdf.
xlvi
xlvii
xlviii
xlix
l
li
lii
liii
liv
U.S. Department of Labor, Wage and Hour Division, “Fact Sheet #23: Overtime Pay Requirements of
the FLSA,” accessed April 12, 2012, http://www.dol.gov/whd/regs/compliance/whdfs23.pdf.
lv
Robert L. Mathis and John H. Jackson, Human Resource Management, 13th ed. (United States: SouthWestern Cengage Learning, 2011) 83.
lvi
lvii
lviii
Mathis and Jackson, Human Resource Management, p.83.
lix
lx
lxi
DelPo and Guerin, Manager’s Legal Handbook, 71-72.
lxii
lxiii
U.S. Department of Labor, Wage and Hour Division, “Fact Sheet #73: Break Time for Nursing Mothers
Under the FLSA,” accessed April 16, 2012, http://www.dol.gov/whd/regs/compliance/whdfs73.pdf.
lxiv
lxv
lxvi
U.S. Department of Labor, Wage and Hour Division, “Fact Sheet #21: Record Keeping Requirements
under the Fair Labor Standards Act (FLSA),” accessed April 12, 2012,
lxvii
DOL, “Fact Sheet #21”
lxviii
lxix
xlii

September 2012
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Ross Brand



Bibliography
Allen, Jamerson C., and Mark S. Askanas. “Federal Appeals Court Finds Newspaper Reporters
Not Exempt as FLSA Creative Professionals.” Jackson Lewis LLP Workplace Resource Center.
October 5, 2010. Accessed April 12, 2012.
http://www.jacksonlewis.com/resources.php?NewsID=3415.
The American Bar Association Guide to Workplace Law. 2nd ed. New York: Random House
Reference, 2006.
Chamberlain, Kaufman and Jones: Attorneys at Law. “FLSA Homepage.” 2006. Accessed
April 12, 2012. http://www.flsa.com/index.html.
Cihon, Patrick J., and James Ottavio Castagnera. Employment & Labor Law. 7th ed. United
States: South-Western Cengage Learning, 2011.
DelPo, Amy, and Lisa Guerin. The Manager’s Legal Handbook. 6th ed. United States: Nolo,
2011.
Ellis, Steven M. “Reporters Not Exempt From Overtime Pay Rules—Court.” Metropolitan
News-Enterprise. September 28, 2010. Accessed April 12, 2012.
http://www.metnews.com/articles/2010/wang092810.htm.
Kaufman, Thomas, and Michael Gallion. “9th Circuit: Wage and Hour Class Action Prevails.”
Society for Human Resource Management. October 22, 2010. Accessed April 12, 2012.
http://www.shrm.org/LegalIssues/FederalResources/Pages/9thWageandHour.aspx.
Lindeman, Devora L. “Reporters are Not ‘Creative’ Professionals.” Greenwald Doherty
Overtime Advisor. October 25, 2010. Accessed April 12, 2012.
http://www.overtimeadvisor.com/2010/10/articles/overtime-pay/reporters-are-not-creativeprofessionals/.
Mathis, Robert L., and John H. Jackson. Human Resource Management. 13th ed. United
States: South-Western Cengage Learning, 2011.
Miller, Ronald, and Lisa Milam-Perez. “CCH Employment Law Briefing: White-Collar Exemption
Revisions.” CCH. April 21, 2004. Accessed April 12, 2012.
http://www.cch.com/press/news/2004/EmploymentLawBriefing.pdf.
Olson, Camille A., Noah A. Finkel, and Russell H. Gore. “May-June 2004: Overtime Exemption
Regulations for White-Collar Employees.” SHRM Legal Report. June 1, 2004 (Last reviewed
December 2006). Accessed April 12, 2012.
http://www.shrm.org/publications/legalreport/pages/cms_008644.aspx.

September 2012
19

Ross Brand



Society for Human Resource Management: SHRM Essentials of HR Management. United
States: SHRM, 2010.
Steingold, Fred S. The Employer’s Legal Handbook. 10th ed. United States: Nolo, 2011.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #13: Employment
Relationship Under the Fair Labor Standards Act (FLSA).” Accessed April 12, 2012.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #14: Coverage Under the Fair
Labor Standards Act (FLSA).” Accessed April 12, 2012.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #17D: Exemption for
Professional Employees Under the Fair Labor Standards Act (FLSA).” Accessed April 12, 2012.
http://www.dol.gov/whd/regs/compliance/fairpay/fs17d_professional.pdf.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #17G: Salary Basis
Requirement and the Part 541 Exemption Under the Fair Labor Standards Act (FLSA).”
Accessed April 12, 2012. http://www.dol.gov/whd/regs/compliance/fairpay/fs17g_salary.pdf.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #17Q: Journalists/Reporters
and the Part 541-Exemption under the Fair Labor Standards Act (FLSA).” Accessed April 12,
2012. http://www.dol.gov/whd/regs/compliance/fairpay/fs17q_journalists.pdf.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #17R: Administrative Duties
Test: Court Decision.” Accessed April 12, 2012.
http://www.dol.gov/whd/regs/compliance/fairpay/fs17r_geico.pdf.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #21: Record Keeping
Requirements under the Fair Labor Standards Act (FLSA).” Accessed April 12, 2012.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #23: Overtime Pay
Requirements of the FLSA.” Accessed April 12, 2012.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #71: Internship Programs
Under the Fair Labor Standards Act.” Accessed April 16, 2012.
U.S. Department of Labor, Wage and Hour Division. “Fact Sheet #73: Break Time for Nursing
Mothers Under the FLSA.” Accessed April 16, 2012.
September 2012
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Ross Brand



Ross Brand is an HR professional, SHRM Chapter President and Master of
Science candidate in HR Management and Development at New York University. His
professional background includes working as a writer, print journalist and radio
personality. He earned a Bachelor of Arts in History from Lafayette College.

Acknowledgements
Thank you to Dr. Susan Alevas, my graduate professor of Advanced Labor
Relations and Employment Law at New York University, for providing the forum for, and
encouragement of, in-depth exploration of legal and ethical issues. Also, thanks to
Bintal Patel, M.S. Candidate in Publishing at NYU, for formatting the final text into ebook form. And, of course, thank you to my parents for your ongoing love and support.

Disclaimer
The contents of this paper are not intended or offered as legal advice. The
materials contained herein have been prepared for educational and informational
purposes only. They are not legal advice or legal opinions on any specific matters.
Transmission of the information is not intended to create, and receipt does not
constitute, a lawyer-client relationship between this paper or its author, and you or any
other user. Readers should not act, or fail to act, upon this information without seeking
professional counsel. No person should act or fail to act on any legal matter based on
the contents of this paper. Unless expressly stated otherwise, no contents contained
herein should be assumed to be produced by an attorney licensed in your state. The
author of this paper is not an attorney.

September 2012
21

FLSA 101 The Fair Labor Standards Act (e-book)

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