The Fair Labor Standards Act (FLSA) is a U.S. law that protects workers against certain unfair pay practices. As such, the FLSA sets out labor regulations, including minimum wages, requirements for overtime pay, and limits on child labor. The FLSA—which was passed in 1938 and has had numerous changes over the years—is one of the most important laws for employers and employees to understand, as it sets out a wide array of regulations for those employed, whether salaried employees or paid by the hour.12

Key Takeaways

• The Fair Labor Standards Act (FLSA) protects workers against unfair employment practices.
• FLSA rules specify when workers are considered on the clock, when they should be paid overtime, and a minimum wage.
• Employees are deemed either exempt or nonexempt with regard to the FLSA.
• The FLSA applies to employers whose annual sales total $500,000 or more or are engaged in interstate commerce.
• Originally, the FLSA prohibited child labor; it has since been expanded to prohibit wage discrimination because of gender and age.

How the FLSA Works

The FLSA specifies when workers are “on the clock” and when times are not paid hours. There are also detailed rules concerning whether employees are exempt from the FLSA overtime regulations. The law requires that overtime be paid at one-and-a-half times the regular hourly rate (“time-and-a-half”) for all hours worked more than 40 during a seven-day workweek.3

The FLSA applies to workers who have an employee engaged in...

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