Fair Labor Standards Act: Overtime and Minimum Wage Standards
The Fair Labor Standards Act of 1938 (“FLSA”) is the United States’ main wage law. It affects most employers in the U.S., even small businesses. The FLSA establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector, and in the Federal, State, and local government.
- Requirements Under the FLSA
The FLSA sets the minimum wage at $7.25 per hour for covered nonexempt workers (effective July 24, 2009). It also requires time-and-a-half overtime pay for hourly employees who work more than Forty (40) hours in a workweek. There are, however, certain types of employees that are exempted from both minimum wage and overtime pay requirements, such as employees working in executive, administrative, or professional positions.
The FLSA imposes certain limits on the hours and type of duties that minors can be asked to do; the Act prohibits employment of minors in jobs that are detrimental to their health or well-being. Moreover, employers are required to display in a conspicuous place a notice that outlines the requirements of the FLSA, and must also maintain employee time and pay records.
- Wage Laws in Pennsylvania
The Pennsylvania Minimum Wage Act mirrors the FLSA and makes it illegal for an employer to retaliate against an employee asking for his/her overtime pay, for contacting an attorney, or for filing a complaint. The PA wage laws apply in addition to federal law and employers are required to comply with them even if the effect is more stringent than the FLSA.
The minimum wage in Pennsylvania is set at $7.25, and the law regarding overtime compensation is same as that under the FLSA. Some employees are exempt from overtime pay, such as executive, administrative, and professional employees, as well as supervisors who are employed only to supervise. The Pennsylvania Department of Labor and Industry enforces the PA minimum wage requirements. Moreover, the Pennsylvania Wage Payment and Collection laws track federal overtime laws.
In Philadelphia, employers are subject to the requirements of the FLSA as well as Pennsylvania wage laws.
- What Should Employers Ensure?
Employers should ensure compliance with both federal and state wage laws, which require them to pay employees the minimum wage set under the statutes, and also pay overtime when applicable. Employers should consult with Human Resources (“HR”) when making major changes to employees’ duties, which could make the employee eligible or ineligible for overtime pay. Moreover, employers should incorporate into their employee handbooks policies that clearly provide the wage rate of employees, the process of calculating overtime pay, and the types of employees who will be eligible for overtime pay.