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Fair Labor Standards Act (FLSA)
In general, the Fair Labor Standards Act (FLSA) applies to most employees for work done for most employers, although there are certain exceptions. The FLSA mandates that employers pay employees a minimum wage of at least $5.85 per hour. That rate will increase to $6.55 per hour on July 24, 2008, and to $7.25 on July 24, 2009. Many states and municipalities have laws that require minimum wages that may be even higher than the federal minimum. Related articles on FLSA FLSA overtime rules require you to pay one-and-a-half times the employee's hourly rate for all hours worked over 40 in any workweek, unless the employee performs work that's considered exempt from overtime (such as salaried executives). Accurate time records are required for all nonexempt employees, and child labor restrictions apply. Classifying employees as exempt and nonexemptEmployers must carefully determine whether each worker is an employee and, if so, whether she's exempt or nonexempt under the FLSA. Incorrectly classifying a worker as an independent contractor when she's really an employee may lead to liability for failure to pay her for hours worked (not to mention the liability for failing to withhold employment taxes). Likewise, incorrectly classifying a nonexempt worker as exempt under the FLSA creates the risk of failure to pay overtime when she works more than 40 hours in a workweek. In either case, the employer typically lacks records of the hours worked, and it's vulnerable to claims for failure to pay for all hours worked. Be familiar with the rules concerning independent contractors and exemptions. You can find information about independent contractors and white-collar exemptions at the following websites:
FLSA enforcementThe U.S. Department of Labor (DOL) enforces the FLSA. Either an employee or the DOL can recover money that should have been paid to him — going back two years from the date of the lawsuit or three years for willful violations. He also can recover an equal amount in liquidated damages unless the employer can establish substantial justification for failure to comply with the law. Attorneys' fees also are available. Any employee who makes a complaint to the DOL, assists in such a complaint, or attempts to enforce his rights is protected from retaliation and may seek damages for emotional distress, as well as punitive damages, if retaliation is shown. Repeat offenders may be subject to criminal penalties. Related articles on FLSA from the State Employment Law Letters
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