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Fair Labor Standards Act: Understanding its Requirements

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Fair Labor Standards Act: Understanding its Requirements

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  1. Fair Labor Standards Act: Understanding its Requirements

  2. What is FLSA? Fair Labor Standards Act (FLSA) : • Sets standards for minimum wage and overtime pay. • Establishes record keeping standards. • Prescribes child labor standards FLSA does not regulate: • vacation, holiday, severance, or sick pay • meal or rest periods, holidays off, or vacations • premium pay for weekend or holiday work • pay raises or fringe benefits • discharge, termination, or final payment procedures

  3. FLSA Requirements • Minimum Wage Requirements • Overtime Pay Requirements • Record Keeping Requirements • Child Labor Restrictions

  4. Minimum Wage Requirements Effective July 24, 2009, federal minimum wage stands at $7.25/hour. The minimum wage requirements state that covered, non exempt employees must be paid not less than federal minimum wage for all hours worked. Minimum wage includes : • Wages • Commissions • Certain bonuses • Tips received by eligible employees • Reasonable cost of room, board and other “facilities” provided by the employer for the employee’s benefit

  5. Overtime Pay Requirements • FLSA defines overtime as time worked beyond prescribed hours. • Compensation payable for overtime is 1 ½ times the regular rate of pay for all hours over 40 hours in a workweek. • For instance, if an employee works 45 hours at an hourly rate of $10/hr, he is entitled to $10/hr for all 45 hours plus an additional $5/hr for the five OT hours, totaling up to $475 for the week.

  6. Record Keeping Requirements • Every employer covered by FLSA must maintain certain records for each covered, nonexempt worker. • Maintain payroll records, collective bargaining agreements, sales and purchase records for at least three years. • Retain wage computation records for two years including: • time cards and piecework tickets • wage rate tables • work and time schedules • records of additions to or deductions from wages

  7. Child Labor Rules Childlabor provisions under FLSA are designed to protect the educational opportunities of minors. These provisions: • Prohibit youth employment in jobs that are detrimental to their health and safety • Restrict hours that those under 16 years of age can work • List hazardous occupations too dangerous for young workers to perform

  8. Want to learn more about FLSA, its requirements and best practices to comply with them? ComplianceOnline webinars and seminars are a great training resource. Check out the following links: • Fair Labor Standards Act: Are Your Employees Classified Correctly? • The In's and Out's of FLSA • How to Conduct FLSA Classification Self-Audit • Avoiding Costly Wage and Hour Problems • How to Pay Overtime Correctly under FLSA • Handling Supplemental Pay Under the FLSA

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