In the interest of giving low-level employees a fairly decent standard of living, the Fair Labor Standards Act (FLSA) was enacted in order to establish a bottom line of how employers can pay their workers. One of the most important items this law created was a federal minimum wage. As of this writing, the federal minimum wage is $7.25 an hour. Each state has its own minimum wage, and workers get paid whichever one is more.
Child labor laws, proper recordkeeping and statutes of overtime are also established by this law. If you plan on owning a personal business, then you need to become familiar with this law to ensure everyone in your company is treated appropriately.
What Does the FLSA Not Cover?
While there is plenty of information to be found in the FLSA, there is quite a lot that is not established. For example, this law does not create a limit on the number of hours an employee can work. As long as the worker is over the age of 16, you can have him or her work as many hours a week you want as long as you compensate them appropriately. There are quite a few other items that are not covered in the law:
- No information regarding when employees receive their final paychecks whether they are fired or quit on their own accord
- No material about fringe benefits and pay raises
- No information on vacations, holidays and rest breaks
- No established rules for premium pay for working on holidays or weekends
- No information about sick pay, severance, holidays and vacation time
Many states have their own laws on the books about the above items in order to compensate for the FLSA’s shortcomings. You can talk to a lawyer to discuss what local and state laws you have to deal with in addition to all the federal laws.
Who Gets Covered by the FLSA?
Numerous businesses have the qualities that mean they have to abide by the standards set in the FLSA. If your company is engaged in activities for a public agency, then you have to follow the laws in the FLSA. Additionally, if your company’s gross sales exceed more than $500,000 annually or if your organization’s primary function is to take care of the mentally ill, elderly or sick, then you have to follow the law. Non-office jobs such as babysitters, housekeepers, cooks or chauffeurs need to be paid according to the FLSA if they work eight hours or more per week for the same employer and if they earn more than $1,000 a year from the same individual employer.
How Does the FLSA Affect Employees Who Receive Tips?
An employee who earns $30 or more a month from tips is considered a tipped worker. While employers must still pay their workers a minimum of $2.13 an hour, the tips need to make up the difference. Going by the federal minimum wage, employees must earn enough tips each hour so that their hourly wage still comes out to $7.25. In the event that your workers do not make enough from tips to earn minimum wage, you will still need to pay them enough to earn that bare minimum.
If your business does pay workers in tips, then you need to inform your employees before they start working that they technically will be making $2.13 per hour. Additionally, if your business utilizes a tip pooling system, then you need to make sure that it is, in fact, a valid system.It should be fairly easy to give your employees a decent standard of living. For peace of mind, read up on state and federal laws surrounding minimum wages to ensure your company is remaining on the legal side of the law.
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