A Guide to FLSA Compliance: Wages, Overtime, and Recordkeeping

Let’s talk about the Fair Labor Standards Act (FLSA). If you’re running payroll, this isn’t just a suggestion; it’s the “house rules” for the entire game. Getting FLSA compliance wrong isn’t just a simple mistake; it’s a fast track to wage theft accusations, massive fines, and legal battles you *do not* want to fight. This guide is your no-nonsense breakdown of the rules you need to follow for minimum wage, overtime, and recordkeeping. Let’s get compliant.

Understanding FLSA: The Basics You Can’t Ignore

To stay compliant, you need to get the basics down.

• Employee vs. Independent Contractor: If you control how and when someone works, they’re an employee. If not, they’re a contractor, and that means no FLSA coverage.
• Workweek: A seven-day, 168-hour period used to track wages and overtime. No shortcuts here.
• Hours Worked: Any time an employee is on the clock, whether in the office, working remotely, or handling emails after hours.
• Exempt vs. Non-Exempt: Some employees are exempt from overtime, but if you classify them wrong, be ready for a fight.

Minimum Wage: Because No One Works for Free

If you employ workers, they must be paid at least the federal minimum wage. Period.

• Tipped Employees: They can be paid a lower hourly wage as long as tips make up the difference. If they don’t, you owe them more.
• Wage Deductions: Room, board, and uniforms can’t cut into minimum wage. Trying to pass those costs onto employees is a great way to get sued.

Overtime: Clock Extra Hours, Get Extra Pay. Simple, Right?

Not paying overtime is wage theft, and the FLSA doesn’t play. FLSA compliance on overtime is critical.

• Overtime pay kicks in after 40 hours in a workweek at 1.5x the regular hourly rate.
• Piecework and salaried employees? Yep, they’re still entitled to overtime unless classified as exempt.

Hiring Minors? The FLSA Has a Few Things to Say

Child labor laws exist for a reason. Here’s what you need to know.

• Non-Agricultural Jobs:
  • Ages 16-17: Can work unlimited hours but only in non-hazardous roles.
  • Ages 14-15: Can work limited hours in approved, non-hazardous jobs.
• Agricultural Jobs: Restrictions depend on the type of farm work and whether it’s family-owned.

The Poster Rule: Because “I Didn’t Know” Won’t Work

Every employer must display the official FLSA Employee Rights poster where workers can see it. No poster, no excuses.

Recordkeeping: Keep Receipts, or Pay the Price

The government doesn’t do trust falls, so document everything. This is a core part of FLSA compliance.

• Personal details and job titles of employees.
• Hours worked each week, including overtime.
• Wages paid, deductions, and bonuses.
• Pay dates and periods covered.

Retaliation is Illegal. Full Stop.

Messing with employees who file complaints or report an FLSA violation is a fast track to even *more* fines, lawsuits, and a terrible company reputation. Violations of the FLSA could lead to:

• Back wages owed for unpaid work.
• Fines and penalties, especially for repeat offenders.
• Criminal charges for serious noncompliance.

Beyond the Basics: Other FLSA Rules

Beyond meeting the legal minimum, businesses should also consider:

• Nursing Mothers: Provide a private, non-bathroom space for breastfeeding employees for at least one year postpartum.
• Youth Wages: Employees under 20 can be paid a reduced wage for their first 90 days, but only if it’s legal in your state.
• State Laws: Some state wage laws are even stricter than the FLSA. Employers must follow the higher standard.

Frequently Asked Questions About FLSA Compliance

What is the main purpose of FLSA compliance?

The main purpose is to protect workers by setting federal standards for minimum wage, overtime pay (1.5x pay for over 40 hours a week), employer recordkeeping, and youth employment rules.

What is the difference between an exempt and non-exempt employee?

A non-exempt employee is covered by FLSA rules and *must* receive overtime pay. An exempt employee (like certain salaried executive, administrative, or professional roles) is not entitled to overtime. Misclassifying employees is one of the biggest FLSA compliance risks a company can take.

What are the FLSA recordkeeping requirements?

Employers must keep precise records of employee work hours (including total hours per workweek), wages paid, and personal information. These records are the primary way to prove FLSA compliance during an audit by the Department of Labor.

Before You Go, Here’s Another Must-Know.

The FLSA is just one piece of the compliance puzzle. If you’re handling payroll, employee benefits, or labor law, you also need to understand how it connects to other workplace regulations. That’s why you should check out the Wage and Hour Compliance (FLSA) Made Simple Training Course.

Expand Your Knowledge with FLSA Training.

This guide lays out the basics, but there’s way more to know about proper wage classification, exemptions, and compliance strategies. Get the full picture by enrolling in the Fair Labor Standards Act: FLSA Compliance Training Course today.

References

• U.S. Department of Labor (DOL) – Fair Labor Standards Act
• Wage and Hour Division (WHD) – Fact Sheets
• Occupational Safety and Health Administration (OSHA) – Compliance Assistance