PARTIAL EXEMPTIONS FROM OVERTIME PAY
REFERENCE GUIDE TO THE
TO THE FAIR LABOR STANDARDS ACT
U.S. Dept of Labor
The Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay,
recordkeeping, and child labor standards affecting full-time and
part-time workers in the private sector and in Federal, State, and
The Wage and Hour Division (Wage-Hour) administers and enforces FLSA
with respect to private employment, State and local government
employment, and Federal employees of the Library of Congress, U.S.
Postal Service, Postal Rate Commission, and the Tennessee Valley
Authority. The FLSA is enforced by the U.S. Office of Personnel
Management for employees of other Executive Branch agencies, and by the
U.S. Congress for covered employees of the Legislative Branch.
Special rules apply to State and local government employment involving
fire protection and law enforcement activities, volunteer services, and
compensatory time off instead of cash overtime pay.
BASIC WAGE STANDARDS
Covered nonexempt workers are entitled to a minimum wage of not less
than $4.75 an hour, effective October 1, 1996, and not less than $5.15
an hour, effective September 1, 1997. Overtime pay at a rate of not
less than one and one-half times their regular rates of pay is required
after 40 hours of work in a workweek.
Wages required by FLSA are due on the regular payday for the pay period
covered. Deductions made from wages for such items as cash or
merchandise shortages, employer-required uniforms, and tools of the
trade, are not legal to the extent that they reduce the wages of
employees below the minimum rate required by FLSA or reduce the amount
of overtime pay due under FLSA.
The FLSA contains some exemptions from these basic standards. Some
apply to specific types of businesses; others apply to specific kinds
While FLSA does set basic minimum wage and overtime pay standards and
regulates the employment of minors, there are a number of employment
practices which FLSA does not regulate.
For example, FLSA does not require:
The FLSA does not provide wage payment or collection procedures for an
employee's usual or promised wages or commissions in excess of those
required by the FLSA. However, some States do have laws under which
such claims (sometimes including fringe benefits) may be filed.
- 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; and
- a discharge notice, reason for discharge, or immediate payment of
final wages to terminated employees.
Also, FLSA does not limit the number of hours in a day or days in a
week an employee may be required or scheduled to work, including
overtime hours, if the employee is at least 16 years old.
The above matters are for agreement between the employer and the
employees or their authorized representatives.
WHO IS COVERED?
All employees of certain enterprises having workers engaged in
interstate commerce, producing goods for interstate commerce, or
handling, selling, or otherwise working on goods or materials that have
been moved in or produced for such commerce by any person are covered
A covered enterprise is the related activities performed through
unified operation or common control by any person or persons for a
common business purpose and --
Construction and laundry/dry cleaning enterprises, which had been
previously covered regardless of their annual dollar volume of
business, became subject to the $500,000 test on April 1, 1990.
- whose annual gross volume of sales made or business done is not
less than $500,000 (exclusive of excise taxes at the retail level that
are separately stated); or
- is engaged in the operation of a hospital, an institution primarily
engaged in the care of the sick, the aged, or the mentally ill who
reside on the premises; a school for mentally or physically disabled or
gifted children; a preschool, an elementary or secondary school, or an
institution of higher education (whether operated for profit or not for
- is an activity of a public agency.
Any enterprise that was covered by FLSA on March 31, 1990, and that
ceased to be covered because of the $500,000 test, continues to be
subject to the overtime pay, child labor and recordkeeping provisions
Employees of firms which are not covered enterprises under FLSA still
may be subject to its minimum wage, overtime pay, and child labor
provisions if they are individually engaged in interstate commerce or
in the production of goods for interstate commerce, or in any
closely-related process or occupation directly essential to such
production. Such employees include those who: work in communications or
transportation; regularly use the mails, telephones, or telegraph for
interstate communication, or keep records of interstate transactions;
handle, ship, or receive goods moving in interstate commerce; regularly
cross State lines in the course of employment; or work for independent
employers who contract to do clerical, custodial, maintenance, or other
work for firms engaged in interstate commerce or in the production of
goods for interstate commerce.
Domestic service workers such as day workers, housekeepers, chauffeurs,
cooks, or full-time babysitters are covered if (1) their cash wages
from one employer are at least $1,000 in a calendar year (or the amount
designated pursuant to an adjustment provision in the Internal Revenue
Code), or (2) they work a total of more than 8 hours a week for one or
Tipped employees are those who customarily and regularly receive more
than $30 a month in tips. The employer may consider tips as part of
wages, but the employer must pay at least $2.13 an hour in direct wages.
The employer who elects to use the tip credit provision, must inform
the employee in advance and must be able to show that the employee
receives at least the minimum wage when direct wages and the tip credit
allowance are combined. If an employee's tips combined with the
employer's direct wages of at least $2.13 an hour do not equal the
minimum hourly wage, the employer must make up the difference. Also,
employees must retain all of their tips, except to the extent that they
participate in a valid tip pooling or sharing arrangement.
The reasonable cost or fair value of board, lodging, or other
facilities customarily furnished by the employer for the employee's
benefit may be considered part of wages.
The performance of certain types of work in an employee's home is
prohibited under the law unless the employer has obtained prior
certification from the Department of Labor. Restrictions apply in the
manufacture of knitted outerwear, gloves and mittens, buttons and
buckles, handkerchiefs, embroideries, and jewelry (where safety and
health hazards are not involved). The manufacture of women's apparel
(and jewelry under hazardous conditions) is generally prohibited. If
you have questions on whether a certain type of work is restricted, or
who is eligible for a homework certificate, or how to obtain a
certificate, you may contact the local Wage-Hour office.
SUBMINIMUM WAGE PROVISIONS
The FLSA provides for the employment of certain individuals at wage
rates below the statutory minimum. Such individuals include
student-learners (vocational education students), as well as full-time
students in retail or service establishments, agriculture, or
institutions of higher education. Also included are individuals whose
earning or productive capacity is impaired by a physical or mental
disability, including those related to age or injury, for the work to
be performed. Employment at less than the minimum wage is authorized to
prevent curtailment of opportunities for employment. Such employment is
permitted only under certificates issued by Wage-Hour.
YOUTH MINIMUM WAGE
A minimum wage of not less than $4.25 an hour is permitted for
employees under 20 years of age during their first 90 consecutive
calendar days of employment with an employer. Employers are prohibited
from taking any action to displace employees in order to hire employees
at the youth minimum wage. Also prohibited are partial displacements
such as reducing employees' hours, wages, or employment benefits.
Some employees are exempt from the overtime pay provisions or both the
minimum wage and overtime pay provisions.
Because exemptions are generally narrowly defined under FLSA, an
employer should carefully check the exact terms and conditions for
each. Detailed information is available from local Wage-Hour offices.
Following are examples of exemptions which are illustrative, but not
all-inclusive. These examples do not define the conditions for each
Exemptions from Both Minimum Wage and Overtime Pay
- Executive, administrative, and professional employees (including
teachers and academic administrative personnel in elementary and
secondary schools), outside sales employees, and employees in certain
computer-related occupations (as defined in Department of Labor
- Employees of certain seasonal amusement or recreational
establishments, employees of certain small newspapers, seamen employed
on foreign vessels, employees engaged in fishing operations, and
employees engaged in newspaper delivery;
- Farm workers employed by anyone who used no more than 500
"man-days" of farm labor in any calendar quarter of the preceding
- Casual babysitters and persons employed as companions to the
elderly or infirm.
Exemptions from Overtime Pay Only
- Certain commissioned employees of retail or service establishments;
auto, truck, trailer, farm implement, boat, or aircraft salesworkers,
or parts-clerks and mechanics servicing autos, trucks, or farm
implements, who are employed by nonmanufacturing establishments
primarily engaged in selling these items to ultimate purchasers;
- Employees of railroads and air carriers, taxi drivers, certain
employees of motor carriers, seamen on American vessels, and local
delivery employees paid on approved trip rate plans;
- Announcers, news editors, and chief engineers of certain
nonmetropolitan broadcasting stations;
- Domestic service workers living in the employer's residence;
- Employees of motion picture theaters; and
CHILD LABOR PROVISIONS
- Partial overtime pay exemptions apply to employees engaged in
certain operations on agricultural commodities and to employees of
certain bulk petroleum distributors.
- Hospitals and residential care establishments may adopt, by
agreement with their employees, a 14-day work period instead of the
usual 7-day workweek, if the employees are paid at least time and
one-half their regular rates for hours worked over 8 in a day or 80 in
a 14-day work period, whichever is the greater number of overtime hours.
- Employees who lack a high school diploma, or who have not attained
the educational level of the 8th grade, can be required to spend up to
10 hours in a workweek engaged in remedial reading or training in other
basic skills without receiving time and one-half overtime pay for these
hours. However, the employees must receive their normal wages for hours
spent in such training and the training must not be job specific.
The FLSA child labor provisions are designed to protect the educational
opportunities of minors and prohibit their employment in jobs and under
conditions detrimental to their health or well-being. The provisions
include restrictions on hours of work for minors under 16 and lists of
hazardous occupations orders for both farm and nonfarm jobs declared by
the Secretary of Labor to be too dangerous for minors to perform.
Further information on prohibited occupations is available from local
NONAGRICULTURAL JOBS (Child Labor)
Regulations governing youth employment in nonfarm jobs differ somewhat
from those pertaining to agricultural employment. In nonfarm work, the
permissible jobs and hours of work, by age, are as follows:
- Youths 18 years or older may perform any job, whether hazardous or
not, for unlimited hours;
- Youths 16 and 17 years old may perform any nonhazardous job, for
unlimited hours; and
- Youths 14 and 15 years old may work outside school hours in various
nonmanufacturing, nonmining, nonhazardous jobs under the following
conditions: no more than 3 hours on a school day, 18 hours in a school
week, 8 hours on a nonschool day, or 40 hours in a nonschool week.
Also, work may not begin before 7 a.m., nor end after 7 p.m., except
from June 1 through Labor Day, when evening hours are extended to 9
p.m. Under a special provision, youths 14 and 15 years old enrolled in
an approved Work Experience and Career Exploration Program (WECEP) may
be employed for up to 23 hours in school weeks and 3 hours on school
days (including during school hours).
Fourteen is the minimum age for most nonfarm work. However, at any age,
youths may deliver newspapers; perform in radio, television, movie, or
theatrical productions; work for parents in their solely-owned nonfarm
business (except in manufacturing or on hazardous jobs); or, gather
evergreens and make evergreen wreaths.
FARM JOBS (Child labor)
In farm work, permissible jobs and hours of work, by age, are as
- Youths 16 years and older may perform any job, whether hazardous or
not, for unlimited hours;
- Youths 14 and 15 years old may perform any nonhazardous farm job
outside of school hours;
- Youths 12 and 13 years old may work outside of school hours in
nonhazardous jobs, either with a parent's written consent or on the
same farm as the parent(s);
- Youths under 12 years old may perform jobs on farms owned or
operated by parent(s), or with a parent's written consent, outside of
school hours in nonhazardous jobs on farms not covered by minimum wage
Minors of any age may be employed by their parents at any time in any
occupation on a farm owned or operated by their parents.
The FLSA requires employers to keep records on wages, hours, and other
items, as specified in Department of Labor recordkeeping regulations.
Most of the information is of the kind generally maintained by
employers in ordinary business practice and in compliance with other
laws and regulations. The records do not have to be kept in any
particular form and time clocks need not be used. With respect to an
employee subject to the minimum wage provisions or both the minimum
wage and overtime pay provisions, the following records must be kept:
- personal information, including employee's name, home address,
occupation, sex, and birth date if under 19 years of age;
- hour and day when workweek begins;
- total hours worked each workday and each workweek;
- total daily or weekly straight-time earnings;
- regular hourly pay rate for any week when overtime is worked;
- total overtime pay for the workweek;
- deductions from or additions to wages;
- total wages paid each pay period; and
- date of payment and pay period covered.
Records required for exempt employees differ from those for nonexempt
workers. Special information is required for homeworkers, for employees
working under uncommon pay arrangements, for employees to whom lodging
or other facilities are furnished, and for employees receiving remedial
TERMS USED IN FLSA
- Workweek -- A workweek is a period of 168 hours during 7 consecutive 24-hour periods. It may begin on any day of the week and at any hour of the day established by the employer. Generally, for purposes of minimum wage and overtime payment each workweek stands alone; there can be no averaging of 2 or more workweeks. Employee coverage, compliance with wage payment requirements, and the application of most exemptions are determined on a workweek basis.
COMPUTING OVERTIME PAY
- Hours Worked -- Covered employees must be paid for all hours worked in a workweek. In general, "hours worked" includes all time an employee
must be on duty, or on the employer's premises or at any other
prescribed place of work. Also included is any additional time the
employee is allowed (i.e., suffered or permitted) to work.
Overtime must be paid at a rate of at least one and one-half times the
employee's regular rate of pay for each hour worked in a workweek in
excess of the maximum allowable in a given type of employment.
Generally, the regular rate includes all payments made by the employer
to or on behalf of the employee (except for certain statutory
exclusions). The following examples are based on a maximum 40-hour
- Hourly rate -- (regular pay rate for an employee paid by the hour).
If more than 40 hours are worked, at least one and one-half times the
regular rate for each hour over 40 is due.
Example: An employee paid $8.00 an hour works 44 hours in a workweek.
The employee is entitled to at least one and one-half times $8.00, or
$12.00, for each hour over 40. Pay for the week would be $320 for the
first 40 hours, plus $48.00 for the four hours of overtime--a total of
Piece rate -- The regular rate of pay for an employee paid on a
piecework basis is obtained by dividing the total weekly earnings by
the total number of hours worked in that week. The employee is entitled
to an additional one-half times this regular rate for each hour over
40, plus the full piecework earnings
Example: An employee paid on a piecework basis works 45 hours in a week
and earns $315. The regular rate of pay for that week is $315 divided
by 45, or $7.00 an hour. In addition to the straight-time pay, the
employee is also entitled to $3.50 (half the regular rate) for each
hour over 40 -- an additional $17.50 for the 5 overtime hours -- for a
total of $332.50.
Salary -- the regular rate for an employee paid a salary for a
regular or specified number of hours a week is obtained by dividing the
salary by the number of hours for which the salary is intended to
Another way to compensate pieceworkers for overtime, if agreed to
before the work is performed, is to pay one and one-half times the
piece rate for each piece produced during the overtime hours.
The piece rate must be the one actually paid during nonovertime hours
and must be enough to yield at least the minimum wage per hour.
If, under the employment agreement, a salary sufficient to meet the
minimum wage requirement in every workweek is paid as straight time for
whatever number of hours are worked in a workweek, the regular rate is
obtained by dividing the salary by the number of hours worked each
week. To illustrate, suppose an employee's hours of work vary each week
and the agreement with the employer is that the employee will be paid
$420 a week for whatever number of hours of work are required. Under
this agreement, the regular rate will vary in overtime weeks. If the
employee works 50 hours, the regular rate is $8.40 ($420 divided by 50
hours). In addition to the salary, half the regular rate, or $4.20 is
due for each of the 10 overtime hours, for a total of $462 for the
week. If the employee works 60 hours, the regular rate is $7.00 ($420
divided by 60 hours). In that case, an additional $3.50 is due for each
of the 20 overtime hours, for a total of $490 for the week.
In no case may the regular rate be less than the minimum wage required
If a salary is paid on other than a weekly basis, the weekly pay must
be determined in order to compute the regular rate and overtime pay. If
the salary is for a half month, it must be multiplied by 24 and the
product divided by 52 weeks to get the weekly equivalent. A monthly
salary should be multiplied by 12 and the product divided by 52.
Wage-Hour's enforcement of FLSA is carried out by investigators
stationed across the U.S. As Wage-Hour's authorized representatives,
they conduct investigations and gather data on wages, hours, and other
employment conditions or practices, in order to determine compliance
with the law. Where violations are found, they also may recommend
changes in employment practices to bring an employer into compliance.
It is a violation to fire or in any other manner discriminate against
an employee for filing a complaint or for participating in a legal
proceeding under FLSA.
Willful violations may be prosecuted criminally and the violator fined
up to $10,000. A second conviction may result in imprisonment.
Violators of the child labor provisions are subject to a civil money
penalty of up to $10,000 for each employee who was the subject of a
Employers who willfully or repeatedly violate the minimum wage or
overtime pay requirements are subject to a civil money penalty of up to
$1,000 for each such violation.
The FLSA prohibits the shipment of goods in interstate commerce which
were produced in violation of the minimum wage, overtime pay, child
labor, or special minimum wage provisions.
RECOVERY OF BACK WAGES
Listed below are methods which FLSA provides for recovering unpaid
minimum and/or overtime wages.
- Wage-Hour may supervise payment of back wages.
- The Secretary of Labor may bring suit for back wages and an equal
amount as liquidated damages.
- An employee may file a private suit for back pay and an equal
amount as liquidated damages, plus attorney's fees and court costs.
- The Secretary of Labor may obtain an injunction to restrain any
person from violating FLSA, including the unlawful withholding of
proper minimum wage and overtime pay.
An employee may not bring suit if he or she has been paid back wages
under the supervision of Wage-Hour or if the Secretary of Labor has
already filed suit to recover the wages.
A 2-year statute of limitations applies to the recovery of back pay,
except in the case of willful violation, in which case a 3-year statute
OTHER LABOR LAWS
In addition to FLSA, Wage-Hour enforces and administers a number of
other labor laws. Among these are:
- the Davis-Bacon and Related Acts, which require payment of
prevailing wage rates and fringe benefits on federally-financed or
- the Walsh-Healey Public Contracts Act, which requires payment of
minimum wage rates and overtime pay on contracts to provide goods to
the Federal Government;
- the Service Contract Act, which requires payment of prevailing wage
rates and fringe benefits on contracts to provide services to the
- the Contract Work Hours and Safety Standards Act, which sets
overtime standards for service and construction contracts;
- the Migrant and Seasonal Agricultural Worker Protection Act, which
protects farm workers by imposing certain requirements on agricultural
employers and associations and requires the registration of crewleaders
who must also provide the same worker protections;
- the Wage Garnishment Law, which limits the amount of an
individual's income that may be legally garnished and prohibits firing
an employee whose pay is garnished for payment of a single debt;
- the Employee Polygraph Protection Act, which prohibits most private
employers from using any type of lie detector test either for
pre-employment screening of job applicants or for testing current
employees during the course of employment;
- the Family and Medical Leave Act, which entitles eligible employees
of covered employers to take up to 12 weeks of unpaid job-protected
leave each year, with maintenance of group health insurance, for the
birth and care of a child, for the placement of a child for adoption or
foster care, for the care of a child, spouse, or parent with a serious
health condition, or for the employee's serious health condition; and
- the Immigration and Nationality Act, as amended, which:
- under the employment eligibility provisions, requires
employers to verify the employment eligibility of all individuals hired
and keep Immigration and Naturalization Service forms (I-9) on file for
at least 3 years and for one year after an employee is terminated;
- under the H-2A provisions, provides for the enforcement of
contractual obligations of job offers which have been certified to by
employers of temporary alien nonimmigrant agricultural workers;
- under the H-1A provisions, provides for the enforcement of
employment conditions attested to by employers of H-1A temporary alien
nonimmigrant registered nurses;
- under the D-1 provisions, provides for the enforcement of
employment conditions attested to by employers seeking to employ alien
crewmembers to perform specified longshore activity at U.S. ports;
- under the H-1B provisions, provides for the enforcement of
labor condition applications filed by employers wishing to employ
aliens in specialty occupations and as fashion models of distinguished
merit and ability; and
- under the F-1 provisions, provides for the enforcement of
attestations by employers seeking to use aliens admitted as students in
More detailed information on FLSA and other laws administered by
Wage-Hour is available from local Wage-Hour offices, which are listed
in most telephone directories under U.S. Government, Department of
Labor, Wage and Hour Division. For those who have access to the
Internet, further information may also be obtained on the Wage and Hour
Division Internet Home Page which can be located at the following
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA)
In accordance with the provisions of the SBREFA, the Small Business
Administration has established a National Small Business and
Agriculture Regulatory Ombudsman and l0 Regional Fairness Boards to
receive comments from small businesses about federal agency enforcement
actions. The Ombudsman annually evaluates enforcement activities and
rates each agency’s responsiveness to small business. Small
businesses wishing to comment on the enforcement activities of the Wage
and Hour Division may call l-888-REG-FAIR (l-888-734-3247), or write to
the Ombudsman at 500 W. Madison Street, Suite l240, Chicago, Illinois
The right to file a comment with the Ombudsman is in addition to any
other rights a small business may have, including the right to contest
the assessment of a civil money penalty. Filing a comment with the
Ombudsman neither extends the maximum time period for contesting the
assessment of a penalty, nor takes the place of filing the response
required to secure an administrative hearing on a penalty.
EQUAL PAY PROVISIONS
The equal pay provisions of FLSA prohibit sex-based wage differentials
between men and women employed in the same establishment who perform
jobs that require equal skill, effort, and responsibility and which are
performed under similar working conditions. These provisions, as well
as other statutes prohibiting discrimination in employment, are
enforced by the Equal Employment Opportunity Commission. More detailed
information is available from its offices which are listed in most
telephone directories under U.S. Government.