Originally enacted in 1938, the Fair Labor Standards Act, or FLSA, established the 40 hour work week and guaranteed time and a half under certain circumstances, among other federal mandates. One of the key provisions of the FLSA is the federal minimum wage, which currently stands at $7.25 an hour. Over the years, the FLSA has been amended a handful of times, so it can be complicated to try to determine which employers must adhere to its tenets, and which employees are protected by it.
The FLSA is enforced by the federal government’s Wage and Hour Division (WHD), which has in excess of 200 local offices in the United States. The WHD has the authority to investigate and enforce the FLSA should an employee file a claim. If a claim is substantiated, the WHD can fine the employer. So, it’s important for any business to have a firm grasp on who and what is covered under the FLSA.
Minimum Wage Exceptions for Young Employees
The myriad minimum wage exceptions can be confusing, and many of them come with strings attached. It is impossible to discuss them all, so here we highlight those involving students and youth.
For employees under the age of 20, the FLSA makes a clear distinction under their Youth Minimum Wage Program. Under this program, an employer can pay an employee under the age of 20 years old a rate of $4.25 per hour, but only for the first 90 consecutive calendar days. Once the 90 days has passed, the employee then must be paid the federal or state minimum wage, whichever is higher.
Another exception to the federal minimum wage rule is the FLSA’s Full-Time Student Program. Under this program, employers can obtain a certificate from the WHD that allows them to pay a full-time student “not less than 85% of a minimum wage”. The certificate also limits the number of hours a student can work, however. The maximum hours a full-time student can work under this program when school is in session is 8 hours per day and 20 hours per week. The student can work a full 40 hour week when school is not in session.
For high school students aged 16+ who are enrolled in vocational courses, the certificate allows an employer to pay no less than 75% of the minimum wage rate for the duration of the student’s enrollment. Keep in mind that some states do set a higher minimum wage requirement than the federal government, so research that information beforehand to ensure that you’re also in compliance with state laws.
What the FLSA Does Not Cover
While the FLSA seems to cover quite a bit of ground related to the do’s and don’ts of employee wages, there are a few areas that it does not delve into. For example, the FLSA does not have guidelines for how to issue breaks (with the exception of nursing mothers), holidays or vacations. Additionally, it doesn’t cover sick pay or severance packages, or regulate pay raises or final checks paid to terminated employees.
As evidenced by the example of exceptions that pertain to hiring youth, it’s clear that the minimum wage piece of the FLSA is complex. However, in order to avoid employees filing complaints with the WHD, as well as the subsequent fall out, it is important to familiarize yourself with the FLSA and stay informed about any changes to the Act. The WHD offers a handy, but thorough, reference guide to the FLSA. Of course, if you have questions, it’s best to contact them directly.
Regardless of whether your business is a startup or long established in the community, or if it’s a sole proprietorship or a multinational corporation, there are federal business laws that you must follow. Not every federal business law applies to every business, however. Knowing which laws apply to you and your business will prevent you from enduring the stress and frustration of wasting money and time paying penalties and correcting any issues. Two basic, but critical areas of federal business law are the requirement of nearly every business to post specific notices, and the laws regarding workplace safety.