FLSA

Fair Labor Standards Act (FLSA) Compliance

The Fair Labor Standard Act (FLSA) provides certain guarantees to employees about the minimum rate of pay for overtime. Time and attendance software can be used to help you comply with these labor laws.

What Employees Are Covered under the FLSA?

The Fair Labor Standards Act has specific rules about which employees are covered under the act and which are exempt employees. The terms “exempt” and “non-exempt” have become commonplace terms that refer to employees who are either not covered under the FLSA (exempt) and those that are covered (non-exempt).

Generally, managerial and professional employees are exempt from the requirements of the Fair Labor Standards Act, and all other employees are covered. However, the requirements are very complex. For specific information, we recommend that you consult one of the FLSA references that we have compiled.

In addition, there are specific rules and regulations that apply to many different industries such as restaurants (rules about tipped employees, for example), construction, manufacturing, etc. Again, please refer to one the references listed below for more information.

Many states, such as California, have other overtime labor laws with which you may need to comply as well.

Required Overtime Rate

The Fair Labor Standard Act generally requires employers to pay employees overtime for hours worked over 40 in a week. Generally, eligible employees must be paid overtime at 1 ½ times the employee’s “regular rate” as defined by the FLSA.

The FLSA does not require employers to pay overtime for Saturdays, Sundays, holidays, time over 8 hours in a day, or for any other situation. Employers may elect to pay overtime in these situations. However, such overtime is paid either as a custom, as required by state law, or as negotiated in a union contract. When the employer pays such overtime, it may be eligible as a credit toward the requirements of the Fair Labor Standards Act.

What is the Regular Rate of Pay for FLSA?

The regular rate of pay is the “average” rate of pay that the employee received during the period. For example if an employee worked multiple jobs in a period and each was paid at a different rate, any overtime hours must be paid at the weighted average rate.

The average rate must also take into account certain additional payments to employees. Items that generally count towards the regular rate are shift premiums and non-discretionary bonuses. Items that are generally excluded from the regular rate are overtime pay at a rate of 1½ times or higher than the employee’s base rate.

Defining what is included or excluded from the regular rate is one of the most difficult aspects of the Fair Labor Standards Act. Consult one of The Fair Labor Standard Act References that we have compiled for you for more information.

Credit for Daily Overtime or Premium Pay?

The Fair Labor Standards Act permits employers to receive a credit against the amount of overtime due to an employee for certain types of payments. Generally, any payment that is at or in excess of 1 ½ pay is eligible for a credit.

Complying with FLSA Regulations using Time and Attendance Software

Proper compliance with the FLSA regulations requires an understanding of the laws and regulations. However, you must also calculate and compute the regular and overtime rates, and handle credits properly. Unless you do so, you mightack wages and/or penalties.

EmpCenter Time & Attendance can handle virtually everhandle virtually every aspect of compliance with the Fair Labor Standards Act, including:

  • Segregating exempt and non-exempt employees – EmpCenter makes it easy to arrange employees into policy groups based on exempt/non-exempt and/or other essential criteria
  • Cnt regular rate – Our time and attendance solution lets you determine exactly wdetermine exactly what types of pay are to be included in the regular rate, entirely through configuration.
  • Accurately calculate overtime for all employees – Regardless of an employee’s pay frequency, EmpCenter automatically applies overtime pay rules according to the FLSA.
  • Apply piece rate formulas – EmpCenter automatically calculates pay according to piece rate formulas, and account for piece rates when applying FLSA pay rules.
  • Designate credits for overtime and premium pay – Easily designate any pay type or portions of pay as a credit to FLSA requirements

EmpCenter also fully automates compliance for state labor laws, and provides detailed audit trail reporting, solely through configuration.

Fair Labor Standards Act References

The first place to look for more information is the Fair Labor Standards Act Handy Reference Guide, provided by the Department of Labor.

We also suggest you check out the Department of Labor’s E-law bulletin on the FLSA which walks you through your specific situation to see how you are affected by the FLSA.

Additional Resources:

Notice: The information above and the references are provided “as-is” without any representation as to their accuracy or applicability to your specific situation. We recommend that you seek competent legal advice for all employment issues.