National Fair Labor Standards Act

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The Fair Labor Standards Act of 1938, also referred to as the fair wage and hours law, regulates child labor, equal pay, overtime, record keeping and wages for employees of companies who do business in the United States. The act is enforced by the U.S. Department of Labor's Wage and Hour Division, and compliance is mandatory in all 50 states, although states can modify the regulations if those modifications increase benefits to employees.

Minimum Wage

The Fair Labor Standards Act (FLSA) sets the national minimum wage. As of 2010, the national minimum wage was $7.25 per hour. States are allowed to set their own minimum wage, either matching the national wage or creating a higher one. For example, California's minimum hourly wage is $8, Texas' minimum is the same as the national wage and Washington state set its minimum wage at $8.55 per hour.

Read More: What is the Federal Minimum Wage?


The Fair Labor Standards Act requires employers to compensate their hourly employees with overtime pay when they work more than 40 hours a week. The employer must pay one and a half times an employee's hourly rate for any hours she works over 40 hours in a work week. States can modify this regulation, provided it adds benefits to the employees.

Equal Pay

The Equal Pay Act of 1963 is an amendment to the FLSA. The act states that employers must pay all employees equally for equal work.

Child Labor

The Fair Labor Standards Act regulates child labor laws, which were part of the original act of 1938 and amended in 2010. The laws set the age at which a child can be employed, in what industries children can and cannot work and the maximum number of hours a child can work. For example, a 14-year-old can work as a barrista in a coffehouse or work in a delicatessen but is prohibited from using pizza dough rollers and food mixers; 15-year-olds can be lifeguards and swim instructors at public pools and amusement parks but not at elevated water parks or open waterways.

Exempt and Non-Exempt

Employers must declare their employees as either exempt or non-exempt workers. Exempt workers, also referred to as salaried workers, must be paid an annual salary and earn a minimum of $455 a week, according to the Fair Labor Standards Act. Non-exempt employees, also called hourly employees, must make at least the national minimum wage and be paid overtime on any hours that exceed 40 hours a week.

Independent Contractors

According to the FLSA, a person is an independent contractor if he works for more than one company in the same field, is paid on a project basis instead of hourly, is not required to adhere to company attendance policy or hours of operation and provides his own equipment. Companies sometimes will classify employees as independent contractors so they are not obligated to provide benefits but still require these workers to adhere to employee policy and procedures. Companies are prohibited from classifying employees as independent contractors if they do not meet the listed requirements.

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