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Fair Labor Standards Act (FLSA)

Reference Number: MTAS-488
Reviewed Date: 09/11/2023

The Fair Labor Standards Act of 1938 (FLSA, herein referred to as “the act”), known primarily as the minimum wage and overtime law, was passed during a period when our nation was experiencing an economic recovery from the Great Depression. Administered by the U.S. Department of Labor’s (DOL) Wage and Hour Division, the act was designed to encourage employers to hire more employees in lieu of scheduling overtime and to prevent unfair competition by requiring all employers to pay a minimum wage and overtime for all work in excess of 40 hours per work week. By requiring overtime pay, the act created a monetary penalty for employers who did not spread their existing work among a greater number of employees. The act, in essence, provided an incentive to hire more people rather than increase the hours worked by existing employees.

The act did not cover government employees until a series of amendments (1966 and 1974) and court challenges extended coverage to state and government employees. Maryland v. Wirtz, 392 U.S. 183 (1968); Employees of the Department of Public Health and Welfare v. Missouri, 411 U.S. 279 (1973); National League of Cities v. Usery, 426 U.S. 833 (1976); and Garcia v. San Antonio Metropolitan Transit Authority, 469 U.S. 528 (1985); overruling recognized by Payne v. Tennessee, 501 U.S. 808, 111 S.Ct. 2597, 115 L.Ed.2d 720, 59 USLW 4814 (U.S.Tenn. Jun 27, 1991). Even so, application of all the provisions of the act to governments was further delayed until August 1992. This delay was due to issues of the salary basis test for public employers and exempt employees’ pay for partial-day absences (public accountability).

The FLSA contains minimum wage, overtime pay, and record keeping requirements and restricts child labor. These provisions apply to all state and local government employees except certain workers excluded from the FLSA definition of “employee” and employees who may qualify for exemption from the requirements of the act. The act establishes a definition of “hours worked” and provides the conditions under which overtime pay is due. It also provides a partial overtime exemption for certain categories of employees.

Though the act addresses many issues surrounding wages, it does not require:

  • Extra pay for Saturday, Sunday, or holidays;
  • Pay for vacations or holidays, or severance pay;
  • Discharge notices;
  • Limits on the number of hours of work for employees 16 years of age or over, as long as overtime pay provisions are met; or
  • Time off for holidays or vacations. (If employees work on holidays, they need not be paid at time and one-half or any other premium rate.)

The act can be enforced by private employee lawsuits or by action of the Department of Labor. If the DOL is involved, special investigative procedures are used. The Wage and Hour Division of DOL is responsible for implementing regulations under the FLSA and enforcing compliance with the act. Should the employer lose a case in court, the employee generally collects back pay and liquidated damages. There is a two-year statute of limitation under the act, extending to three years if a violation is willful. Attorney fees, too, generally are recoverable.