Overtime Laws: Fair Labor Standards Act (FLSA)

Last updated on: March 26, 2015

Overtime Laws: Fair Labor Standards Act (FLSA)

The Fair Labor Standards Act (FLSA) governs aspects of employment relationships in the United States. One of its primary concerns is overtime pay, although it covers many other issues as well. The FLSA applies throughout the United States, and it prevails over state law wherever there is a direct conflict between them.

FLSA Coverage

Two types of workers are excluded from the FLSA’s overtime requirements: independent contractors and exempt employees. Whether a worker is an employee or an independent contractor is based on many factors and can be ambiguous under certain circumstances.

One basic principle, however, unites all of these factors: the more independence a worker has from the party who hired him, the more likely he is to be considered an independent contractor. A classic example of an independent contractor would be a self-employed plumber who comes to fix your drain pipe. Even if the worker is classified as an employee, however, several types of employees are exempt from overtime pay requirements. Such parties are white-collar employees such as: executives, administrators, professionals, outside salespersons, some computer industry employees and certain public servants. Except for outside salespersons, they must be salaried and they must earn at least $455 per week.

Examples of exempt workers typically include:

  • Casual babysitters (independent contractors)
  • Door-to-door salespersons (exempt employees)
  • Corporate CEOs (exempt employees)
  • Taxi drivers (independent contractors)
  • Lawyers (exempt employees or independent contractors)

Calculation of Overtime Pay

Absent complicating factors, overtime pay equals the overtime pay rate times the number of overtime hours worked. The overtime rate is 150 percent of the hourly pay rate (for hourly employees) or the weekly salary divided by 40 (for salaried employees).  The number of overtime hours worked is the total number of hours worked in a week minus the standard 40-hour workweek. The calculation method can get more complex in certain situations, such as when an employee’s salary is meant to compensate the employee for a workweek other than 40 hours.

Employer Recordkeeping Requirements

The FLSA requires employers to retain certain records concerning their employees for the purpose of enforcement of FLSA provisions (including both overtime pay and other provisions such as minimum wage requirements). These records include (but are not limited to):

  • Basic information such as name, address, birth date and gender;
  • Employment-related information such as position, workweek, hours worked, basis of remuneration (hourly or salaried, for example), and
  • Pay-related information such as pay rate, overtime hours, overtime pay, payroll deductions and payment dates.

These records must be made available to the Wage and Hour Division of the U.S. Labor Department upon request.


Employers who violate the FLSA can face both civil and criminal sanctions. These penalties include payment of back wages, liquidated damages up to the amount of back wages owed, a fine of up to $10,000 or $1,100 per violation, court injunctions and even imprisonment. The most serious penalties are reserved for intentional and repeated violations of the FLSA.

To Learn More, Call Zinda Law Group Today

If you are involved in an employment dispute involving the FLSA, or if you simply want to learn how to comply with the law in order to avoid legal risk, you need an experienced and savvy employment lawyer. Zinda Law Group has been approved by the Better Business Bureau® and includes attorneys with years of experience in employment law matters. We stand ready to advise you and, should it become necessary, zealously represent your interests in court. Zinda Law Group serves the Austin area, and we welcome you to contact us at 800-863-5312 to schedule a free consultation.