While there are many different aspects of HR, an integral part of working in the Human Resources space is understanding and complying with the federal Fair Labor Standards Act (FLSA).  

On August 30, 2023, the US Department of Labor (DOL) finally released their long-awaited proposal for updating the FLSA. This includes increasing the minimum salary that an exempt employee must earn to avoid overtime eligibility to nearly $55,000 per year. There are many other key aspects of the DOL’s proposal, so stay tuned to MP as we will be offering content in a variety of formats as this story unfolds. 

Before we address any potential changes, it is important to make sure that we have a solid understanding of the Act as it currently stands. As such, this article will cover the following: 

• What is the FLSA?  
• Who does it pertain to?  
• Who is it enforced by? 

The FLSA in a Nutshell 

Enacted by the United States congress in 1938, the primary goal of the FLSA is to protect the rights of workers by establishing certain basic labor standards including minimum wage, overtime pay, and child labor regulation.  

Unless otherwise exempt, the FLSA ensures that employees are paid time and a half whenever working more than 40 hours in a work week. The FLSA also dictates strict recordkeeping requirements to track hours worked and wages paid.  

Who Enforces the FLSA? 

The FLSA is enforced by the US Department of Labor Wage and Hour Division (WHD) of the US Department of Labor. The WHD’s mission is to “promote and achieve compliance with federal labor standards to protect and enhance the welfare of the nation’s workforce.”¹ 

The FLSA does not require employers to provide: 

• Time off for holidays 
• Vacations or sick leave 
• Meal periods or rest breaks 

• Premium pay for weekend or holiday work 
• Notice prior to termination or layoff  
• Pay raises or fringe benefits.  

While the FLSA does not require employers to provide the above-listed items, state and local laws may have additional requirements on these matters. It’s crucial that employers must comply with federal as well as applicable state and local labor laws to ensure they’re meeting all relevant obligations related to employee compensation and benefits.  

What about Worker Protection?  

Worker Protection, and the Benefits of Complying with Labor Laws 

We all talk about Worker Protection, but what exactly does it mean?   

Worker protection helps to prevent workers from exploitation, discrimination, and harassment, at the same time promoting their well-being and dignity in the workplace.   

Labor laws are designed to protect the rights and interests of employees, and employer compliance ensures that workers receive fair wages, overtime pay, benefits, and safe working conditions.  

Complying with labor laws provides:  

• Worker protection 
• Legal compliance 
• Preventing reputational damage 
• Employee satisfaction and retention 
• Fair competition and business stability 

While legal compliance is essential, it’s important to remember that failure to comply with legal labor laws can lead to severe legal consequences, including fines and other penalties.  

In fact, 

• Willful violations of the FLSA may result in criminal prosecution, and the violator fined up to $10,000. 
• A second conviction may result in imprisonment. 
• Willful or repeated violations are subject to a penalty of up to $1,000 for each violation. 

• What’s more, those in violation of child labor law provisions are subject to a penalty of up to $10,000 for each violation. 

Now that we’ve defined Worker Protection, and noted what could happen when a company is not in compliance, let’s talk about Overtime regulations.

The FLSA and Overtime Regulations 

Falling under the umbrella of Worker Protection, Overtime regulations:  

• Protect workers’ rights 
• Promote fair labor practices 
• Provide appropriate compensation for employees who work beyond regular working hours.  

Overtime regulations are a critical component of labor laws that seek to balance the interests of employers and employees, promote fair wages, and safeguard the well-being of the workforce by providing a framework for fair compensation or reasonable working hours. In fact, overtime regulations contribute to a more equitable and sustainable labor market.  

Whenever an employer is deciding to pay an employee on a salary basis without overtime eligibility and without tracking their hours, it is crucial that the company is confident that the employee is exempt by the definitions set forth within the FLSA. This includes the nature of their job duties as well as their compensation (both amount and format). Please speak with us if you are interested in reviewing your employee classifications. 

When it Comes to Complying with Overtime Regulations, Let Common Sense Prevail  

By adhering to Overtime regulations, employers can avoid costly legal battles and reputational damage. Labor violations can wreak havoc by severely damaging a company’s reputation and brand image. What’s more, negative publicity related to worker mistreatment can lead to public backlash, customer boycotts, and the loss of trust among stakeholders—leading to catastrophic results.  

On the other hand, a company that has a reputation for fair treatment of its employees and meets labor law compliance can attract employees and customers, stimulate employee satisfaction, boost morale, and offer a positive work environment. 

Satisfied employees are more likely to remain loyal to the company. In return, this loyalty reduces turnover, thereby reducing recruitment costs in the long run.  

Moreover, when companies adhere to FLSA labor standards, it is very difficult for unethical employers to gain a competitive advantage by cutting corners at the expense of workers.  

In the end, a stable business environment stimulates fair competition, and compliance with labor laws creates a level playing field for businesses across industries, promoting long-term business sustainability and economic growth.  

It’s important to remember that overall compliance with labor laws is not just a legal obligation—it’s a fundamental ethical responsibility. By prioritizing compliance, employers are also making a positive impact on the organization.  

While we have focused on the FLSA and Overtime regulations in this blog post, there are other factors for employers to consider regarding compliance with federal labor laws. These factors include long-term sustainability, social responsibility, and attracting talent (to name but a few), which we’ll be focusing on in upcoming posts. 

To find out more about how to ensure compliance with FLSA regulations, read our upcoming blog post about the FLSA and White-Collar Exemptions (exemptions from overtime rules for certain workers). 

Questions? Comments? Contact us today!  

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