Wage and Hour Laws: Overview of the Fair Labor Standards Act

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  • 0:03 FLSA Defined
  • 1:09 Minimum Wage
  • 2:23 Overtime
  • 3:02 Child Labor
  • 4:48 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley

Shawn has a masters of public administration, JD, and a BA in political science.

Most people work for others to make a living by trading their labor for a wage and other benefits. In this lesson, you'll learn about the Fair Labor Standards Act and the minimum standards it sets for certain labor practices.

FLSA Defined

Beth just turned sixteen and wants to join the workforce so she can make her own money to buy things her parents won't buy for her. While she was shopping at the local mall, much to her delight, she sees that her favorite clothing store has a sales associate position available. She rushes in and applies for the job. After applying, she goes home where she tells her mother, Mary, who works as a human resource manager, about the job.

Beth's mother sits her down and tells her that now that she's looking to enter the workforce, she should know about rights and protections afforded to workers under the Fair Labor Standards Act (FLSA), which is enforced by the Wage and Hour Division of the U.S. Department of Labor. According to the U.S. Department of Labor, the 'FLSA establishes minimum wage, overtime pay, record keeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments.' Being a typical teenager, Beth is already bored, but her mother tells her the information is important and that she needs to pay attention.

Minimum Wage

Mary explains that the FLSA requires covered employers to pay employees a minimum wage per hour of employment. As of February 2014, the federal minimum is $7.25 per hour. Mary tells Beth that she is lucky because the minimum wage in her state is higher than the $7.25 federal minimum wage, so Beth will get the higher minimum wage.

The minimum wage applies to most employees but some are exempt employees, such as executives, administrators and professionals on salaries. Another big exception is tipped employees, like waiters and waitresses. The law allows employers to treat the tips as part of an employee's wage. However, the employer still has to pay at least $2.13 per hour in wages. If the employee doesn't make at least minimum wage between the tips and the $2.13 wage, then the employer must pay the employee the difference so that the minimum wage is paid. Finally, employers can pay a reduced wage of $4.25 to employees under the age of 20 during the first 90 calendar days of employment.


Mary also tells Beth about overtime. The FLSA requires that all covered employees must be paid overtime pay for all the time they work over 40 hours in any pay period. Mary tells her daughter that work hours include all the time Beth will be required to be on the job at her work location or at any other location required by her employer, such as a training facility. Overtime pay must be at least one and a half times the employee's regular pay rate. For example, if Beth gets paid $10.00 per hour, her overtime pay rate must be at least $15.00 per hour.

Child Labor

Beth's little brother John walks in after overhearing about all the money Beth will make and excitedly announces that he wants a job too. But John is only 13, and Mary explains the law also provides special protections for youths. With limited exceptions, such as some agricultural work, children under the age of 14 are not generally permitted to work.

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