Wage and Hour Q&A

by | Jun 7, 2024 | Wage and Hour

  1. Am I covered by the federal Fair Labor Standards Act  (FLSA)?

The FLSA covers employees only. It does not cover independent contractors. The term “employ” is defined by the FLSA as “to suffer or permit work”.This definition is broad because of the remedial purposes of the Act. To assess if someone qualifies as an employee, courts use the “economic realities test,” considering the following factors: (1). how essential the work being done is to the employer’s business, (2). the worker’s ability to make a profit or incur a loss based on their skills, (3) the level of investment made by both the employer and the worker, (4). the required skill and independent initiative needed for the job, (5). the duration of the working relationship, and (6) the amount of control the employer has over the worker. Additionally, for an employee to be protected under the federal Fair Labor Standards Acts, they must substantially satisfy either the “enterprise coverage” or “individual coverage” criteria- please contact us for more details.

  1. What are the general requirements for the FLSA, state wage and hour laws?

The main requirements under the FLSA and state wage and hour laws include the payment of minimum wage and overtime. The FLSA currently sets the minimum wage at $7.25 per hour, calculated on a net basis. Employees who work more than 40 hours in a workweek are typically eligible for overtime pay for hours worked beyond 40, unless they qualify for an exemption- please call us for more details. Many states have established a higher minimum wage than the FLSA, and in such cases, employees are entitled to the higher wage. Additionally, many states have their own overtime laws. For instance, in some states, the workweek for overtime calculations exceeds 40 hours. In Minnesota, employees are only entitled to overtime pay under state law for hours worked over 48 in a workweek. We welcome your questions on this as circumstances may vary.

  1. What does being paid “on a salary basis” mean?

Generally, an employee is considered to be on a salary basis if they consistently receive a fixed amount as part or all of their compensation, which does not decrease based on the quality or quantity of their work, This impacts whether or not overtime is paid. We have had clients who have worked 80 or even more hours per week and not been entitled to overtime pay because they have been paid regular salary and been in some form of managerial role. Each situation varies, so be sure to ask an employment law attorney about whether you are appropriately salaried (with the benefits and limitations provided by law) if you have any doubt.