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What Should Business Owners Know About the Fair Labor Standards Act (FLSA)?

As an employer, you likely have your own hiring guidelines and practices in place. However, you must also follow labor laws. The Fair Labor Standards Act (FLSA) is legislation in place to protect employees and provide employers with basic requirements they must follow.

What is the FLSA?

The FLSA was put into place to establish minimum wage and overtime, provide for how records are to be kept, and put in place youth labor standards. The FLSA is federal legislation, but states may also have legislation in place that governs employment. Employers should use the FLSA as their guide for matters concerning employees, wages, contractors, and recordkeeping. The FLSA website offers resources to assist businesses with employment issues.

Who is Covered by the FLSA?

FLSA applies to many enterprises in the United States. To be covered by FLSA, an enterprise must employ workers who engage in interstate commerce, make goods for interstate commerce, or handle or work on goods that have been made for interstate commerce. Also, the business must have a gross income of at least $500,000, operate a hospital, institution, or school, or is an activity of a public agency. Employees of some enterprises who are not covered by FLSA may still need to comply with the minimum wage, reporting, and youth work restrictions.

Minimum Wage

The FLSA establishes the minimum wage for covered, non-exempt employees, which is currently $7.25 per hour. Currently, Wisconsin’s minimum wage is also set at $7.25 per hour. However, employees should check regularly to know when the minimum wage increases. Deductions that would bring the minimum wage lower than $7.25 are not allowed. For tipped employees, employers must pay at least $2.13 per hour in wages. A tipped employee’s wages must total $7.25 or more when combining wages and tips.


Under the FLSA, employees must be paid overtime wages when they work more than 40 hours in a workweek. A workweek is any period of seven consecutive days or a regularly recurring period of 168 hours. Overtime pay rate must not be less than time plus half the employee’s regular hourly rate. An employer is not required to pay overtime on weekends or holidays unless it is an actual overtime day of work. There is no limit to the number of hours an employee over the age of 16 can work in a week.

Additional Information

Employers are required to hang a poster that outlines the FLSA laws in an employee area. Employers must keep records of employee time worked and wages paid. Employers should review the details to determine whether their contracted workers are covered by the FLSA. There are many special circumstances that apply to various business situations. It is best to review the complete documentation to ensure that you follow the law properly.

An experienced employment law attorney will assist you with the application of the FLSA for your business. Contact us at (608) 784-8310 or online to request a consultation.

Published June 12, 2023
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