Fair Labor Standards ActFLSA
The Fair Labor Standards Act (FLSA) is the foundational United States wage-and-hour law, first passed in 1938 and administered by the US Department of Labor. It establishes the federal minimum wage, requires overtime pay of at least one and a half times the regular rate for hours worked beyond 40 in a workweek, mandates pay record-keeping, and restricts the employment of minors.
The FLSA’s most consequential distinction for hiring is between exempt and non-exempt employees. Non-exempt employees are entitled to overtime; exempt employees — typically salaried workers meeting specific duties and salary-threshold tests, such as many executive, administrative, and professional roles — are not. Classifying a worker incorrectly is a common and costly compliance error, exposing employers to back-pay and penalties. States may set higher minimum wages or stricter overtime rules than the federal floor.
The FLSA is US-specific and does not govern employment in India. India’s equivalent framework is spread across statutes such as the Code on Wages and state Shops and Establishments Acts, which set minimum wages, working-hours limits, and overtime entitlements, alongside the historical distinction between workmen and non-workmen. A GCC employing staff in India follows these Indian wage-and-hour rules rather than the FLSA, though a US parent may still apply FLSA classifications to its own domestic workforce.
Frequently asked questions
What is the Fair Labor Standards Act?
The Fair Labor Standards Act (FLSA) is the US federal law that sets the minimum wage, overtime pay rules, record-keeping requirements, and child-labour standards. It also defines which employees are exempt from overtime and which are non-exempt.
What is the difference between exempt and non-exempt employees under the FLSA?
Under the FLSA, non-exempt employees must be paid overtime of at least time-and-a-half for hours worked beyond 40 in a week, while exempt employees are not entitled to overtime. Exempt status generally requires a salaried role meeting specific duties and salary-threshold tests.
Does the FLSA apply in India?
No. The FLSA is US-specific. Wage and working-hour rules in India come from statutes such as the Code on Wages and state Shops and Establishments Acts, which set minimum wages, hours, and overtime independently of the FLSA.
What overtime does the FLSA require?
The FLSA requires that non-exempt employees be paid at least one and a half times their regular rate for hours worked beyond 40 in a workweek. States may impose stricter overtime rules, and employers must follow whichever standard is more generous to the employee.