Does the Fair Labor and Standards Act Apply to My Business?


The Fair Labor and Standards Act (FLSA) applies to the vast majority of businesses. While some enterprises—particularly small ones—may be exempt from the FLSA, this is the exception rather than the rule.

What is the FLSA?

The FLSA covers various areas of employment law, such as:

  • Minimum wage
  • Overtime pay
  • Hours worked
  • Child labor
  • Recordkeeping for employee time and pay

The goal is to make sure employees are treated fairly, which generally means the law is applied as broadly as possible. While some exceptions may come into play in specific circumstances—such as dropping overtime pay requirements for certain employees—the vast majority of employees are covered.

Employers Covered by the FLSA

There are two ways in which the FLSA may apply to a business. One is through the qualifications of employers themselves. If your business has $500,000 or more in gross annual revenues, they are covered by FLSA. While there are a few exceptions, such as for small farms, if you gross more than $500,000 per year, then you are obligated to fulfill the law’s requirements.

In addition, some employers are explicitly covered by the FLSA, including:

  • Employers of domestic service workers
  • Government entities
  • Institutions that care for the elderly, ill, or disabled
  • Hospitals and other medical care facilities
  • Schools
  • Universities or other institutions of higher learning

Employees Covered by the FLSA

If your business doesn’t fall under the categories listed above, or if it grosses less than $500,000 annually, you may still be covered by the FLSA if your employees are involved in any form of interstate commerce. Exactly what “interstate commerce” means under the FLSA is defined very broadly, given the law’s intent to protect as many employees as possible.

While some obvious situations definitely apply, such as transporting goods across state lines or producing goods that will be sold out of state, the law also covers scenarios that are less obvious. These include workers who might procure materials from other states for their work or even receive out-of-state calls. There are some limits on what constitutes “interstate commerce,” but those limits are by far exceptions to the rule.

If your business employs anyone who is involved in any form of interstate commerce, then you are liable for satisfying minimum wage requirements and other rules under the FLSA for those employees. That said, there are some exemptions that apply to specific types of employees, such as:

  • Computer professionals
  • Certain drivers
  • Farm workers
  • Commissioned salesmen
  • Seasonal employees
  • Executives
  • Professionals
  • Administrative employees

These employees are often exempt only from certain requirements, such as overtime pay.

Ensuring Compliance with the FLSA

The FLSA is a complex piece of legislation, and the way it applies to your business specifically depends on the kinds of employees you have on board, how they’re paid, and so forth. In addition, it’s worth noting that even if the FLSA doesn’t apply in a certain scenario, state laws may still do so, so keep that in mind.

To ensure full compliance with this law and other regulations, you’ll generally need an attorney, especially in more complex situations. Hard David Carson LLP can help you keep your business in full compliance with employment laws.

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