The Fair Labor Standards Act applies to “employees who are engaged in interstate commerce or in the production of goods for commerce, or who are employed by an enterprise engaged in commerce or in the production of goods for commerce” unless the employer can claim an exemption from coverage. Generally, an employer with at least $500,000 of business or gross sales in a year satisfies the commerce requirements of the FLSA, and therefore that employer’s workers are subject to the FLSA’s protections if no other exemption applies. Several exemptions exist that relieve an employer from having to meet the statutory minimum wage, overtime, and record-keeping requirements. The largest exceptions apply to the so-called “white collar” exemptions that are applicable to professional, administrative and executive employees. Exemptions are narrowly construed, as an employer must prove that the employees fit “plainly and unmistakeably” within the exemption’s terms.
The Fair Labor Standards Act applies to “any individual employed by an employer” but not to independent contractors or volunteers because they are not considered “employees” under the FLSA. Still, an employer cannot simply exempt workers from the FLSA by calling them independent contractors, and many employers have illegally misclassified their workers as independent contractors. Some employers similarly mislabel employees as volunteers. Courts look at the “economic reality” of the relationship between the putative employer and the worker to determine whether the worker is an independent contractor. Courts use a similar test to determine whether a worker was concurrently employed by more than one person or entity; commonly referred to as “joint employers.” For example, a farm worker may be considered jointly employed by a labor contractor (who is in charge of recruitment, transportation, payroll, and keeping track of hours) and a grower (who generally monitors the quality of the work performed, determines where to place workers, controls the volume of work available, has quality control requirements, and has the power to fire, discipline, or provide work instructions to workers).
In many instances, employers do not pay overtime properly for non-exempt jobs, such as not paying an employee for travel time between job sites, activities before or after their shifts, and activities to prepare for work but are central to work activities. If an employee is entitled to overtime, the employer must pay them one and a half times their “regular rate of pay” for all hours they work over 40 in the same work week.
Employees employed in a ministerial role by a religiously affiliated employer are not entitled to overtime under the act.