FLSA stands for Fair Labor Standards Act. FLSA was established to protect the rights of American workers from unfair employment practices. It establishes a minimum wage, overtime pay, recordkeeping and child labor standards for full-time and part-time workers in the private sector and government (federal, state and local).
Why It Matters
FLSA is one of the most important laws for employers to understand because it outlines a wide range of regulations for dealing with employees. Employers must maintain compliance with applicable employment laws to avoid civil or criminal violations. FLSA compliance requires employers to provide accurate and timely pay for their employees. It also requires employers to retain appropriate records that could have an effect on the interests of their employees.
One of the most common FLSA violations is employee misclassification. Employees under the FLSA are categorized as either “exempt” or “nonexempt.” Nonexempt employees are afforded the protections of FLSA such as overtime pay and minimum wage. Exempt employees are only guaranteed a base salary under FLSA. Employee misclassification is a costly mistake for businesses that can lead to legal and financial consequences.
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