The Fair Labor Standards Act (FLSA) requires the following of businesses:

• Payment of at least the federal minimum wage to non-exempt employees
  • Covered, nonexempt workers are entitled to a minimum wage of $7.25 per hour effective July 24, 2009.
• Overtime pay of at least one-and-one-half-times the regular pay rate
• Restrictions on working hours for children under 16
• Restrictions on dangerous work for children under 18
• Specific safety and wage protections for migrant and seasonal agricultural workers under the Migrant and Seasonal Agricultural Worker Protection Act (MSPA).
• Enforcement of the labor standards provisions of the Immigration and Nationality Act (INA), which applies to non-U.S. citizens authorized to work in the U.S. under certain nonimmigrant visa programs (H-1B, H-1B1, H-1C, H2A)

Businesses typically violate wage and hour laws in two areas:

Improper payment for hours worked

Claims brought in the hours worked category refer to an employer’s failure to pay for all hours worked. This could happen, for example, if an employer asked their employee to work during their lunch break, or beyond their scheduled hours without overtime pay.

Incorrect exemptions

Making an employee exempt might seems like an attractive time and money-saving option as they do not require tracking for hours worked or overtime pay. However, not every role meets the requirements for this categorization. To qualify for exemption, an employee must:

• Be paid a set salary of at least $455/week
• Be performing executive, professional, or administrative duties, or be designated as computer professionals or outside sales associates
• Not be performing non-exempt duties for more than half their working hours.

Failure to comply with the FLSA can result in employers being forced to provide up to 3 years of back-pay for employees seeking recovered wages. Additionally, businesses accused of being in violation are often audited completely. These audits often lead to expensive class action suits, which could mean a loss of hundreds of thousands for your business if you’re found to be in violation.