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Wage and Hour Laws

Many people throughout the world work in horrible conditions for extremely low pay. In America, the U.S. Department of Labor (DOL) enforces labor laws protecting workers' rights to fair pay and reasonable work hours. The Wage and Hour Division ensures equitable enforcement of these laws nationwide.

Each state has its own wage and hour laws. Many states also make provisions for how many hours someone can work per day. States also set different overtime pay, weekend pay, and recordkeeping rules. The articles below explain general federal and state wage and hour laws.

Federal Minimum Wage Laws

The Fair Labor Standards Act (FLSA) establishes the baseline for minimum wages across the country. States may set higher standards than the federal law provides, and many have. Employees must receive at least the federal minimum wage of $7.25 per hour. If the state minimum wage is lower than the federal wage, employers must pay their workers the federal wage. If the state minimum wage exceeds the federal rate, workers receive the higher pay scale.

The FLSA also sets federal standards for overtime pay, the allowable number of hours per week, and employee classification for tax purposes. Fringe benefits, such as health insurance or pension plans, are not part of an employee's wages.

Exempt vs. Non-Exempt Employees

The FLSA only applies to workers receiving an hourly wage. These workers are "non-exempt" from FLSA requirements. They receive FLSA protections about meal periods and rest breaks, payment of wages, and other employee benefits.

Other employees are "exempt" employees. The FLSA does not apply to workers who receive salaries, are in executive or administrative positions, or are highly compensated for their duties. Independent contractors, agricultural workers, and rail workers also do not fall under the FLSA. They have other protections under federal law.

The FLSA maintains strict guidelines for child labor. Minors have a shorter workweek and limited hours. They may not be hired for hazardous occupations.

Tipped Employees Under the FLSA

Employees receiving more than $30 in monthly tips are subject to different rules under the FLSA. Employers must pay these employees at the minimum hourly rate, but employers can factor tips into their pay in most states. A "tip credit" permits employers to pay workers a lower base pay, as long as the pay and tips total the federal minimum.

Some states, such as California, have abolished the "tip credit." Employers must pay employees the prevailing wage and allow them to keep 100% of their tips. Employers can require "tip pooling," where all workers put their tips into a general pot and share them with other workers, such as barbacks, at the end of the shift.

State Wage and Hour Laws

States have their own employment laws and may set their own minimum wage. The department of labor in each state oversees that state's laws on payday requirements, hours of work, and other regulations.

Each state regulates workers' compensation insurance. All states except Texas require employers to carry workers' compensation. Each state has different methods for reporting and payment. Under the Affordable Care Act (ACA), employers must offer health insurance coverage through a state health care provider.

Most states have established regular pay periods for employee's wages. In general, payday laws require paydays at least twice a month or every other week. Some states require weekly or monthly payments. A few, such as Michigan, have complex rules that depend on the employee's job.

Wage and Hour Claims

Whether an employee has an individual or collective bargaining agreement, they deserve the wage rate guaranteed by state or federal law. If workers believe they have not received the correct pay, they can file a wage claim with either the state or federal Wage and Hour Division of the Department of Labor. This agency may have different names in each state. For instance, in California, it is the Department of Industrial Relations. These agencies determine claim validity and workers' eligibility to file actions against their employers.

Learn About Wage and Hour Laws

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