Human Resource Blog

FLSA in North Carolina

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How does the Fair Labor Standards Act impact what hiring and employee decisions I can make in my North Carolina company?

The Fair Labor Standards Act (FLSA) is a federal Act that applies to companies in states across the U.S., not just in North Carolina. Your company, if it is covered, is prohibited under the Act from making certain employee payment decisions that are considered to be unfair. Essential, the Act is in place in order to establish the federal minimum wage. Each state is allowed to set its own minimum wage as well, as long as that minimum wage is greater or equal to the federal minimum wage.

In addition to establishing the federal minimum wage, the FLSA also establishes overtime pay, record-keeping and child labor standards for non-exempt employees and employers across all employment sectors, including public and private sectors.

The Act applies only to those businesses that are covered, and includes the following coverage requirements:

• A business has to have at least two employees.
• The business must be engaged in some sort of interstate commerce, produce goods for interstate commerce, or handle, sell or work on goods for interstate commerce.
• The business must also do at least $500,000 worth of business eah year, unless that business is a hospital or a business that is set up to provide medical or nursing care for residents, a school, a preschool or a government agency.

Businesses may also get individual coverage if they have non-exempt employees in a firm that does not meet the $500,000 annual income test but who are individual engaged in interstate commerce of the production of goods for commerce on a weekly basis.

For example, if you have an employee that produces goods in your company and if those goods will get sent out of state, then your employee is engaged in interstate commerce.  

For those non-exempt employees, the payments that are not part of the regular rate of pay include any bonuses, reimbursement for expenses, and overtime work. CB