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FLSA Coverage

I see most answers to your questions talk about companies that make more then $500,00 a year. Our small company makes around $375,000 a year and has 6 employees. So where is our business governed by, what labor laws?

The federal Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in Federal, State, and local governments.

There are two ways in which employees can be covered under the FLSA; enterprise coverage or individual coverage.

Enterprise coverage includes organizations that have at least two employees and annual sales of at least $500,000. The company’s total sales between all locations are considered towards the annual volume.

In the absence of enterprise coverage, employees are covered under the FLSA if their work regularly involves them in interstate commerce. The FLSA covers individual workers who are engaged in commerce or in the production of goods for commerce.

Keep in mind, “interstate commerce” is to be interpreted broadly. Employees who take payments from customers who are out-of-state, or employees who process payments that come from out of state banks or credit card issuers are considered to be engaged in interstate commerce. The DOL provides the following examples of employees who are involved in interstate commerce as those who: produce goods (such as a worker assembling components in a factory or a secretary typing letters in an office) that will be sent out of state, regularly make telephone calls to persons located in other States, handle records of interstate transactions, travel to other States on their jobs, and do janitorial work in buildings where goods are produced for shipment outside the State.

If neither enterprise nor individual coverage applies then the employees are not covered under the FLSA.

Just to note, most laws under the Equal Employment Opportunity Commission (EEOC) employers with 15 or more employees. Such laws include the Americans with Disabilities Act (ADA), Pregnancy Discrimination Act (PDA), Title VII of the Civil Rights Act, and Age Discrimination in Employment Act (ADEA).

Even if federal laws are not applicable, remember that many states have adopted their own employment laws. Thus, it’s important to know if your state has such legislation and the criteria for coverage under such.

This entry was posted on Wednesday, September 30th, 2015 at 7:22 pm and is filed under
Labor Laws.
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