FLSA Compliance Guide 2026: Wage and Hour Rules for HR
The Department of Labor’s Wage and Hour Division recovered more than $259 million in back wages for nearly 177,000 employees in fiscal year 2025, the most since 2019. The lion’s share – more than $184 million – involved violations of the Fair Labor Standards Act (FLSA).
Federal wage-and-hour policy changed this year, too, affecting exemption rules, worker classification and employers’ options for addressing potential violations.
The DOL restored regulations setting the salary threshold at $684 per week for most employees claimed as exempt under the executive, administrative and professional exemptions, provided they also satisfy the salary-basis and duties tests.
The agency also proposed a revised test for determining whether a worker is an employee or independent contractor under the FLSA.
The DOL relaunched its Payroll Audit Independent Determination (PAID) program, which gives eligible employers a self-audit option for identifying and resolving potential minimum wage and overtime violations.
Here’s where each federal rule stands for 2026, along with the DOL investigations and court cases that show how employers get caught making expensive wage and hour mistakes.
FLSA Wage and Hour Rules at a Glance (2026)
Use these figures as the baseline for 2026 payroll settings, then check each state where employees work. State and local laws can set higher minimum wages, require daily overtime or impose other wage-and-hour requirements that exceed federal standards.
| Pay rates | 2026 federal requirement |
|---|---|
| Minimum wage | $7.25 an hour. |
| Tipped cash wage | $2.13 an hour, if the employer lawfully takes a tip credit and the employee customarily and regularly receives more than $30 a month in tips. The employer must make up any shortfall to the applicable minimum wage. |
| Maximum tip credit | $5.12 an hour. |
| Overtime pay | At least 1.5 times the employee’s regular rate of pay for hours worked over 40 in a workweek for covered, nonexempt employees. |
| Exempt status | 2026 federal requirement |
| Exempt salary minimum | $684 a week ($35,568 a year) for most executive, administrative and professional exemptions. Employees also must be paid on a salary basis and meet a duties test. |
| Highly compensated employee threshold | $107,432 a year in total annual compensation, including at least $684 a week paid on a salary or fee basis. Employees also must meet the HCE duties test. |
| Recordkeeping | 2026 federal requirement |
| Payroll records | Keep 3 years. |
| Time cards and work schedules | Keep 2 years, along with wage-rate tables and records of additions to or deductions from wages. |
| Enforcement | 2026 federal requirement |
| Statute of limitations | 2 years; 3 years for willful violations. |
| Back pay exposure | Unpaid wages, plus an equal amount in liquidated damages, subject to the statutory good-faith defense. |
| Civil penalty, repeated or willful violations | Up to $2,515 for each repeated or willful minimum wage or overtime violation. |
Sources: U.S. Department of Labor, Wage and Hour Division; 29 U.S.C. §§ 203(m), 203(t), 206, 207, 216, 255 and 260; 29 CFR Parts 516, 531, 541 and 578. Last reviewed October 2026.
Minimum Wage and Tipped Employees
The federal minimum wage is $7.25 an hour. For tipped employees, employers can pay a cash wage as low as $2.13 an hour and take a tip credit of up to $5.12 an hour toward the federal minimum wage. If the employee’s direct wages and tips don’t equal at least the applicable minimum wage in a workweek, the employer must make up the difference.
Before taking a tip credit, employers must tell tipped employees:
- The direct cash wage they will receive
- How much of their tips will count toward the minimum wage
- That the credit cannot exceed the tips they actually receive
- That they can keep their tips except as part of a valid tip pool
Failing to provide that notice means the employer cannot take the tip credit.
Tip Pools and Tip Ownership
Employers may not keep any portion of employees’ tips.
Managers and supervisors may not receive tips from a tip pool or tip-sharing arrangement. However, they may keep tips they receive directly from customers for service they personally and solely provide.
Case Study: Restaurant’s Illegal Tip Pool
The owners of a restaurant in Texas illegally kept a portion of employees’ tips and shared them with managers, according to a 2022 DOL investigation.
The employer had to pay $230,353 in back wages to 274 affected workers.
Key takeaway: Check who is in the tip pool and exclude anyone who qualifies as a manager or supervisor.
Overtime and the Regular Rate
Non-exempt employees must get 1.5 times their regular rate for every hour over 40 in a workweek. A workweek is any fixed, recurring stretch of seven 24-hour days. Employers can’t average hours across two weeks to avoid overtime.
The regular rate includes more than the hourly wage. Production bonuses, attendance bonuses, commissions and shift differentials generally count toward the regular rate unless a statutory exclusion applies. In DOL Opinion Letter FLSA2026-2, the DOL confirmed that a bonus paid under a predetermined performance plan must be included in the regular rate.
Here’s how the math works for an employee who earns $20 an hour, works 45 hours and earns a $90 production bonus:
- Total straight-time pay: 45 hours x $20 = $900
- Add the bonus: $900 + $90 = $990
- Regular rate: $990 / 45 hours = $22
- Overtime premium: 5 hours x $11 (half of $22) = $55
- Total pay for the week: $990 + $55 = $1,045
A payroll system that calculates overtime on the $20 base rate alone would pay $1,040. The $5 shortfall looks small, but if it affects 200 employees every week for two years, it adds up to $104,000 in back wages before any damages or penalties.
What Counts as Hours Worked Under the FLSA
Overtime errors often start with hours worked that never get recorded. Employers must pay for:
- Pre-shift and post-shift tasks that are integral and indispensable to the job
- Time spent putting on and taking off required safety gear when it is integral and indispensable to the job
- On-call time when employees can’t use it for their own purposes
- Travel between job sites during the workday
- Training, unless it is outside normal working hours, voluntary, unrelated to the job and involves no productive work
- Short breaks of 5 to 20 minutes
Meal periods of 30 minutes or more can be unpaid only when employees are completely relieved of duty. Automatic meal deductions are a common source of DOL findings when employees work through lunch without having the deducted time restored.
Case Study: DOL Investigation of Meal Breaks
In 2023, a DOL investigation determined that a security services provider automatically deducted 45 minutes for meals from the workdays of its security employees, even though it sometimes required them to stay at their posts during some or all of that time.
Under the FLSA, if an employer offers a 30-minute or longer meal break where the employee is completely relieved of duties, it can be unpaid. But if they’re still working, that’s not considered a bona fide meal period – and workers must be paid for that time.
In this case, the employer had to pay nearly $550,000 in back pay and an additional equal amount in liquidated damages. On top of that, the DOL assessed a $50,000 civil penalty for the violations.
Key takeaway: Automatic meal deductions only work if employees are fully relieved of duty. Give employees a clear way to report missed or interrupted breaks, and make sure payroll restores the time.
Case Study: $22M Verdict for Unpaid Donning and Doffing Time
The Third Circuit upheld a $22.25 million jury award against East Penn Manufacturing for failing to pay nearly 12,000 employees for time spent donning and doffing required protective gear and showering due to lead exposure.
East Penn built five-minute grace periods into shifts to cover changing and showering, then increased the post-shift period to 10 minutes in 2016. But the employer never tracked how long those tasks actually took. The court ruled that the FLSA requires employers to pay for actual time worked. It also said employers bear the burden of proving that otherwise unpaid time is too minimal to count.
Key takeaway: When safety rules require employees to change clothes or shower on-site, track and pay for the actual time it takes rather than relying on estimated grace periods.
Sec’y, United States DOL v. East Penn Mfg. Co., Nos. 24-1046, 24-1059 (3d Cir. 12/19/24).
Case Study: Ongoing FLSA Fight Over Pay for Booting Up Computers
For the second time, the Ninth Circuit remanded a long-running FLSA dispute over whether call center agents must be paid for time spent booting up their work computers before logging into timekeeping software.
Customer Connexx required workers to log into systems before clocking in. The employees sued under the FLSA, alleging they weren’t paid for time spent booting up and shutting down their computers. The district court granted the company’s motion for summary judgment, finding the employees failed to show the time was more than de minimis. The Ninth Circuit remanded the case a second time, saying a trial was needed because a reasonable jury could find the time was not too minimal to require payment under the FLSA.
Key takeaway: If employees must boot up and log into work technology before they can clock in, that time may be compensable. Review whether your timekeeping system captures it.
Cadena v. Customer Connexx LLC, No. 23-15820 (9th Cir. 7/10/24).
Lactation Time and the PUMP Act
The PUMP Act requires most employers to give nursing employees break time to express breast milk each time they need it, for one year after the child’s birth. The space must be private, shielded from view, free from intrusion and something other than a bathroom.
Lactation breaks can be unpaid when the employee is fully relieved of duty, but if the company pays for other short breaks, lactation breaks taken during that time must be paid too.
Case Study: Denying Lactation Space Led to a $22K Settlement
A Texas counseling company denied a nursing employee adequate time and a private space to express milk, according to a DOL Wage and Hour Division investigation.
The employee ended up pumping in a parking lot accessible to co-workers and the public. She quit rather than continue under those conditions.
The DOL treated the resignation as a constructive discharge under the FLSA’s anti-retaliation provisions. The company agreed to pay $22,000 in back wages, compensatory damages and liquidated damages.
Key takeaway: A parking lot, restroom or other space accessible to co-workers or the public is not an acceptable lactation space. Make sure employees have a private, dependable location that is shielded from view and free from intrusion – and respond promptly when they say the space or break time is not working.
Case Study: A Paramedic’s Lactation and Retaliation Claims
A Tucson firefighter-paramedic sued the city, alleging it failed to consistently provide an appropriate lactation space and retaliated after she complained. She said supervisors called her pumping schedule “excessive” and then subjected her to extra drills and inspections, inappropriate questions, lost vacation time and lost specialty pay.
In April 2019, an Arizona jury awarded $3.8 million to the paramedic. The district court later set aside two of the four claims and reduced the damages on the remaining claims.
Key takeaway: Provide a consistent, compliant lactation space – not an improvised solution that varies by location. Train supervisors to respond appropriately to lactation needs and to avoid retaliating when employees request accommodations or report problems. Even when a large jury verdict is later reduced, the employer can still face a substantial payout, years of litigation and significant legal costs.
Clark v. City of Tucson, No. 4:14-cv-02543 (D. Ariz. 2/26/20).
Exempt vs. Non-Exempt Classification
Most white-collar exemptions require three tests:
- Salary basis: They receive a set salary that generally doesn’t change based on the quality or amount of work.
- Salary level: They earn at least $684 a week ($35,568 a year).
- Duties: Their actual work meets one of the exemption tests.
The 2019 threshold is back in place. The DOL republished it in May 2026 after a federal court struck down the 2024 increase.
Highly compensated employees receiving at least $107,432 in total annual compensation, including at least $684 a week paid on a salary or fee basis, have a less demanding duties test, but must still perform office or nonmanual work and at least one exempt duty on a regular basis.
Each exemption has its own duties test. The primary white-collar exemptions include:
- Executive – Manages the business or a department, supervises at least two full-time employees, or their equivalent, and can hire or fire, or makes hiring and firing recommendations that carry particular weight.
- Administrative – Performs non-manual work related to management or general business operations and uses independent judgment on important matters.
- Professional – Includes learned professionals (e.g., doctors, lawyers) and creative professionals (e.g., artists, writers) whose work requires specialized education or creative talent.
- Computer employee – Covers computer systems analysts, computer programmers, software engineers and other qualifying computer employees who meet the exemption’s specific duties and compensation requirements.
- Outside sales – Primarily makes sales or obtains contracts and regularly works away from the employer’s place of business.
Misclassification – such as assuming exemption based on job title or occasional exempt duties – can result in back pay liabilities and penalties.
Hybrid roles, remote work and fluid job descriptions introduce additional classification risk. To stay compliant, HR should conduct detailed job analyses, review classifications regularly and keep documentation that supports exemption decisions.
Case Study: Supreme Court Lowers Proof Standard for FLSA Exemptions
The Supreme Court ruled unanimously that to prove an employee qualifies for an FLSA exemption, employers must meet the regular civil litigation standard, preponderance of the evidence, not the tougher clear and convincing standard previously required by the Fourth Circuit.
The case involved a food distributor’s sales reps who sued for unpaid overtime. The company claimed they were exempt outside sales reps, but the lower courts sided with the employees. The Supreme Court remanded the case to determine whether the employees qualify as outside sales reps under the lower standard of proof.
Key takeaway: Employers now face a less stringent evidentiary hurdle when defending FLSA exemption classifications in court. Even so, HR still needs solid, well-documented job descriptions and regular classification reviews to avoid costly missteps.
E.M.D. Sales, Inc. v. Carrera, No. 23-217 (U.S. 1/15/25).
Case Study: $8.875M Settlement for Department Managers Classified as Exempt
A federal judge in Maine approved an $8.875 million settlement involving salaried department managers at Hannaford Supermarkets who alleged they were owed overtime.
The managers, who oversaw bakery, deli, produce and meat departments, were classified as exempt. They alleged they worked more than 40 hours a week without overtime pay while doing significant amounts of nonmanagerial work, like stocking and cleaning alongside hourly employees. They also said they had limited authority over hiring, firing and discipline.
About $5.8 million goes to the affected employees, just over $3 million covers administration, legal expenses and attorneys’ fees, and $25,000 goes to the named plaintiffs as service awards.
Key takeaway: A manager title and a salary alone don’t make an employee exempt under the FLSA. When managers spend much of their time doing the same work as hourly staff and have little say in staffing decisions, their exempt classification deserves a closer look. Review what managers actually do, and document their authority over staffing decisions.
Vye v. Hannaford Bros. Co. LLC, No. 2:24-cv-00339 (D. Me. 2026).
Case Study: DOL Recovers $732K for Restaurant Workers Paid a Monthly Salary
A 2026 Department of Labor investigation found that Lucky King LLC, a Florida seafood restaurant operating as Miyako Japanese Buffet, failed to pay workers all wages they were owed in violation of the FLSA.
The restaurant paid most of its employees a monthly salary of $1,000 to $3,000, even though they typically worked more than 40 hours a week. Investigators also found the employer failed to pay minimum wage for all hours worked and failed to keep required records. The employer agreed to pay $732,976 to 31 affected workers.
Key takeaway: Paying a monthly salary doesn’t shield employers from FLSA wage and hour obligations. Salaried employees who don’t meet an exemption are owed at least the minimum wage for every hour and overtime for hours over 40, and employers must track their time. At $1,000 a month, an employee working 40 hours a week earns about $5.77 an hour, below the federal minimum wage before any overtime.
Salary Deductions for Exempt Employees
Employers can deduct from an exempt employee’s salary only in limited circumstances, including full-day absences for personal reasons, full-day absences for sickness or disability if the employer has a bona fide sick-leave plan, and unpaid disciplinary suspensions of one or more full days.
Case Study: Inclement Weather and the FLSA
A one-time improper pay deduction for a weather-related closure did not automatically strip an employee of exempt status under the FLSA, a Virginia court ruled.
The salaried employee classified as exempt had $100 docked from her paycheck after her employer closed due to bad weather. She claimed the improper deduction meant she was misclassified and should receive overtime pay. The court acknowledged the employer made a one-time improper deduction from one employee’s salary on one day, but found no evidence of an actual practice of improper deductions. Even though the deduction was improper, it wasn’t enough to defeat the employer’s defense that the employee was exempt, the court held.
Key takeaway: Employers shouldn’t dock an exempt employee’s salary for a weather-related closure during a week when the employee performs work. Here, the court found that the single deduction did not show a practice of improper deductions that would undermine exempt status. Even so, HR should still correct improper deductions, reimburse affected employees and make sure payroll practices prevent repeat mistakes.
Hansberger v. L’Italia Rest., LLC, No. 5:16-cv-00056 (W.D. Va. 9/7/17).
Employees vs. Independent Contractors
In May 2025, the DOL said it would stop applying the 2024 independent contractor rule in its investigations. In February 2026, it proposed a rule to rescind and replace it with a test focused on two main factors: who controls how the work is done and whether the worker can make or lose money based on their own decisions.
The proposal doesn’t change the rules overnight: The 2024 rule remains in effect for private lawsuits, where courts apply the economic reality test. Companies using 1099 workers should document why each one qualifies.
Case Study: DOL Investigates FLSA Misclassification
In 2022, a Massachusetts courier service agreed to pay $575,000 to resolve DOL allegations that it misclassified 62 courier drivers as independent contractors rather than employees.
The company paid drivers per delivery rather than by the hour and required them to cover vehicle expenses. These practices resulted in the drivers making less than the federal minimum wage in violation of the Fair Labor Standards Act, the DOL said. The company also failed to maintain accurate records of hours worked. The settlement included $287,500 in back wages and another $287,500 in liquidated damages for the affected workers.
Key takeaway: Paying workers per job and making them cover their own expenses can push their pay below the minimum wage. If those workers are really employees, the employer must meet minimum wage and applicable overtime requirements and keep accurate records of hours worked.
Case Study: Too Much Control Undercuts Contractor Status for Security Guards
Except for the owner, everyone at security services company DMV Protection LLC was classified as an independent contractor, from security guards to the director of operations. Guards signed an independent contractor (IC) agreement and handbook, earned $16.50 to $22 an hour without overtime premiums and made no upfront investment. DMV provided branded uniforms, radios, badges, keys, vehicles and gas.
DMV assigned guards to client sites, typically set regular schedules, tracked them through a clock-in app, GPS and site visits, and penalized them for lateness, uniform violations and personal phone use with pay deductions, suspensions and terminations. Guards couldn’t hire help or subcontract shifts without supervisor approval.
In 2025, a guard filed a lawsuit alleging misclassification and unpaid overtime under the FLSA and state law. The court found DMV’s extensive control weighed heavily against contractor status. Other factors also supported employee status: DMV set hourly rates, security work was integral to its only business and it supplied the equipment. The court ruled that the guards were employees, not independent contractors, granting partial summary judgment on misclassification.
Key takeaway: An IC agreement doesn’t determine worker status. How a business operates, particularly who sets rates, assigns schedules, tracks time, supervises performance and imposes discipline, matters more.
Rangel v. DMV Protection, LLC, No. 1:25-cv-01288 (E.D. Va. 9/11/26).
Child Labor Laws
In nonagricultural jobs, workers aged 14 and 15 can’t work during school hours, and they’re limited to working:
- three hours on a school day and 18 hours in a school week
- eight hours on a non-school day and 40 hours in a non-school week
- between 7 a.m. and 7 p.m., extended to 9 p.m. from June 1 through Labor Day
Workers under 18 generally can’t perform jobs the DOL classifies as hazardous, such as operating power-driven meat slicers or forklifts, or doing roofing work.
FLSA Case Study: DOL Investigates Child Labor Violations
An indoor adventure park in Florida violated child labor laws by allowing 55 minor employees, between the ages of 14 and 15, to work after 7 p.m. on school nights, according to a 2023 DOL investigation.
The company was assessed $43,505 in civil penalties for child labor violations and had to pay an additional $558 in back wages to 12 employees after excluding paid breaks from employees’ hours and underpaying overtime.
Key takeaway: Schedule 14- and 15-year-olds around the federal hour limits, including the 7 p.m. cutoff, which extends to 9 p.m. from June 1 through Labor Day. Set scheduling and timekeeping systems to flag shifts that run past the applicable cutoff.
FLSA Recordkeeping Rules
Keep these records for at least three years:
- Payroll records: each employee’s name, Social Security number, address, occupation and birth date if under 19; and, for nonexempt employees, the start of the workweek, hours worked each day and week, pay basis, regular rate, straight-time and overtime earnings, additions and deductions, total wages paid, payment date and pay period covered
- Collective bargaining agreements and individual employment contracts
- Written agreements under the FLSA
- Sales and purchase records
Keep these records for at least two years:
- Time cards and piecework records
- Wage-rate tables
- Work schedules
- Records explaining additions to or deductions from wages
How DOL Investigations Work
The DOL’s Wage and Hour Division investigates complaints and targets industries with high violation rates. Investigators can recover back wages, assess civil penalties and refer cases for litigation. A DOL policy change (Field Assistance Bulletin No. 2025-3) bars the division from seeking liquidated damages during administrative investigations.
Having your FLSA documents ready is a good first step to show good faith, employment attorney Michael Elkins previously told HRMorning. “The DOL investigators are just doing their jobs. They’re humans, and thus, a good professional attitude helps make the process more efficient and hopefully less painful.” Employers must cooperate, and retaliating against employees who complain or take part in an investigation is illegal.
Case Study: DOL Investigates Retaliation
According to a DOL press release, a northern California restaurant’s attempt to use an alleged priest to coerce employees into confessing workplace “sins” was described by a DOL official as among the most shameless efforts to intimidate or retaliate against workers.
In 2023, the agency announced its investigation found the restaurant denied employees overtime pay and illegally paid managers from the employee tip pool. The restaurant then threatened employees with retaliation and adverse immigration consequences for cooperating with the DOL’s investigation, the agency determined. Moreover, the restaurant fired the employee believed to be connected to the DOL complaint.
In court, an employee testified that the restaurant also brought in an individual claiming to be a priest, who urged workers to “get the sins out,” and asked the employees if they had stolen from the employer, been late for work, had done anything to harm their employer or if they had bad intentions toward their employer.
Under a consent judgment, the company and its owners and operators agreed to pay $140,000 in back wages and damages to 35 employees, plus $5,000 in civil penalties for willful violations.
Key takeaway: Employers can’t threaten, intimidate or punish employees for cooperating with a DOL investigation. Train managers to send any response to a complaint or investigation through HR and counsel.
Case Study: Employer Repeatedly Missed Payroll
A California construction contractor was ordered to pay $468,505 after a DOL investigation found 137 workers went unpaid or underpaid between November 2024 and November 2025.
According to the DOL, FLSA violations included repeatedly missing payroll entirely, failing to pay minimum wage, not paying overtime, and retaliating against a worker who complained. The court ordered the company to reinstate that worker, and the DOL assessed a civil penalty for willful violations.
Key takeaway: Missed payroll is an FLSA violation, and resolving wage violations before litigation can reduce the employer’s financial exposure. If cash flow puts a payroll at risk, bring in finance before the pay date passes.
How to Run an Internal FLSA Audit
Audits catch errors before the DOL does. A solid audit covers:
- Classification. Check each exempt employee’s actual duties and whether they meet the applicable salary requirements.
- Pay calculations. Pull a sample of paychecks and recalculate overtime, including nondiscretionary bonuses and differentials.
- Hours worked. Check for unrecorded pre-shift work, auto-deducted meals and remote employees working off the clock.
- Records. Confirm the company keeps every required record for the right length of time.
- Policies. Update the handbook for current federal and state rules.
- Fixes. Assign each problem to a person with a deadline, and document the correction.
Employment attorneys often recommend auditing once a year, and again after major changes, such as expanding into a new state, reorganizing jobs or switching payroll systems.
Companies that find violations can consider the DOL’s PAID program to self-report and pay back wages under DOL supervision. Talk to employment counsel first: Not every employer qualifies, and participation does not eliminate employees’ claims under state or local law.
Using Payroll and Timekeeping Tech
Timekeeping and payroll systems can track hours, flag missed punches, calculate the regular rate and keep audit-ready records. Make sure the system:
- Includes nondiscretionary bonuses, commissions and shift differentials in overtime calculations
- Tracks remote and flexible hours
- Applies state and local rates and daily overtime rules
- Connects to payroll without manual re-entry
- Flags employees nearing overtime or missing meal breaks
Systems still need oversight. Pay rules set up incorrectly at launch will repeat the same error every pay period until someone notices and corrects it. Consider auditing the system’s pay rules annually, or twice a year for multistate employers or companies with complex pay plans. Review them whenever applicable laws or company pay practices change.
State Wage and Hour Laws
The FLSA sets the floor. Common areas where states go further include:
- Minimum wage. Thirty states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands have minimum-wage rates above the federal $7.25 an hour, and many cities and counties set higher rates.
- Tip credit. Several states, including California, Washington and Minnesota, ban the tip credit entirely. See the DOL’s state tipped-minimum-wage table for current requirements.
- Daily overtime. The FLSA counts overtime by the week. California requires overtime after eight hours in a day and double time after 12. Alaska requires overtime after eight hours in a day, Colorado after 12 hours in a day or 12 consecutive hours, and Nevada after eight for employees earning under 1.5 times the state minimum wage.
- Meal and rest breaks. Many states require meal breaks for adults, and some also require rest breaks, with set lengths and timing.
- Exempt salary minimums. Alaska, California, Colorado, Maine, New York and Washington set salary thresholds above $684 a week for some exemptions.
- Independent contractors. Several states, including California, Massachusetts and New Jersey, use stricter ABC tests for many workers.
Multistate employers should map each requirement by state and comply with the applicable federal, state and local rules.
FLSA FAQs
What is the FLSA salary threshold for 2026?
$684 a week ($35,568 a year) for most white-collar exemptions. Highly compensated employees must earn at least $107,432 in total annual compensation, including at least $684 a week paid on a salary or fee basis.
Does the FLSA require lunch breaks?
No. The FLSA doesn’t require meal breaks. If employers offer short rest breaks, typically 5 to 20 minutes, they must pay for them. The law separately requires break time for covered employees to pump breast milk.
Do bonuses count toward overtime pay?
Generally, yes. Nondiscretionary bonuses, such as those based on performance, attendance or production, must be included in the regular rate used to calculate overtime. Certain discretionary bonuses and other payments can be excluded under the FLSA.
How long do employers have to keep payroll records?
At least three years for payroll records and two years for time cards, wage-rate tables and work schedules.
How far back can employees claim unpaid wages?
Two years, or three years for willful violations. Employees generally can recover an equal amount in liquidated damages for unpaid minimum wages or overtime. A court may reduce or waive liquidated damages if the employer proves it acted in good faith and had reasonable grounds to believe it was complying with the FLSA.
HR Takeaways
- Recalculate overtime for nonexempt employees who earn nondiscretionary bonuses, commissions or shift differentials.
- Turn off automatic meal deductions unless managers confirm employees took a full, uninterrupted break.
- Check exempt employees’ actual duties and applicable salary requirements, including any higher state threshold.
- Review each 1099 worker’s role and document why they qualify as a contractor.
- Run an internal audit once a year and after major changes, and fix and document every error found.
- Map minimum wage, daily overtime, exempt salary and break rules for every state where employees work.
Download our FLSA compliance checklist to keep your team on track.
Free Training & Resources
EBOOK, White Papers
Provided by Personify Health
