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payroll

FLSA

Fair Labor Standards Act - federal law governing wages and hours.

The FLSA establishes minimum wage, overtime eligibility, recordkeeping requirements, and child labor standards for employees in the private sector and government. It defines exempt versus non-exempt classifications that determine overtime eligibility. The current federal minimum wage is $7.25/hour, though most states set higher minimums. FLSA violations are among the most common and expensive employment lawsuits.

Example

A business classifies an office manager as exempt from overtime, but an FLSA audit reveals the employee doesn't meet the salary or duties test—the business owes two years of back overtime.

Why It Matters for Your Business

FLSA compliance is not optional, and violations result in back pay, liquidated damages (double the owed amount), and attorney fees—proper classification saves you from costly lawsuits.

Related Terms

Overtime Pay

More Payroll Terms

Employee Benefits

Non-wage compensation like health insurance and retirement plans.

Gross Pay

Total earnings before any deductions.

Net Pay

The amount received after all deductions.

Overtime Pay

Additional compensation for hours worked beyond 40 per week.

Hourly Rate

Pay rate calculated per hour worked.

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Accounting 101 GuideFinancial Statements GuideTax Deductions GuideFinancial Reports Feature

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