FLSA 101: Who Is Covered Under the Fair Labor Standards Act?

The Fair Labor Standards Act (FLSA) protects more than 130 million workers in more than 7 million workplaces.  image

There are two types of coverage under the FLSA:

  • Enterprise coverage:  If an enterprise is covered, all of the enterprise’s employees are entitled to FLSA protection.
  • Individual coverage:  Even if the enterprise is not covered, individual employees may be covered and entitled to FLSA protections.

To qualify for enterprise coverage, the “enterprise” must have at least two employees and must generate at lease $500,000 per year in business.  For the purposes of the FLSA, enterprises include:

  • Hospitals;
  • Businesses providing medical or nursing care for residents;
  • Schools;
  • Preschools; and
  • Federal, state, and local government agencies.

To qualify for individual coverage, the employee must be engaged in:

  • Interstate commerce;
  • Production of goods for commerce;
  • Closely-related process or occupation directly essential such production; or
  • Domestic service.

Don’t underestimate the first possible qualification:  employees engaged in interstate commerce.  This may include even the most minimal activity across state lines, such as:

  • Making telephone calls to other states;
  • Typing letters to other states;
  • Processing credit-card transactions;
  • Traveling to other states.

As a general rule, almost every employee in the U.S. is covered by the FLSA. Some examples of employees who may not be covered include:

  • Employees working for small construction companies;
  • Employees working for small independently owned retail or service businesses.

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