Every employer should be familiar with wage and hour laws set by the US federal government, as well as state and local laws. Wage and hour laws protect workers' rights. The law states the minimum amount a worker can earn per hour and the maximum hour that a worker can be expected to work in a day. The law also provides rules for overtime pay, break time regulations, tips, pay periods, direct deposit, paycheck deductions and weekend pay.
At the federal level, the majority of wage and hour laws are set by the Fair Labor Standards Act (FLSA). The Internal Revenue Service (IRS) sets other parameters such as which employees can work for less than the federal minimum wage. Here are a few facts you should know about wage and hour laws:
- The federal minimum wage is currently set to $7.25 an hour. Many local laws will add their own minimum wage on top of the federal minimum wage to allow a just living wage.
- Any employees who work more than 40 hours a week must be paid at one and a half times the normal working wage for overtime pay.
- Some employees are exempt from overtime pay. A few examples of employees who do not require overtime pay past 40 hours are administrators, babysitters, workers in the tech field, executives, outside sales, small farm workers, and amusement park employees.
- The line between an independent contractor and an employee can sometimes be very tenuous. Unless your independent contractor falls within the categories of an exempt worker, err on the side of treating your contractor as a non-exempt employee.
There are many wage and hour laws. An attorney that specializes in business and employment law can help inform you of the laws that apply to your business and your employees and make sure your business is following federal and local employment regulations.