CashoutGlossary / Fair Labor Standards Act (FLSA)
Fair Labor Standards Act (FLSA)
The main federal wage law: it sets the $7.25 minimum wage, overtime after 40 hours a week, the tip credit rules and the employer's pay records.
The Fair Labor Standards Act is the federal law behind most of your pay rules. The Department of Labor says it establishes minimum wage, overtime pay, recordkeeping and youth employment standards for employees in the private sector and in federal, state and local governments.
The parts that matter most to tipped workers:
- Minimum wage: $7.25 an hour, in effect since July 24, 2009. Many states and cities set higher minimums; see tipped minimum wage by state.
- Tip credit: an employer can pay a tipped employee at least $2.13 an hour in cash and count tips toward the rest, a tip credit of up to $5.12. A tipped employee is one who customarily and regularly receives more than $30 a month in tips.
- Your tips are yours: the FLSA bars employers from keeping any portion of employees' tips, and an employer can't make you hand tips to a manager or supervisor.
- Overtime: at least one and a half times your regular rate after 40 hours in a workweek, figured on the full minimum wage when your employer takes a tip credit.
What it doesn't cover: the FLSA doesn't require meal or rest breaks, holidays off or vacations, and it doesn't limit the hours an employee 16 or older can be scheduled. Where those protections exist, they come from state law or your employer's policy.
If your employer breaks the FLSA, you can file a confidential complaint with the Department of Labor or sue for back wages. The deadline is generally 2 years, or 3 years for a willful violation.
Related terms
Department of Labor (DOL) · Overtime · Tip credit · Tipped minimum wage · Wage theft
