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Wage and Hour Laws: What Employers Need to Know

Recently, the US reached an employment rate of 60.20%. Previously, the employment rate was 60.10%. This rise in the employment rate is a positive sign for US citizens. More and more people are getting employed in recent times.

 This is a good time to learn about employment laws that may significantly impact employees and employers. Regardless of the size of the business, every employer must follow a set of guidelines. 

Failure to follow these guidelines may result in penalties and lawsuits. 

The Fair Labor Standards Act (FLSA) is the new labor law created with the intention of ensuring employees are getting fair compensation for their work. This law governs everything regarding wages and hours of work.

Both employers and employees must be familiar with the FLSA rules. Employees can protect their rights, and employers can avoid penalties and lawsuits. Here are some of the wage and hour laws everyone should know about.

Minimum Wage

According to federal laws, employers are required to pay a minimum wage of $7.25/hour to their employees. Sadly, this minimum wage hasn’t changed since 2009. States are allowed to set their own minimum wage. Currently, 30 states have their own minimum wage, which is above $7.25/hour.

As of January 1, 2023, 4 states have raised their minimum wage to $15/hour. The 4 states are California, Connecticut, Massachusetts, and Washington. This is excellent news for the citizens of these states, as living at $7.25/hour is not ideal in 2023.

In addition, the Biden administration also increased the minimum wage for federal employees from $7.25/hour to $15/hour.

Currently, the highest minimum wage is awarded in Washington, which is $16.10/hour.

However, there are some exceptions to receiving the minimum wage. Employers can pay a minimum wage of $4.25/hour to employees under the age of 20. These employees can receive the normal minimum wage once they reach the age of 20.

Minimum Wage for Tipped Employees

The minimum wage law works differently for tipped employees. This is another exception to receiving the minimum wage. According to federal laws, tipped employees should be paid a minimum wage of $2.13/hour. This applies to employees who earn most of their wages through tips.

The minimum wage and tips, when combined, should make a total of $7.25/hour, which is the minimum wage. State laws can set their own rules for tipped employees, too. In some states, tipped employees receive the same minimum wage as non-tipped employees.

Overtime Pay

An employee should work a minimum of 40 hours/week according to federal laws. Most jobs require more than 40 hours per week of work. It is not just employers’ expectations; even the nature of the job requires more than 40 hours/week.

Considering this, all employees must learn about overtime pay. According to the Department of Labor, employers are required to pay all non-exempt employees one and a half times their standard pay for overtime work.

There is no rule that puts a limit on the number of hours an employee can work in a week. However, according to the FSLA, employers don’t have to compensate employees for work done on Saturdays, Sundays, and other holidays.

Overtime Pay for Exempt and Non-Exempt Employees

It is important for employers to identify exempt and non-exempt employees. Only non-exempt employees are allowed to receive overtime pay. To qualify as a non-exempt employee, the employee must earn less than $35,568 per year, or $684 per week.

On the other hand, employees who earn more than $35,568 annually are classified as exempt employees. These exempt employees’ work should be in the executive category. These employees are not subjected to any FSLA rules, and they don’t receive overtime pay.

This is why employers must have the knowledge to classify their employees properly. When mistakenly classifying a non-exempt employee as an exempt employee, you will extinguish their ability to earn overtime pay. This may negatively affect the business. Hire experienced HR professionals who can properly classify exempt and non-exempt employees.

Final Thoughts

Protecting employees’ rights is important. To do that, employees must learn about their rights and how to identify any violation of those rights. In addition, an employer must also focus on following all the rules and regulations of the FSLA to avoid penalties and lawsuits. Lawsuits can cause financial losses and affect the company’s reputation too. Lawsuits can bring a lot of negative attention to a company.

Employees must take action when they encounter a violation of labor rights. They can speak with lawyers to represent them and file lawsuits against their company. Taking legal action is the only way to stop negligent employers from taking advantage of their employees.

Author Bio

Robert is the founder and senior editor of Legal analysis, a blog that is dedicated to law. Robert is a passionate writer who loves to write about law and digital marketing. His goal is to make people aware of their legal rights and to protect themselves. He has many years of experience working with various law firms and digital marketing agencies as a content writer. Robert aims to raise people’s awareness of the value of technology in modern society through his publications.

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