The Fair Labor Standards Act is a federal law that establishes minimum wage and other payment and work conditions for employees. All private companies, regardless of the size or the number of workers, must follow the provisions of the FLSA or risk significant fines and legal action.
These are the aspects of the FLSA most likely to affect how you schedule and pay your workers.
Although the federal minimum wage is $7.25 per hour, Connecticut employers must pay the higher state minimum wage of $11 per hour. Under a law Governor Ned Lamont signed in May 2019, the state’s minimum wage will gradually increase to a maximum of $15 per hour by June 2023. The next scheduled increase is to $12 in September 2020.
Non-exempt employees, a category that includes hourly workers as well as some salaried employees, must receive overtime pay of at least 1.5 times their base hourly rate for all hours worked beyond 40 hours in a single week. For example, if a worker paid $11 per hour earns overtime, you must pay for those extra hours at a minimum rate of $16.50 per hour.
Companies that employ workers must keep detailed payroll records for each worker for at least three years. These records must include the person’s full name, birth date, address, Social Security number, hours worked each day, hours worked each week, hourly pay rate, overtime earnings, any deductions from the wages such as taxes and health insurance, and total wages paid. Employers should also have a timekeeping plan that is standard for all employees, whether that involves an electronic time clock or simply having each worker write down his or her hours each day.
Ensuring compliance with the terms of the FLSA can protect the future of your business. Fines may equal $1,000 per violation, which can add up quickly for those with several employees.