The Fair Labor Standards Act of 1938 applies to most businesses in the United States. If your business has more than $500,000 in annual sales, or communicates with other states by mail or phone, it is subject to FLSA regulations. These are:

Minimum wage. All of the business's employees have to be bringing home at least a minimum wage (originally 25 cents an hour; now $5.15).

Maximum hours. 40 hours a week, unless the state dictates a shorter workweek.

Overtime. Any employee working over the maximum hours limit has to get extra money for doing so.

Preparatory time. If an employee is doing anything for the employer's benefit, even if it's not "working" per se, they have to get paid for it.

Child labor. Children under 14 can only work in a handful of occupations (acting, farming, babysitting, etc.), while children between 14 and 18 have work environment restrictions based on their age (the younger they are, the less dangerous their job must be).

The child labor and preparatory time rules are extended to all employees. Minimum wage and overtime rules, however, have many exceptions:

  1. Administrative, executive, and professional employees (including teachers)... basically, all the careers for a liberal arts major.
  2. Outside salesmen
  3. Seamen
  4. Switchboard operators
  5. Newspaper employees
  6. Seasonal recreational workers (e.g. carnies)
  7. Farm workers at small farms
  8. Babysitters
  9. Companions for the elderly
  10. Retail or service businesses with gross annual income below $362,500
  11. Family businesses where the only employees are members of the family
  12. All businesses with gross annual income below $250,000
Businesses that violate these rules can be fined up to $10,000, and individuals who violate the rules repeatedly can get up to 6 months in prison. In cases of child labor, the penalty is up to $10,000 for each child hired.

Would you like to know MORE? The Department of Labor has a detailed FLSA walkthrough at, which is useful to both employers and employees. The text of the Act can be found in title 29, chapter 8 of the United States Code.

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