Is your small business a “covered” employer under the Fair Labor Standards Act?
It would be helpful to know if your business is considered a “covered” employer under the federal Fair Labor Standards Act (“FLSA”).
If you are “covered”, you are subject to the detailed record-keeping requirements of the FLSA, as well as the child labor provisions, minimum wage and overtime requirements, among other things.
What is a “covered” employer under the FLSA? It can mean either of two things: (1) enterprise liability, which means the whole business is covered; or (2) individual coverage, employees are protected by the FLSA if their work regularly involves them in commerce between States (“interstate commerce”). The FLSA covers individual workers who are “engaged in commerce or in the production of goods for commerce.” As a related note, I dare you to find a worker who is “not” engaged in commerce at this point!
To be covered under “enterprise liability” you must have at least two employees and:
(1) have an annual dollar volume of sales or business done of at least $500,000; or
(2) be hospitals, businesses providing medical or nursing care for residents, schools and preschools, and government agencies.
Most people would be surprised at how many small businesses are covered by the FLSA. If you have questions about whether your business is covered by the FLSA, talk to an attorney who can help figure it out.