Chapter 20 - § 20.3 • THE FAIR LABOR STANDARDS ACT

• Jurisdiction: Colorado

§ 20.3 • THE FAIR LABOR STANDARDS ACT

Note: This is an extremely complex statute, and the following material is intended only as an overview.

The Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201, et seq., was enacted by Congress in 1938. While a detailed analysis of the FLSA is beyond the scope of this work, the provisions of the FLSA set forth, among other things, the requirements for minimum wages, overtime pay, equal pay, and recordkeeping. The U.S. Department of Labor (DOL) has responsibility for the administration and enforcement of the FLSA. The Wage and Hour Division of the DOL issues rules and regulations under the FLSA and is responsible for all inspections and investigations performed to determine compliance with its provisions. In some very limited categories and by specific regulation, the administrator of the Wage and Hour Division of the DOL may allow certain persons, including learners, student-learners, messengers, and apprentices, to be paid subminimum wages. State wage laws are not preempted by the FLSA. Williamson v. Gen. Dynamics Corp., 208 F.3d 1144 (9th Cir. 2000); Overnite Transp. Co. v. Tianti, 926 F.2d 220, 222 (2d Cir. 1991); see also Avery v. City of Talledega, 24 F.3d 1337 (11th Cir. 1994).

The minimum wage provisions of the FLSA do not require that an employee be paid on an hourly basis. Rather, the pay covering each workweek must be equal to, or in excess of, the minimum wage requirements. Thus, an employee can be paid on a salaried, commission, piecework, or other basis as long as the minimum wage and overtime provisions are satisfied.

Although the minimum wage requirement may be met, in part, by providing board, lodging, or other facilities, regulations under the FLSA state that the employer may not make a profit on the non-cash payments.

§ 20.3.1—Employees And Employers Subject To The FLSA

The courts have made it clear that the employment relationship under the FLSA is broader than the traditional common law concept of master and servant. The difference between the employment relationship under the FLSA and that under the common law arises from the fact that under the FLSA the term "employ" includes "to suffer or permit to work." 29 U.S.C. § 203(g). While the phrase "to permit" requires more positive action than "to suffer," both terms imply much less positive action by the employer than is required by common law. The "suffer or permit" definition of employment is "the broadest definition that has ever been included in any one act." United States v. Rosenwasser, 323 U.S. 360, 363 n.3 (1945). Under the FLSA, mere knowledge and acceptance by an employer of work done for it by another may be sufficient to create the employment relationship. Rutherford Food Corp. v. McComb, 331 U.S. 722 (1947); Salinas v. Commercial Interiors, Inc., 848 F.3d 125 (4th Cir. 2017).

Under the FLSA, an employee is any individual employed by the employer. 29 U.S.C. § 203(e)(1). The U.S. Supreme Court has said that there is "no definition that solves all problems as to the limitations of the employer-employee relationship" under the FLSA. The court also has said that determination of the relation cannot be based on "isolated factors" or upon a single characteristic or "technical concepts," but depends "upon the circumstances of the whole activity," including the underlying "economic reality." In general, an employee, as distinguished from an independent contractor who is engaged in a business of his or her own, is one who "follows the usual path of an employee" and is dependent on the business that he or she services. Fed. Prac. Dig.—Labor Relations §§ 1125-1126; 48A Am. Jur. 2d Labor and Labor Relations §§ 3822, 3832-40; see also 51 A.L.R. Fed. 702. Moreover, regulations adopted by the DOL embrace the concept of joint employment, meaning that two or more entities may be considered employers simultaneously. 29 C.F.R. § 791.2.

An individual who handles, sells, or uses materials or instrumentalities connected with interstate commerce is covered by the FLSA. 29 U.S.C. § 203(s)(1)(A)(i); 29 C.F.R. § 776.11. Individuals whose work produces goods for sale or shipment in interstate commerce are also covered by the FLSA. 29 U.S.C. § 203(j); 29 C.F.R. §§ 776.15 through 776.21. Such production is broadly defined to capture manual and nonmanual work concerning the creation, sale, and distribution of tangible or intangible goods shipped or sold across state lines. Finally, businesses are covered if they are engaged in commerce and have an annual volume of sales of at least $500,000. 29 U.S.C. § 203(s)(1)(A)(ii).

§ 20.3.2—Exemptions Under The FLSA

The...